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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
———————————————
FORM 10-Q
(Mark One)
x☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2018September 30, 2022 
OR
or
¨☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to

Commission File No. 001-38469
————————————————
eqh-20220930_g1.jpg
AXA Equitable Holdings, Inc.
(Exact name of registrant as specified in its charter) 
Delaware90-0226248
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)(I.R.S. Employer Identification No.)
1290 Avenue of the Americas, New York, New York10104
(Address of principal executive offices)(Zip Code)

1290 Avenue of the Americas, New York, New York                 10104
(Address of principal executive offices) (Zip Code)

(212) 554-1234
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Not applicable
Title of each classTrading symbolName of each exchange on which registered
Common StockEQHNew York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a share of Fixed Rate Noncumulative Perpetual Preferred Stock, Series AEQH PR ANew York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a share of Fixed Rate Noncumulative Perpetual Preferred Stock, Series CEQH PR CNew York Stock Exchange
(Former name, former address, and former fiscal year if changed since last report.)Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ¨☒No x☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x☒No  ¨☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an “emerging growth company”. See definition of “accelerated filer,” “large accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒
¨

Accelerated filer☐
¨

Non-accelerated filer☐
x  (Do not check if a smaller reporting company)
Smaller reporting company☐
¨

Emerging growth company
¨

☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes¨ ☐No x☒
As of June 19, 2018, 561,000,000November 1, 2022, 370,042,369 shares of the registrant’s Common Stock, $0.01 par value, were outstanding.



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TABLE OF CONTENTS

Page
- FINANCIAL INFORMATION
•
Unaudited Consolidated Balance Sheets, March 31, 2018September 30, 2022 (Unaudited) and December 31, 20172021
4
•
Unaudited Consolidated Statements of Income (Loss), QuartersThree and Nine Months Ended March, 31, 2018September 30, 2022 and 20172021 (Unaudited)
65
•
76
•
8
•
9
•
Notes to Consolidated Financial Statements (Unaudited):
11
Note 1 - Organization
11
Note 2 - Significant Accounting Policies
12
Note 3 - Investments
1916
Note 4 - Closed BlockDerivatives
4227
Note 5 - Insurance LiabilitiesClosed Block
4334
Note 6 - Reinsurance AgreementsInsurance Liabilities
4836
Note 7 - Fair Value Disclosures
4839
Note 8 - Revenue Recognition
63
Note 9 - Employee Benefit Plans
6356
Note 9 - Income Taxes
57
Note 10 - Share-Based Compensation ProgramsEquity
6557
Note 11 - Income TaxesRedeemable Noncontrolling Interest
6659
Note 12 - Related Party Transactions
66
Note 13 - Accumulated Other Comprehensive Income (Loss)
67
Note 14 - Commitments and Contingent Liabilities
6860
Note 1513 - Insurance Group Statutory Financial Information
63
Note 14 - Business Segment Information
7365
Note 15 - Earnings per Common Share
68
Note 16 - Earnings Per ShareSubsequent Events
7668
Note 18 - Subsequent Events
81
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
8270
132111
133112
- OTHER INFORMATION
Item 1.
135113
Item 1A.
135113
Item 2.
135113
Item 3.
135113
Item 4.
135113
Item 5.
135113
Item 6.
137114
139120



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NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INFORMATION
Certain of the statements included or incorporated by reference in this Quarterly Report on Form 10-Q including but not limited to those in Management’s Discussion and Analysis of Financial Condition and Results of Operations, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects,” “believes,” “anticipates,” “intends,” “seeks,” “aims,” “plans,” “assumes,” “estimates,” “projects,” “should,” “would,” “could,” “may,” “will,” “shall” or variations of such words are generally part of forward-looking statements. Forward-looking statements are made based on management’s current expectations and beliefs concerning future developments and their potential effects upon AXA Equitable Holdings, Inc. (“Holdings”) and its consolidated subsidiaries. “We,” “us” and “our” refer to Holdings and its consolidated subsidiaries, unless the context refers only to Holdings as a corporate entity. The term “ABLP” refers to AllianceBernstein L.P., a Delaware limited partnership and “AB Holding” refers to AllianceBernstein Holding L.P., a Delaware limited partnership (ABLP and AB Holding, together, “AB”). There can be no assurance that future developments affecting Holdings will be those anticipated by management. Forward-looking statements include, without limitation, all matters that are not historical facts.
Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you thatThese forward-looking statements are not guaranteesa guarantee of future performance or outcomes and that actual performanceinvolve risks and outcomes, including, without limitation, our actual results of operations or financial condition, may differ materially from those made in or suggested by the forward-looking statements contained herein. In addition, even if our results of operations, financial conditionuncertainties, and cash flowsthere are consistent with the forward-looking statements contained herein, those results may not be indicative of results in subsequent periods. Newcertain important factors emerge from time to time that may cause our business not to develop as we expect, and it is not possible for us to predict all of them. Factors that could cause actual results and outcomes to differ, possibly materially, from thoseexpectations or estimates reflected in such forward-looking statements, include, without limitation:
Adverseincluding, among others: (i) conditions in the global capitalfinancial markets and economy, including the economy;
Variableimpact of COVID-19 and related economic conditions, equity market declines and volatility, interest rate fluctuations, impacts on our goodwill and changes in liquidity and access to and cost of capital; (ii) operational factors, including reliance on the payment of dividends to Holdings by its subsidiaries, protection of confidential customer information or proprietary business information, operational failures by us or our service providers, catastrophic events, such as the outbreak of pandemic diseases including COVID-19, potential strategic transactions, and changes in accounting standards; (iii) credit, counterparties and investments, including counterparty default on derivative contracts, failure of financial institutions, defaults by third parties and affiliates and economic downturns, defaults and other events adversely affecting our investments; (iv) our reinsurance and hedging programs; (v) our products, structure and product distribution, including variable annuity guaranteed benefits features within certain of our products;
Inadequacyproducts, variations in statutory capital requirements, financial strength and claims-paying ratings, state insurance laws limiting the ability of our reinsuranceinsurance subsidiaries to pay dividends and hedging programs;
Competitionkey product distribution relationships; (vi) estimates, assumptions and valuations, including risk management policies and procedures, potential inadequacy of reserves and experience differing from other insurance companies, banks, asset managerspricing expectations, amortization of deferred acquisition costs and other financial institutions;
The failure of our new business strategy in accomplishing our objectives;
Risks related tomodels; (vii) our Investment Management and Research segment, including significant fluctuations in AB’s assets under management (“AUM”),and the industry-wide shift from actively-managed investment services to passive services, termination of investment advisory agreement, inability to deliver consistent performance, the quantitative models AB uses in certain of its investment services containing errors, and fluctuations in exchange rates;
Inability to recruit, motivate and retain key employees and experienced and productive financial professionals;
The amount of statutory capital we have and must hold to meet our statutory capital requirements and our financial strength and credit ratings varying significantly from time to time;
Holdings’ dependence on the ability of its subsidiaries to pay dividends and other distributions to Holdings, and the failure of its insurance subsidiaries to generate sufficient statutory earnings or have sufficient statutory surplus to enable them to pay ordinary dividends;
Operational failures, failure of information systems or failure to protect the confidentiality of customer information, including by service providers, or losses due to defaults, errors or omissions by third parties and affiliates;
Risks related to strategic transactions;
The occurrence of a catastrophe, including natural or man-made disasters;
Failure to protect our intellectual property and infringement claims by a third party;
Our investment advisory agreements with clients, and selling and distribution agreements with various financial intermediaries and consultants, being subject to termination or non-renewal on short notice;


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Failure of our insurance to fully cover potential exposures;
Changes in accounting standards;
Risks and increased complianceservices; (viii) legal and regulatory costs due to certain of our administrative operations and offices being located internationally;
Our counterparties’ requirements to pledge collateral or make payments related to declines in estimated fair value of specified assets and changes in the actual or perceived soundness or condition of other financial institutions and market participants;
Gross unrealized losses on fixed maturity and equity securities, illiquid investments and defaults on investments;
Changes to policyholder behavior assumptions under the contracts reinsured to our affiliated captives, the performance of their hedging program, their liquidity needs, their overall financial results and changes in regulatory requirements regarding the use of captives;
The failure to administer or meet any of the complex product and regulatory requirements of our retirement and protection products;
Changes in statutory reserve or other requirements;
A downgrade in our financial strength and claims-paying ratings;
Consolidation of or a loss of, or significant change in, key product distribution relationships;
The failure of our risk management policies and procedures to be adequate to identify, monitor and manage risks;
Inadequate reserves due to differences between our actual experience and management’s estimates and assumptions;
Mortality, longevity and morbidity rates or persistency rates differing significantly from our pricing expectations;
The acceleration of the amortization of deferred acquisition costs (“DAC”);
Inherent uncertainty in our financial models that rely on a number of estimates, assumptions and projections;
Subjective determination of the amount of allowances and impairments taken on our investments;
Changes in the partnership structure of AB Holding and ABLP or changes in the tax law governing partnerships;
U.S.risks, including federal and state legislative and regulatory actionlegislation affecting financial institutions, insurance regulation and changes in supervisorytax reform; (ix) risks related to our common stock and enforcement policies;
The Tax Cuts(x) general risks, including strong industry competition, information systems failing or being compromised and Jobs Act, enacted on December 22, 2017 (the “Tax Reform Act”) and future changes in U.S. tax laws and regulations or interpretations thereof;
Adverse outcomes of legal or regulatory actions;
Conflicts of interest that arise becauseprotecting our controlling stockholder and its affiliates have continuing agreements and business relationships with us;
Our failure to effectively remediate the material weaknesses in our internal control over financial reporting;
Costs associated with any rebranding that we expect to undertake after AXA S.A. (“AXA”) ceases to own at least a majority of our outstanding common stock;
Failure to replicate or replace functions, systems and infrastructure provided by AXA or certain of its affiliates and loss of benefits from AXA’s global contracts; and
Future sales of shares by existing stockholders could cause our stock price to decline.


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intellectual property.
Forward-looking statements should be read in conjunction with the other cautionary statements, included and the risks, uncertainties and other factors identified in Holdings’ prospectus dated May 9, 2018,Annual Report on Form 10-K for the year ended December 31, 2021, as amended or supplemented in our subsequently filed Quarterly Reports on May 11, 2018 with the U.S. Securities and Exchange Commission pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended,Form 10-Q, including in the section entitled “Risk Factors,” and elsewhere in this Quarterly Report on Form 10-Q. You should read this Form 10-Q completely and with the understanding that actual future results may be materially different from expectations. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law.

Other risks, uncertainties and factors, including those discussed under “Risk Factors”, in our Annual Report on Form 10-K could cause our actual results to differ materially from those projected in any forward-looking statements we make. Readers should read carefully the factors described in “Risk Factors” in our Annual Report on Form 10-K to better understand the risks and uncertainties inherent in our business and underlying any forward-looking statements.
Throughout this Quarterly Report on Form 10-Q we use certain defined terms and abbreviations, which are summarized in the “Glossary” and “Acronyms” sections.

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PARTPart I FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements


AXA
3
EQUITABLE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETSConsolidated Balance Sheets
September 30, 2022 (Unaudited) and December 31, 2021
March 31,
2018		 December 31,
2017
(Unaudited)  
(in millions, except
share amounts)		September 30, 2022December 31, 2021
   (in millions, except share data)
ASSETS   ASSETS
Investments: Investments:
Fixed maturities available for sale, at fair value (amortized cost of $43,268 and $45,068)$43,484
 $46,941
Mortgage loans on real estate (net of valuation allowance of $7 and $8)11,333
 10,952
Real estate held for production of income(1)
52
 390
Fixed maturities available-for-sale, at fair value (amortized cost of $75,320 and $73,429) (allowance for credit losses of $22 and $22)Fixed maturities available-for-sale, at fair value (amortized cost of $75,320 and $73,429) (allowance for credit losses of $22 and $22)$64,600 $78,216 
Fixed maturities, at fair value using the fair value option (1)Fixed maturities, at fair value using the fair value option (1)1,548 1,641 
Mortgage loans on real estate (net of allowance for credit losses of $83 and $62) (1)Mortgage loans on real estate (net of allowance for credit losses of $83 and $62) (1)15,688 14,033 
Policy loans3,776
 3,819
Policy loans4,018 4,024 
Other equity investments(1)
1,258
 1,392
Other equity investments (1)3,183 2,975 
Trading securities, at fair value14,919
 14,170
Trading securities, at fair value631 631 
Other invested assets(1)
4,061
 4,118
Other invested assets (1)2,849 3,591 
Total investments78,883
 81,782
Total investments92,517 105,111 
Cash and cash equivalents(1)
6,091
 4,814
Cash and cash equivalents (1)4,139 5,188 
Cash and securities segregated, at fair value1,025
 825
Cash and securities segregated, at fair value1,335 1,504 
Broker-dealer related receivables2,300
 2,158
Broker-dealer related receivables2,539 2,599 
Deferred policy acquisition costs6,288
 5,969
Deferred policy acquisition costs8,244 5,491 
Goodwill and other intangible assets, net4,813
 4,824
Goodwill and other intangible assets, net5,635 4,728 
Amounts due from reinsurers4,953
 5,023
Loans to affiliates885
 1,230
Amounts due from reinsurers (allowance for credit losses of $7 and $5) (includes amounts accounted for at fair value of $4,312 and $5,813) (3)Amounts due from reinsurers (allowance for credit losses of $7 and $5) (includes amounts accounted for at fair value of $4,312 and $5,813) (3)13,378 14,679 
GMIB reinsurance contract asset, at fair value1,734
 1,894
GMIB reinsurance contract asset, at fair value1,289 1,848 
Current and deferred tax assets225
 67
Current and deferred income taxesCurrent and deferred income taxes2,222 195 
Other assets(1)
3,239
 2,510
Other assets (1)4,680 3,613 
Separate Accounts assets121,858
 124,552
Separate Accounts assets109,622 147,306 
Total assets$232,294
 $235,648
   
Total AssetsTotal Assets$245,600 $292,262 
LIABILITIES   LIABILITIES
Policyholders’ account balances$47,666
 $47,171
Policyholders’ account balances$79,999 $79,357 
Future policy benefits and other policyholders’ liabilities29,586
 30,299
Future policy benefits and other policyholders' liabilitiesFuture policy benefits and other policyholders' liabilities34,225 36,717 
Broker-dealer related payables466
 783
Broker-dealer related payables607 1,283 
Securities sold under agreements to repurchase1,904
 1,887
Customers related payables2,549
 2,229
Customer related payablesCustomer related payables3,361 3,600 
Amounts due to reinsurers1,396
 1,436
Amounts due to reinsurers1,348 1,381 
Short-term and Long-term debt(1)
2,373
 2,408
Short-term and long-term debtShort-term and long-term debt4,088 3,931 
Notes issued by consolidated variable interest entities, at fair value using the fair value option (1)Notes issued by consolidated variable interest entities, at fair value using the fair value option (1)1,165 1,191 
Other liabilities (1)Other liabilities (1)5,998 3,933 
Separate Accounts liabilitiesSeparate Accounts liabilities109,622 147,306 
Total LiabilitiesTotal Liabilities$240,413 $278,699 
Redeemable noncontrolling interest (1) (2)Redeemable noncontrolling interest (1) (2)$354 $468 
Commitments and contingent liabilities (4)Commitments and contingent liabilities (4)
EQUITYEQUITY
Equity attributable to Holdings:Equity attributable to Holdings:
Preferred stock and additional paid-in capital, $1 par value and $25,000 liquidation preferencePreferred stock and additional paid-in capital, $1 par value and $25,000 liquidation preference$1,562 $1,562 
Common stock, $0.01 par value, 2,000,000,000 shares authorized; 510,362,388 and 520,918,331 shares issued, respectively; 370,114,999 and 391,290,224 shares outstanding, respectivelyCommon stock, $0.01 par value, 2,000,000,000 shares authorized; 510,362,388 and 520,918,331 shares issued, respectively; 370,114,999 and 391,290,224 shares outstanding, respectively4 4 
Additional paid-in capitalAdditional paid-in capital2,027 1,919 
Treasury stock, at cost, 140,247,389 and 129,628,107 shares, respectivelyTreasury stock, at cost, 140,247,389 and 129,628,107 shares, respectively(3,202)(2,850)
Retained earningsRetained earnings10,839 8,880 
Accumulated other comprehensive income (loss)Accumulated other comprehensive income (loss)(7,876)2,004 
Total equity attributable to HoldingsTotal equity attributable to Holdings3,354 11,519 
Noncontrolling interestNoncontrolling interest1,479 1,576 
Total EquityTotal Equity4,833 13,095 
Total Liabilities, Redeemable Noncontrolling Interest and EquityTotal Liabilities, Redeemable Noncontrolling Interest and Equity$245,600 $292,262 


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AXA EQUITABLE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS—CONTINUED


 March 31,
2018		 December 31,
2017
 (Unaudited)  
 (in millions, except
share amounts)
Loans from affiliates2,530
 3,622
Other liabilities(1)
4,342
 4,053
Separate Accounts liabilities121,858
 124,552
Total liabilities$214,670
 $218,440
Redeemable noncontrolling interest(1)
$1,024
 $626
Commitments and contingent liabilities (Note 14)
 
    
EQUITY   
Equity attributable to Holdings:   
Common stock, $0.01 par value, 2,000,000,000 shares authorized and 561,000,000 issued and outstanding$6
 $6
Capital in excess of par value2,050
 1,298
Retained earnings12,455
 12,289
Accumulated other comprehensive income (loss)(946) (108)
Total equity attributable to Holdings13,565
 13,485
Noncontrolling interest3,035
 3,097
Total equity16,600
 16,582
Total Liabilities, Redeemable Noncontrolling Interest and Equity$232,294
 $235,648

____________
(1) See Note 2 of the Notes to these Consolidated Financial Statements for details of balances with variable interest entities.VIEs.

(2) See Note 11 of the Notes to these Consolidated Financial Statements for details of redeemable noncontrolling interest.
(3) Represents the fair value of the ceded reserves to Venerable. See Note 1 of the Notes to these Consolidated Financial Statements for details of the Venerable Transaction and Note 7 of the Notes to these Consolidated Financial Statements.
(4) See Note 12 of the Notes to these Consolidated Financial Statements for details of commitments and contingent liabilities.


See Notes to Consolidated Financial Statements (Unaudited).

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AXA EQUITABLE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)Consolidated Statements of Income (Loss)
(UNAUDITED)

Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited)


Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions, except per share data)
REVENUES
Policy charges and fee income$796 $867 $2,449 $2,755 
Premiums259 230 744 729 
Net derivative gains (losses)68 (185)3,118 (3,930)
Net investment income (loss)842 997 2,357 2,914 
Investment gains (losses), net:
Credit and intent to sell losses on available for sale debt securities and loans(267)(2)(266)4 
Other investment gains (losses), net(65)165 (624)763 
Total investment gains (losses), net(332)163 (890)767 
Investment management and service fees1,179 1,323 3,731 3,898 
Other income197 220 612 585 
Total revenues3,009 3,615 12,121 7,718 
BENEFITS AND OTHER DEDUCTIONS
Policyholders’ benefits625 751 2,599 2,518 
Interest credited to policyholders’ account balances378 305 1,002 905 
Compensation and benefits566 614 1,679 1,762 
Commissions and distribution-related payments368 436 1,184 1,215 
Interest expense51 59 148 184 
Amortization of deferred policy acquisition costs105 64 446 257 
Other operating costs and expenses497 456 1,617 1,511 
Total benefits and other deductions2,590 2,685 8,675 8,352 
Income (loss) from continuing operations, before income taxes419 930 3,446 (634)
Income tax (expense) benefit(92)(165)(707)222 
Net income (loss)327 765 2,739 (412)
Less: Net income (loss) attributable to the noncontrolling interest54 93 165 281 
Net income (loss) attributable to Holdings$273 $672 $2,574 $(693)
Less: Preferred stock dividends14 14 54 53 
Net income (loss) available to Holdings’ common shareholders$259 $658 $2,520 $(746)
EARNINGS PER COMMON SHARE
Net income (loss) applicable to Holdings’ common shareholders per common share:
Basic$0.69 $1.60 $6.62 $(1.76)
Diluted$0.69 $1.59 $6.58 $(1.76)
Weighted average common shares outstanding (in millions):
Basic374.5 411.3 380.6 423.2 
Diluted376.8 414.6 382.9 423.2 
 Three Months Ended
March 31,
 2018 2017
 (in millions, except earnings per share amounts)
REVENUES   
Policy charges and fee income$972
 $956
Premiums279
 281
Net derivative gains (losses)(281) (235)
Net investment income (loss)591
 780
Investment gains (losses), net:   
Total other-than-temporary impairment losses—
 (1)
Other investment gains (losses), net102
 (23)
Total investment gains (losses), net102
 (24)
Investment management and service fees1,055
 954
Other income117
 118
Total revenues2,835
 2,830
BENEFITS AND OTHER DEDUCTIONS   
Policyholders’ benefits608
 1,093
Interest credited to policyholders’ account balances271
 246
Compensation and benefits (includes $40 and $41 of deferred acquisition costs)620
 539
Commissions and distribution related payments (includes $120 and $132 of deferred acquisition costs)411
 395
Interest expense46
 35
Amortization of deferred policy acquisition costs, net (net of capitalization of $160 and $173)15
 (55)
Other operating costs and expenses494
 744
Total benefits and other deductions2,465
 2,997
Income (loss) from continuing operations, before income taxes370
 (167)
Income tax (expense) benefit(79) (30)
Net income (loss)291
 (197)
Less: net (income) loss attributable to the noncontrolling interest(123) (93)
Net income (loss) attributable to Holdings$168
 $(290)
    
EARNINGS PER SHARE   
Earnings per share - Common stock   
Basic$0.30
 $(0.52)
Diluted$0.30
 $(0.52)
Weighted average common shares outstanding561
 561



See Notes to Consolidated Financial Statements (Unaudited).

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AXA EQUITABLE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)Consolidated Statements of Comprehensive Income (Loss)
(UNAUDITED)Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
COMPREHENSIVE INCOME (LOSS)
Net income (loss)$327 $765 $2,739 $(412)
Other comprehensive income (loss) net of income taxes:
Change in unrealized gains (losses), net of reclassification adjustment(2,326)(123)(9,894)(2,056)
Changes in defined benefit plan related items not yet recognized in periodic benefit cost, net of reclassification adjustment16 22 61 77 
Foreign currency translation adjustment(30)(9)(75)(13)
Total other comprehensive income (loss), net of income taxes(2,340)(110)(9,908)(1,992)
Comprehensive income (loss)(2,013)655 (7,169)(2,404)
Less: Comprehensive income (loss) attributable to the noncontrolling interest42 90 137 276 
Comprehensive income (loss) attributable to Holdings$(2,055)$565 $(7,306)$(2,680)
 Three Months Ended
March 31,
 2018 2017
 (in millions)
COMPREHENSIVE INCOME (LOSS)   
Net income (loss)$291
 $(197)
Other comprehensive income (loss) net of income taxes:   
Foreign currency translation adjustment(5) 8
Change in unrealized gains (losses), net of reclassification adjustment(960) 104
Changes in defined benefit plan related items not yet recognized in periodic benefit cost, net of reclassification adjustment133
 25
Total other comprehensive income (loss), net of income taxes(832) 137
Comprehensive income (loss)(541) (60)
Less: Comprehensive (income) loss attributable to noncontrolling interest(129) (100)
Comprehensive income (loss) attributable to Holdings$(670) $(160)


See Notes to Consolidated Financial Statements (Unaudited).

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AXA EQUITABLE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EQUITYConsolidated Statements of Equity
(UNAUDITED)For the Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited)


Three Months Ended September 30,
Equity Attributable to Holdings
Preferred Stock and Additional Paid-In CapitalCommon StockAdditional Paid-in CapitalTreasury StockRetained EarningsAccumulated Other Comprehensive Income (Loss)Total Holdings EquityNon-controlling InterestTotal Equity
(in millions)
July 1, 2022$1,562 $4 $1,918 $(3,065)$10,718 $(5,548)$5,589 $1,410 $6,999 
Stock compensation— — 33 3 — — 36 9 45 
Purchase of treasury stock— — (1)(200)— — (201)— (201)
Reissuance of treasury stock— — — — (3)— (3)— (3)
Retirement of common stock— — — 60 (60)— — — — 
Repurchase of AB Holding units— — — — — — — (1)(1)
Dividends paid to noncontrolling interest— — — — — — — (79)(79)
Issuance of AB Units for CarVal acquisition— — 55 — — — 55 78 133 
Dividends on common stock (cash dividends declared per common share of $0.20)— — — — (75)— (75)— (75)
Issuance of preferred stock— — — — — — — — — 
Dividends on preferred stock— — — — (14)— (14)— (14)
Net income (loss)— — — — 273 — 273 62 335 
Other comprehensive income (loss)— — — — — (2,328)(2,328)(12)(2,340)
Other— — 22 — — — 22 12 34 
September 30, 2022$1,562 $4 $2,027 $(3,202)$10,839 $(7,876)$3,354 $1,479 $4,833 
 Three Months Ended
March 31,
 2018 2017
 (in millions)
Equity attributable to Holdings:  
Common stock, at par value, beginning of year and end of period$6
 $6
    
Capital in excess of par value, beginning of year$1,298
 $931
Capital contribution from parent695
 —
Changes in capital in excess of par value57
 11
Capital in excess of par value, end of period$2,050
 $942
    
Retained earnings, beginning of year$12,289
 $11,439
Impact of adoption of revenue recognition standard ASC 60613
 —
Net income (loss)168
 (290)
Stockholder dividends(15) —
Retained earnings, end of period$12,455
 $11,149
    
Accumulated other comprehensive income (loss), beginning of year$(108) $(921)
Other comprehensive income (loss)(838) 130
Accumulated other comprehensive income (loss), end of period(946) (791)
Total Holdings’ equity, end of period$13,565
 $11,306
    
Noncontrolling interest, beginning of year$3,097
 $3,142
Impact of adoption of revenue recognition standard ASC 60619
 —
Repurchase of AB Holding units(1) —
Net income (loss) attributable to noncontrolling interest103
 77
Dividends paid to noncontrolling interest(135) (108)
Other comprehensive income (loss) attributable to noncontrolling interest6
 7
Other changes in noncontrolling interest(54) (13)
Noncontrolling interest, end of period3,035
 3,105
Total Equity, End of Period$16,600
 $14,411


July 1, 2021$1,562 $5 $1,980 $(2,537)$8,739 $1,983 $11,732 $1,572 $13,304 
Stock compensation— — (26)(1)— — (27)27 — 
Purchase of treasury stock— — 3 (462)— — (459)— (459)
Retirement of common stock— — — 463 (463)— — — — 
Repurchase of AB Holding units— — — — — — — (95)(95)
Dividends paid to noncontrolling interest— — — — — — — (101)(101)
Stockholder dividends (cash dividends declared per common share of $0.18)— — — — (74)— (74)— (74)
Dividends on preferred stock— — — — (14)— (14)— (14)
Net income (loss)— — — — 672 — 672 93 765 
Other comprehensive income (loss)— — — — — (107)(107)(3)(110)
Other— — (40)— (3)— (43)(1)(44)
September 30, 2021$1,562 $5 $1,917 $(2,537)$8,857 $1,876 $11,680 $1,492 $13,172 

See Notes to Consolidated Financial Statements (Unaudited).

7


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AXA EQUITABLE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWSConsolidated Statements of Equity
(UNAUDITED)

For the Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited)

Nine Months Ended September 30,
Equity Attributable to Holdings
Preferred Stock and Additional Paid-In CapitalCommon StockAdditional Paid-in CapitalTreasury StockRetained EarningsAccumulated Other Comprehensive Income (Loss)Total Holdings EquityNon-controlling InterestTotal Equity
(in millions)
January 1, 2022$1,562 $4 $1,919 $(2,850)$8,880 $2,004 $11,519 $1,576 $13,095 
Stock compensation— — 68 39 — — 107 36 143 
Purchase of treasury stock— — (6)(693)— — (699)— (699)
Reissuance of treasury stock— — — — (39)— (39)— (39)
Retirement of common stock— — — 302 (302)— — — — 
Repurchase of AB Holding units— — — — — — — (108)(108)
Dividends paid to noncontrolling interest— — — — — — — (318)(318)
Issuance of AB Units for CarVal acquisition— — 55 — — — 55 78 133 
Dividends on common stock (cash dividends declared per common share of $0.58)— — — — (220)— (220)— (220)
Dividends on preferred stock— — — — (54)— (54)— (54)
Issuance of preferred stock— — — — — — — — — 
Net income (loss)— — — — 2,574 — 2,574 229 2,803 
Other comprehensive income (loss)— — — — — (9,880)(9,880)(28)(9,908)
Other— — (9)— — — (9)14 5 
September 30, 2022$1,562 $4 $2,027 $(3,202)$10,839 $(7,876)$3,354 $1,479 $4,833 
 Three Months Ended
March 31,
 2018 2017
 (in millions)
Net income (loss)$291
 $(197)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:   
Interest credited to policyholders’ account balances271
 246
Policy charges and fee income(972) (956)
Realized and unrealized gains (losses) on trading securities120
 (91)
Net derivative (gains) losses281
 235
Investment (gains) losses, net(102) 24
Non-cash pension restructuring102
 —
Amortization of deferred compensation12
 8
Amortization of deferred sales commission7
 9
Other depreciation and amortization(20) (42)
Amortization of deferred cost of reinsurance asset5
 5
Change in goodwill—
 369
Distribution from joint ventures and limited partnerships25
 26
Changes in:   
Net broker-dealer and customer related receivables/payables283
 297
Reinsurance recoverable32
 27
Segregated cash and securities, net(208) (310)
Deferred policy acquisition costs15
 (55)
Future policy benefits(254) 296
Current and deferred income taxes103
 252
Other, net(255) (71)
Net cash provided by (used in) operating activities(264) 72
    
Cash flows from investing activities:   
Proceeds from the sale/maturity/prepayment of:   
Fixed maturities, available for sale4,288
 1,033
Mortgage loans on real estate68
 209
Trading account securities1,629
 2,844
Other54
 56
Payment for the purchase/origination of:   
Fixed maturities, available for sale(3,245) (1,428)
Mortgage loans on real estate(447) (632)
Trading account securities(2,613) (3,928)
Other(48) (28)
Cash settlements related to derivative instruments(54) (1,400)
Decrease in loans to affiliates346
 12
Change in short-term investments876
 573
January 1, 2021$1,269 $5 $1,985 $(2,245)$10,699 $3,863 $15,576 $1,601 $17,177 
Stock compensation— — 5 46 — — 51 38 89 
Purchase of treasury stock— — (8)(1,160)— — (1,168)— (1,168)
Reissuance of treasury stock— — — — (47)— (47)— (47)
Retirement of common stock— — — 822 (822)— — — — 
Repurchase of AB Holding units— — — — — — — (122)(122)
Dividends paid to noncontrolling interest— — — — — — — (296)(296)
Dividends on common stock (cash dividends declared per common share of $0.53)— — — — (224)— (224)— (224)
Dividends on preferred stock— — — — (53)— (53)— (53)
Issuance of preferred stock293 — — — — — 293 — 293 
Net income (loss)— — — — (693)— (693)277 (416)
Other comprehensive income (loss)— — — — (1,987)(1,987)(5)(1,992)
Other— — (65)— (3)— (68)(1)(69)
September 30, 2021$1,562 $5 $1,917 $(2,537)$8,857 $1,876 $11,680 $1,492 $13,172 




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AXA EQUITABLE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS—CONTINUED
(UNAUDITED)


 Three Months Ended
March 31,
 2018 2017
Investment in capitalized software, leasehold improvements and EDP equipment(24) (19)
Other, net(371) (191)
Net cash provided by (used in) investing activities459
 (2,899)
    
Cash flows from financing activities:   
Policyholders’ account balances:   
Deposits2,532
 2,790
Withdrawals(1,384) (1,342)
       Transfer (to) from Separate Accounts(102) 186
Change in short-term financings167
 95
Repayment of loans from affiliates—
 (56)
Proceeds from loans from affiliates—
 109
Change in collateralized pledged assets17
 347
Change in collateralized pledged liabilities56
 967
(Decrease) increase in overdrafts payable7
 50
Cash Contribution from Parent8
 —
Shareholder dividend paid(15) —
Repurchase of AB Holding units(1) (31)
Redemptions of non-controlling interests of consolidated VIEs, net373
 (3)
Distribution to noncontrolling interests in consolidated subsidiaries(135) (112)
Increase (decrease) in Securities sold under agreement to repurchase17
 (370)
Increase (decrease) in loans from affiliates(470) —
Other, net4
 —
Net cash provided by (used in) financing activities1,074
 2,630
Effect of exchange rate changes on cash and cash equivalents8
 8
Change in cash and cash equivalents1,277
 (189)
Cash and cash equivalents, beginning of year4,814
 5,654
Cash and Cash Equivalents, End of Period$6,091
 $5,465
    
Non-cash transactions during the Period   
Capital contribution from Parent$630
 $—
Repayment of Loans from affiliates$(622) $—
Contribution of 0.5% minority interest in AXF$65
 $—
Repayment of long-term debt$202
 $—


See Notes to Consolidated Financial Statements (Unaudited).

8
EQUITABLE HOLDINGS, INC.
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2022 and 2021 (Unaudited)





Nine Months Ended September 30,
20222021
(in millions)
Cash flows from operating activities:
Net income (loss)$2,739 $(412)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Interest credited to policyholders’ account balances1,002 905 
Policy charges and fee income(2,449)(2,755)
Net derivative (gains) losses(3,118)3,930 
Credit and intent to sell losses on available for sale debt securities and loans266 (4)
Investment (gains) losses, net624 (761)
(Gains) losses on businesses HFS— (2)
Realized and unrealized (gains) losses on trading securities239 48 
Non-cash long-term incentive compensation expense104 34 
Amortization and depreciation587 336 
Equity (income) loss from limited partnerships(128)(431)
Changes in:
Net broker-dealer and customer related receivables/payables(195)(625)
Reinsurance recoverable (1)(846)(758)
Segregated cash and securities, net169 845 
Capitalization of deferred policy acquisition costs(645)(620)
Future policy benefits122 (107)
Current and deferred income taxes589 (516)
Other, net195 539 
Net cash provided by (used in) operating activities$(745)$(354)
Cash flows from investing activities:
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available-for-sale$14,413 $25,911 
Fixed maturities, at fair value using the fair value option433 610 
Mortgage loans on real estate901 1,417 
Trading account securities205 5,115 
Short term investments313 84 
Other454 1,447 
Payment for the purchase/origination of:
Fixed maturities, available-for-sale(17,022)(33,276)
Fixed maturities, at fair value using the fair value option(416)(1,564)
Mortgage loans on real estate(2,604)(1,680)
Trading account securities(185)(178)
Short term investments(676)(14)
Other(992)(2,259)
Purchase of business, net of cash acquired40 — 
Cash from the sale of business, net of cash sold— 215 
Cash settlements related to derivative instruments, net799 (6,502)
Repayments of loans to affiliates— — 
Investment in capitalized software, leasehold improvements and EDP equipment(102)(93)




See Notes to Consolidated Financial Statements (Unaudited).
9
EQUITABLE HOLDINGS, INC.
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2022 and 2021 (Unaudited)





Nine Months Ended September 30,
20222021
(in millions)
Other, net167 (8)
Net cash provided by (used in) investing activities$(4,272)$(10,775)
Cash flows from financing activities:
Policyholders’ account balances:
Deposits$11,680 $12,760 
Withdrawals(5,011)(4,617)
Transfers (to) from Separate Accounts1,148 1,455 
Change in short-term financings155 1 
Change in collateralized pledged assets37 55 
Change in collateralized pledged liabilities(2,472)1,494 
(Decrease) increase in overdrafts payable(20)25 
Repayment of long-term debt— (280)
Repayment of acquisition-related debt obligation(43)— 
Proceeds from notes issued by consolidated VIEs(34)874 
Dividends paid on common stock(220)(224)
Dividends paid on preferred stock(54)(53)
Issuance of preferred stock— 293 
Purchases of AB Holding Units to fund long-term incentive compensation plan awards(108)(122)
Purchase of treasury shares(699)(1,169)
Purchases (redemptions) of noncontrolling interests of consolidated
company-sponsored investment funds		(49)23 
Distribution to noncontrolling interest of consolidated subsidiaries(318)(296)
Other, net65 (38)
Net cash provided by (used in) financing activities$4,058 $10,181 
Effect of exchange rate changes on cash and cash equivalents$(90)$(15)
Change in cash and cash equivalents(1,049)(963)
Cash and cash equivalents, beginning of year5,188 6,179 
Change in cash of businesses held-for-sale— 39 
Cash and cash equivalents, end of year$4,139 $5,255 
Non-cash transactions from investing and financing activities:
Right-of-use assets obtained in exchange for lease obligations$54 $93 
Transfer of assets to reinsurer$— $(9,023)
_______________
(1) Amount includes cash paid for Venerable Transaction of $494 million. See the Note 1 of the Notes to these Consolidated Financial Statements.




See Notes to Consolidated Financial Statements (Unaudited).
10
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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)Notes to Consolidated Financial Statements (Unaudited)



1)    ORGANIZATION
Business
AXA Equitable Holdings, Inc. (“Holdings” and, collectively with its consolidated subsidiaries, the “Company”) is the holding company for a diversified financial services organization. In May 2017, AXA S.A. (“AXA”), a French holding company for the AXA Group, a worldwide leader in life, property and casualty and health insurance and asset management, announced its intention to pursue the sale of a minority stake in Holdings through an initial public offering (the “IPO”). On May 14, 2018, Holdings completed the IPO in which AXA sold 157,837,500 shares of Holdings common stock to the public. Following the IPO, AXA owns approximately 71.9% of the outstanding common stock of Holdings.
The Company conducts operations in four segments: Individual Retirement, Group Retirement, Investment Management and Research, and Protection Solutions. The Company’s management evaluates the performance of each of these segments independently.
•The Individual Retirement segment offers a diverse suite of variable annuity products which are primarily sold to affluent and high net worth individuals saving for retirement or seeking retirement income.
•The Group Retirement segment offers tax-deferred investment and retirement services or products to plans sponsored by educational entities, municipalities and not-for-profit entities, as well as small and medium-sized businesses.
•The Investment Management and Research segment provides diversified investment management, research and related solutions globally to a broad range of clients through three main client channels—channels - Institutional, Retail and Private Wealth Management—- and distributes its institutional research products and solutions through Bernstein Research Services. The Investment Management and Research segment reflects the business of AllianceBernsteinAB Holding L.P. (“AB Holding”), AllianceBernstein L.P. (“ABLP”)and ABLP and their subsidiaries (collectively, “AB”)AB).
•The Protection Solutions segment includes the Company’s life insurance and group employee benefits businesses. The life insurance business offers a variety of variable universal life, indexed universal lifeVUL, IUL and term life products to help affluent and high net worth individuals, as well as small and medium-sized business owners, with their wealth protection, wealth transfer and corporate needs. Our group employee benefits business offers a suite of life, short- and long-term disability, dental and vision insurance products to small and medium-size businesses across the United States.
The Company reports certain activities and items that are not included in our segments in Corporate and Other. Corporate and Other includes certain of our financing and investment expenses. It also includes: the AXAEquitable Advisors broker-dealer business, closed block of life insurance (the “Closed Block”), run-off variable annuity reinsurance business, run-off group pension business, run-off health business, benefit plans for our employees, certain strategic investments and certain unallocated items, including capital and related investments, interest expense and corporate expense. AB’s results of operations are reflected in the Investment Management and Research segment. Accordingly, Corporate and Other does not include any items applicable to AB.
At MarchAs of September 30, 2022 and December 31, 2018 and March 31, 2017, the Company’s economic interest in AB was 46.5% and 45.8%, respectively. At March 31, 2018 and March 31, 2017, respectively, AXA and its subsidiaries’ economic interest in AB was 64.4% and 63.8%.
In March 2018, AXA contributed the 0.5% minority interest in AXA Financial, Inc. (“AXA Financial”) to Holdings so that Holdings now owns 100% of AXA Financial.


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

On April 23, 2018, Holdings entered into a Purchase Agreement (the “Purchase Agreement”) with Coliseum Reinsurance Company (“Coliseum”), an affiliate, relating to the purchase and sale of all of the units of limited partnership of ABLP (the “AB Units”) owned by Coliseum. Pursuant to the Purchase Agreement, Holdings purchased from Coliseum 8,160,000 AB Units owned by Coliseum at a purchase price of $26.54 per AB Unit.
On April 23, 2018, Holdings entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with AXA Investment Managers S.A., an affiliate, relating to the purchase and sale of all of the issued and outstanding shares of common stock of AXA-IM Holding U.S., Inc. As a result of the transactions contemplated by the Stock Purchase Agreement, Holdings acquired beneficial ownership to the 41,934,582 AB Units owned by AXA-IM Holding U.S., Inc.
As a result of these transactions, at April 30, 2018,2021, the Company’s economic interest in AB was approximately 65.0%.64% and 65%, respectively. The general partnerslight decrease was due to the issuance of AB AllianceBernstein Corporation (the “General Partner”Units relating to AB’s 100% acquisition of CarVal Investments L.P. (“CarVal”),. On July 1, 2022, AB issued 3.2 million AB Units (with a fair value of $133 million) and recorded a $419 million liability for the issuance of additional AB Units on November 1, 2022. AB also recorded a contingent consideration payable of $227 million (to be paid predominantly in AB Units) based on CarVal achieving certain performance objectives over a six-year period ending December 31, 2027. The General Partner of AB is a wholly-owned subsidiary of the Company. Because the General Partner has the authority to manage and control the business of AB, AB is consolidated in the Company’s financial statements.statements for all periods presented.
See Note 18On June 1, 2021, Holdings completed the sale (the “Venerable Transaction”) of CS Life, to Venerable Insurance and Annuity Company, an insurance company domiciled in Iowa (“VIAC”), pursuant to the Master Transaction Agreement, dated October 27, 2020 (the “Master Transaction Agreement”), among the Company, VIAC and, solely with respect to Article XIV thereof, Venerable Holdings, Inc., a Delaware corporation (“Venerable”).
Pursuant to the Master Transaction Agreement, immediately prior to the closing of the Venerable Transaction, CS Life effected the recapture of all of the business that was ceded to CS Life Re Company, a wholly owned subsidiary of CS Life (“Reinsurance Subsidiary”), and sold 100% of the equity of the Reinsurance Subsidiary to another wholly owned subsidiary of the Company.
VIAC paid the Company a cash purchase price of $215 million for CS Life at closing. The post-closing true-up adjustment was immaterial. VIAC also issued a surplus note in aggregate principal amount of $60 million, to Equitable Financial Life Insurance Company, a New York-domiciled life insurance company and a wholly owned subsidiary of Holdings, for cash consideration.
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

Immediately following the closing of the Venerable Transaction, CS Life and Equitable Financial entered into a coinsurance and modified coinsurance agreement (the “Reinsurance Agreement”), pursuant to which Equitable Financial ceded to CS Life, on a combined coinsurance and modified coinsurance basis, legacy variable annuity policies sold by Equitable Financial between 2006-2008 (the “Block”), comprised of non-New York “Accumulator” policies containing fixed rate Guaranteed Minimum Income Benefit and/or Guaranteed Minimum Death Benefit guarantees. At the closing of the Transaction, CS Life deposited assets supporting the general account liabilities relating to the Block into a trust account for additional information on these subsequent events.the benefit of Equitable Financial, which assets will secure its obligations to Equitable Financial under the Reinsurance Agreement. At the closing of the Transaction, ABLP, entered into an investment advisory agreement with CS Life pursuant to which ABLP will serve as the preferred investment manager of the general account assets transferred to the trust account. The Company transferred assets of $9.5 billion, including primarily available for sale securities and cash, to a collateral trust account as the consideration for the reinsurance transaction. In addition, the Company recorded $9.6 billion of direct insurance liabilities ceded under the reinsurance contract, of which $5.3 billion is accounted at fair value, as the reinsurance of GMxB with no lapse guarantee riders are embedded derivatives. Additionally, $16.9 billion of Separate Account liabilities were ceded under a modified coinsurance portion of the agreement.
In addition, upon the completion of the Venerable Transaction, EIMG acquired an approximate 9.09% equity interest in Venerable’s parent holding company, VA Capital Company LLC. In connection with such investment, EIMG designated a member to the Board of Managers of VA Capital Company LLC.

2)     SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The Unaudited Interim Consolidated Financial Statementsunaudited interim consolidated financial statements (the “consolidated financial statements”) have been prepared in accordanceconformity with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to the Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Intercompany balances and transactions have been eliminated.
In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Company’s Consolidated Financial Statementsconsolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.2021.
The accompanying unaudited consolidated financial statements present the consolidated results of operations, financial condition, and cash flows of the Company and its subsidiaries and those investment companies, partnerships and joint ventures in which the Company has control and a majority economic interest as well as those variable interest entities (“VIEs”) that meet the requirements for consolidation.
All significant intercompany transactions and balances have been eliminated in consolidation. The terms “first“third quarter 2018”2022” and “first“third quarter 2017”2021” refer to the three months ended March 31, 2018September 30, 2022 and 2017,2021, respectively. The terms “first threenine months of 2018”2022” and “first threenine months of 2017”2021” refer to the threenine months ended March 31, 2018September 30, 2022 and 2017,2021, respectively.

Certain prior year amounts have been reclassified to conform to the current year’s presentation.

2)    SIGNIFICANT ACCOUNTING POLICIES
Adoption of NewRecent Accounting Pronouncements
In May 2014,Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) issued new guidance that revises the recognition criteria for revenue arising from contracts with customers to provide goods or services, except when those revenue streams are from insurance and investment contracts, leases, rights and obligations that are in the scope of certain financial instruments (i.e., derivative contracts) and guarantees other than product or service warranties, for which existing revenue recognition requirements are not superseded by this guidance. On January 1, 2018, the Company adopted the new revenue recognition guidance on a modified retrospective basis and is providing in its first quarter 2018 reporting the additional disclosures required by the new standard. Adoption of this new guidance did not change the amounts or timing of the Company’s revenue recognition for base investment management and advisory fees, distribution revenues, shareholder servicing revenues, and broker-dealer revenues. However, some performance-based fees and carried-interest distributions that prior to adoption were recognized when no risk of reversal remained, in certain instances under the new standard may be recognized earlier if it is probable that significant reversal will not occur. As a result, on January 1, 2018, the Company recognized a cumulative effect adjustment, net of tax, to increase opening equity attributable to Holdings and the noncontrolling interest by approximately $13 million and $19 million,


12
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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

respectively, reflecting the impact of carried-interest distributions previously received by AB of approximately $78 million, net of revenue sharing payments to investment team members of approximately $43 million, for which it is probable that significant reversal will not occur and for which incremental tax is provided at Holdings.
In January 2016, the FASB issued new guidance related to the recognition and measurement of financial assets and financial liabilities. The new guidance primarily affects the accounting for equity investments, financial liabilities under the fair value option, and presentation and disclosure requirements for financial instruments. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale (“AFS”) debt securities.  The new guidance requires equity investments in unconsolidated entities, except those accounted for under the equity method, to be measured at fair value through earnings, thereby eliminating the AFS classification for equity securities with readily determinable fair values for which changes in fair value currently are reported in Accumulated Other Comprehensive Income (Loss) (“AOCI”). On January 1, 2018, the Company adopted the new recognition requirements on a modified retrospective basis for changes in the fair value of AFS equity securities, resulting in no material reclassification adjustment from AOCI to opening retained earnings for the net unrealized gains, net of tax, related to approximately $46 million common stock securities and eliminated their designation as AFS equity securities. The new guidance does not apply to FHLB common stock and prohibits such investments from being classified as equity securities subject to the new guidance. Accordingly, the Company has classified its investment in the FHLB common stock as other invested assets at March 31, 2018. The Company’s investment assets held in the form of equity interests in unconsolidated entities, such as limited partnerships and limited liability companies, including hedge funds, private equity funds, and real estate-related funds, generally are accounted for underAccounting Standards Updates (“ASUs”) to the equity method and were not impacted by this new guidance.FASB Accounting Standards Codification (“ASC”). The Company doesconsiders the applicability and impact of all ASUs. ASUs listed below include those that have been adopted during the current fiscal year and/or those that have been issued but not currently report anyyet adopted as of its financial liabilities under the fair value option. 
In March 2017, the FASB issued new guidance on the presentationSeptember 30, 2022, and as of net periodic pension and post-retirement benefit costs that requires retrospective disaggregation of the service cost component from the other components of net benefit costs on the income statement. The service cost component is required to be presented with other employee compensation costs in “income from operations,” and the remaining components are to be reported separately outside of income from operations. While this standard did not change how net periodic pension and post-retirement benefit costs are measured, it limits the amount eligible for capitalization on a prospective basis to the service cost component. On January 1, 2018, the Company adopted the change in the income statement presentation utilizing the practical expedient for determining the historical components of net benefit costs, resulting in no material impact to the consolidated financial statements. In addition, no changes to the Company’s capitalization policies with respect to benefit costs resulted from the adoption of the new guidance.
In May 2017, the FASB issued guidance on share-based payments. The amendment provides clarity intended to reduce diversity in practice and the cost and complexity of accounting for changes to the terms or conditions of share-based payment awards. The new guidance is effective for interim and annual periods beginning after December 15, 2017 and requires prospective application to awards modified on or after the date of adoption. Adoptionthis filing. ASUs not listed below were assessed and determined to be either not applicable or not material.

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Table of this amendment on January 1, 2018 did not have a material impact on the Company’s consolidated financial statements.Contents
In August 2016, the FASB issued new guidanceEQUITABLE HOLDINGS, INC.
Notes to simplify elements of cash flow classification. The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The new guidance is effective for interim and annual periods beginning after December 15, 2017 and requires application of a retrospective transition method. Adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.Consolidated Financial Statements (Unaudited), Continued

Future Adoption of New Accounting Pronouncements
Description
Effective Date and Method of Adoption
Effect on the Financial Statement or Other Significant Matters
ASU 2018-12: Financial Services - Insurance (Topic 944); ASU 2020-11: Financial Services - Insurance (Topic 944): Effective Date and Early Application
This ASU provides targeted improvements to existing recognition, measurement, presentation, and disclosure requirements for long-duration contracts issued by an insurance entity. The ASU primarily impacts four key areas, including:
1. Measurement of the liability for future policy benefits for traditional and limited payment contracts. The ASU requires companies to review, and if necessary, update cash flow assumptions at least annually for non-participating traditional and limited-payment insurance contracts. The ASU also prescribes the discount rate to be used in measuring the liability for future policy benefits for traditional and limited payment long-duration contracts.

2. Measurement of MRBs. MRBs, as defined under the ASU, will encompass certain GMxB features associated with variable annuity products and other general account annuities with other than nominal market risk.

3. Amortization of deferred acquisition costs. The ASU simplifies the amortization of deferred acquisition costs and other balances amortized in proportion to premiums, gross profits, or gross margins, requiring such balances to be amortized on a constant level basis over the expected term of the contracts.

4. Expanded footnote disclosures. The ASU requires additional disclosures including information about significant inputs, judgements, assumptions and methods used in measurement.
In November 2020, the FASB issued ASU 2020-11 which deferred the effective date of the amendments in ASU 2018-12 for all insurance entities. ASU 2018-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption is allowed.

For the liability for future policyholder benefits for traditional and limited payment contracts, companies can elect one of two adoption methods. Companies can either elect a modified retrospective transition method applied to contracts in force as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in AOCI or a full retrospective transition method using actual historical experience information as of contract inception. The same adoption method must be used for deferred policy acquisition costs.

For MRBs, the ASU should be applied retrospectively as of the beginning of the earliest period presented.		The Company continues to progress with implementation efforts and the evaluation of the impact that adoption of this guidance will have on the Company’s consolidated financial statements. Due to its extensive nature, the adoption of the ASU is expected to have a significant impact on the Company’s consolidated financial statements, as well as systems, processes and controls. Effective January 1, 2023, the new guidance will be adopted using the modified retrospective approach, except for MRBs which will use the full retrospective approach.

The Company has created a governance framework and implementation plan to ensure timely adoption of the guidance. In preparation for implementation, the Company continues to refine key accounting policy decisions, modernize processes and update internal controls. These changes include modifications of actuarial valuation systems, data sourcing, analytical procedures and reporting processes.

The impact on total equity of applying this ASU is estimated to be neutral to the current amount of reported total equity as of September 30, 2022. As of September 30, 2022, a positive impact to AOCI is expected due to increases in the Company’s estimate of its non-performance risk on variable annuity guarantees accounted for as MRBs for the first time under the guidance. The estimated impact to the retained earnings element of total equity as of September 30, 2022, due to accounting for variable annuity guarantees as MRBs that are not currently measured at fair value, is mitigated by the Company’s present use of a near industry low interest rate assumption of 2.25% on GMIB business. Because movements in equity markets, interest rates and credit spreads are unpredictable and at times volatile, it is possible that the estimated effects of adoption could change materially between September 30, 2022 and January 1, 2023.
In February 2018,

Securities Sold under Agreements to Repurchase

Securities sold under agreements to repurchase involve the FASB issued new guidance that will permit, but not require, entitiestemporary exchange of securities for cash or
other collateral of equivalent value, with agreement to reclassify to retained earnings tax effects “stranded” in AOCI resulting fromredeliver a like quantity of the change in federal tax rate enacted by the Tax Cuts and Jobs Act (the “Tax Reform Act”) on December 22, 2017. An entity that elects this option must reclassify these stranded tax effects for all items in AOCI, including, but not limited to, AFSsame or similar securities and employee benefits. Tax effects stranded in AOCI for other reasons, such as prior changes in tax law, may not be reclassified. While the new guidance provides entities the option to reclassify these amounts, new disclosures are required regardless of whether entities elect to do

at a

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNotes to Consolidated Financial Statements (Unaudited), Continued
(UNAUDITED)

future date prior to maturity at a fixed and determinable price. Securities sold under agreements to repurchase
so. The new guidance is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. Election can be made either to apply the new guidance retrospectively to each period in which the effect of the Tax Reform Act is recognized or in the period of adoption. Management currently is evaluating the options provided for adopting this guidance and the potential impacts on the Company’s consolidated financial statements.
In August 2017, the FASB issued new guidance on accounting for hedging activities, intended to more closely align the financial statement reporting of hedging relationships to the economic results of an entity’s risk management activities. In addition, the new guidance makes certain targeted modifications to simplify the application of current hedge accounting guidance. The new guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with early application permitted. The effect of adoption should be reflected as of the beginning of the fiscal year of adoption (that is, the initial application date). All transition requirements and elections should be applied to derivatives positions and hedging relationships existing on the date of adoption.  Management currently is evaluating the impact that adoption of this guidance will have on the Company’s consolidated financial statements.
In March 2017, the FASB issued guidance that requires certain premiums on callable debt securities to be amortized to the earliest call date and is intended to better align interest income recognition with the manner in which market participants price these instruments.  The new guidance is effective for interim and annual periods beginning after December 15, 2018 with early adoption permitted and is to be applied on a modified retrospective basis. Management currently is evaluating the impact that adoption of this guidance will have on the Company’s consolidated financial statements.
In June 2016, the FASB issued new guidance related to the accounting for credit losses on financial instruments. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The new guidance is effective for interim and annual periods beginning after December 15, 2019 with early adoption permitted for annual periods beginning after December 15, 2018. Management currently is evaluating the impact that adoption of this guidance will have on the Company’s consolidated financial statements.
In February 2016, the FASB issued revised guidance to lease accounting that will require lessees to recognize on the balance sheet a “right-of-use” asset and a lease liability for virtually all lease arrangements, including those embedded in other contracts. The new lease accounting model will continue to distinguish between capital and operating leases. The current straight-line pattern for the recognition of rent expense on an operating lease is expected to remain substantially unchangedtransactions are conducted by the new guidance but instead will be comprisedCompany under a standardized securities industry master agreement, amended to suit
the requirements of amortizationeach respective counterparty. Transfers of the right-of-use asset and interest cost on the related lease obligation, thereby resulting in an income statement presentation similarsecurities under these agreements to a financing arrangement or capital lease. Lessor accounting will remain substantially unchanged from the current model but has been updated to align with certain changes made to the lessee model. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The transition provisions require application on a modified retrospective approach at the beginning of the earliest comparative period presented in the financial statements (that is, January 1, 2017).  Extensive quantitative and qualitative disclosures, including significant judgments maderepurchase
are evaluated by management, will be required to provide greater insight into the extent of revenue and expense recognized and expected to be recognized from existing lease contracts and arrangements. Management currently is evaluating the impact that adoption of this guidance will have on the Company’s consolidated financial statements.
Revenue Recognition
Investment Management and Service Fees and Related Expenses
Reported as Investment management and service fees in the Company’s consolidated statements of income (loss) are investment advisory and service fees, distribution revenues, and institutional research services revenues principally emerging from the Investment Management and Research segment. Also included are investment management and administrative service fees earned by AXA Equitable Funds Management Group, LLC (“AXA Equitable FMG”) and


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

reported in the Retirement and Protection segments as well as certain asset-based fees associated with insurance contracts.
Investment management, advisory, and service fees
AB provides asset management services by managing customer assets and seeking to deliver returns to investors. Similarly, AXA Equitable FMG provides investment management and administrative services, such as fund accounting and compliance services, to AXA Premier VIP Trust (“VIP Trust”), EQ Advisors Trust (“EQAT”) and 1290 Funds as well as two private investment trusts established in the Cayman Islands, AXA Allocation Funds Trust and AXA Offshore Multimanager Funds Trust (collectively, the “Other AXA Trusts”). The contracts supporting these revenue streams create a distinct, separately identifiable performance obligation for each day the assets are managed for the performance of a series of services that are substantially the same and have the same pattern of transfer to the customer. Accordingly, these investment management, advisory, and administrative service base fees are recorded over time as services are performed and entitle the Company to variable consideration. Base fees, generally calculateddetermine whether they satisfy the criteria for accounting treatment as a percentage of assets under management (“AUM”), are recognized as revenue at month-end whensecured
borrowing arrangements. Agreements not meeting the transaction price no longer is variable and the valuecriteria would require recognition of the consideration is determined. These fees are not subject to claw back and there is minimal probability that a significant reversaltransferred
securities as sales with related forward repurchase commitments. All of the revenue recorded will occur.
Certain investment advisory contracts of AB, including those associated with hedge funds or other alternative investments, provideCompany���s securities repurchase transactions are accounted for a performance-based fee (including carried interest), in addition to a base advisory fee, calculated either as a percentage of absolute investment results or a percentage of investment results in excess of a stated benchmark over a specified period of time. These performance-based fees are forms of variable consideration and, therefore, are excluded from the transaction price until it becomes probable there will not be significant reversal of the cumulative revenue recognized. At each reporting date, the Company evaluates constraining factors surrounding the variable consideration to determine the extent to which, if any, revenues associatedsecured borrowings with the performance-based fee can be recognized. Constraining factors impacting the amount of variable consideration included in the transaction price include contractual claw-back provisions, the length of time of the uncertainty, the number and range of possible amounts, the probability of significant fluctuations in fund’s market value, and the level in which the fund’s value exceeds the contractual threshold required to earn such a fee and the materiality of the amount being evaluated. Prior to adoption of the new revenue recognition guidance on January 1, 2018, the Company recognized performance-based fees at the end of the applicable measurement period when no risk of reversal remained, and carried-interest distributions received as deferred revenues until no risk of reversal remained.
Sub-advisory and sub-administrative expenses associated with these services are calculated and recorded as the related services are performed in Other operating costs and expenseobligations distinctly captioned in the consolidated statements of income (loss) as the Company is acting in a principal capacity in these transactions and, as such, reflects these revenues and expensesbalance sheets on a gross basis.
Research services
Research services revenue principally consists As of brokerage transaction charges received by Sanford C. Bernstein & Co. LLC (“SCB LLC”)September 30, 2022 and Sanford C. Bernstein Limited (“SCBL”) for providing equity research services to institutional clients. Brokerage commissions for trade execution services and related expenses are recorded on a trade-date basis when the performance obligations are satisfied. Generally, the transaction price is agreed upon at the point of each trade and based upon the number of shares traded or the value of the consideration traded. Research revenues are recognized when the transaction price is quantified, collectability is assured, and significant reversal of such revenue is not probable.
Distribution services
Revenues from distribution services include fees received as partial reimbursement of expenses incurred in connection with the sale of certain AB sponsored mutual funds and the 1290 Funds and for the distribution primarily of EQAT and VIP Trust shares to separate accounts in connection with the sale of variable life and annuity contracts. The amount


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

and timing of revenues recognized from performance of these distribution services often is dependent upon the contractual arrangements with the customer and the specific product sold as further described below.
Most open-end management investment companies, such as U.S. funds and the EQAT and VIP Trusts and the 1290 Funds, have adopted a plan under Rule 12b-1 of the Investment Company Act that allows for certain share classes to pay out of assets, distribution and service fees for the distribution and sale of its shares (“12b-1 Fees”). These open-end management investment companies have such agreements withDecember 31, 2021, the Company andhad no Securities sold under agreements to repurchase outstanding. During the Company has selling and distributionyear ended December 31, 2021 there was no activity on Securities sold under agreements pursuant to which it pays sales commissions to the financial intermediaries that distribute the shares. These agreements may be terminated by either party upon notice (generally 30 days) and do not obligate the financial intermediary to sell any specific amount of shares.repurchase.
The Company records 12b-1 fees monthly based upon a percentage of the net asset value (“NAV”) of the funds. At month-end, the variable consideration of the transaction price is no longer constrained as the NAV can be calculated and the value of consideration is determined. These services are separate and distinct from other asset management services as the customer can benefit from these services independently of other services. The Company accrues the corresponding 12b-1 fees paid to sub-distributors monthly as the expenses are incurred. The Company is acting in a principal capacity in these transactions; as such, these revenues and expenses are recorded on a gross basis in the consolidated statements of income (loss).
AB sponsored mutual funds offer back-end load shares in limited instances and charge the investor a contingent deferred sales charge (“CDSC”) if the investment is redeemed within a certain period. The variable consideration for these contracts is contingent upon the timing of the redemption by the investor and the value of the sales proceeds. Due to these constraining factors, the Company excludes the CDSC fee from the transaction price until the investor redeems the investment. Upon redemption, the cash consideration received for these contractual arrangements is recorded as a reduction of unamortized deferred sales commissions.
AB’s Luxembourg subsidiary, the management company for most of its non-U.S. funds, earns a management fee which is accrued daily and paid monthly, at an annual rate, based on the average daily net assets of the fund. With respect to certain share classes, the management fee also may contain a component paid to distributors and other financial intermediaries and service providers to cover shareholder servicing and other administrative expenses (also referred to as an “All-in-Fee”). Based on the conclusion that asset management is distinct from distribution, the Company allocates a portion of the investment and advisory fee to distribution revenues for the servicing component based on standalone selling prices.
Other revenues
Also reported as Investment management and service fees in the Company’s consolidated statements of income (loss) are other revenues from contracts with customers, primarily consisting of shareholder servicing fees, mutual fund reimbursements, and other brokerage income.
Shareholder services, including transfer agency, administration, and record-keeping are provided by AB to company-sponsored mutual funds. The consideration for these services is based on a percentage of the NAV of the fund or a fixed-fee based on the number of shareholder accounts being serviced. The revenues are recorded at month-end when the constraining factors involved with determining NAV or the numbers of shareholders’ accounts are resolved.
Other income
Revenues from contracts with customers reported as Other income in the Company’s consolidated statements of income (loss) primarily consist of advisory account fees and brokerage commissions from the Company’s subsidiary broker-dealer operations and sales commissions from the Company’s general agent for the distribution of non-affiliate insurers’ life insurance and annuity products. These revenues are recognized at month-end when constraining factors, such as AUM and product mix, are resolved and the transaction pricing no longer is variable such that the value of consideration can be determined.


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Contract assets and liabilities
The Company applies the practical expedient for contracts that have an original duration of one year or less. Accordingly, the Company accrues the incremental costs of obtaining a contract when incurred and does not consider the time value of money. At March 31, 2018, there are no material balances of contract assets and contract liabilities; as such, no further disclosures are necessary.
Accounting and Consolidation of VIEs
A VIE must be consolidatedFor all new investment products and entities developed by its primary beneficiary, which generallythe Company, the Company first determines whether the entity is defined as the party that has a controlling financial interest in the VIE. The Company is deemed to have a controlling financial interest in a VIE, if it has (i)which involves determining an entity’s variability and variable interests, identifying the power to direct the activitiesholders of the VIE that most significantly affectequity investment at risk and assessing the VIE’s economic performance, and (ii) the obligation to absorb lossesfive characteristics of the VIE or the right to receive income from the VIE that potentially could be significant to thea VIE. For purposes of evaluating (ii) above, fees paid to the Company as a decision maker or service provider are excluded if the fees are compensation for services provided commensurate with the level of effort required to be performed and the arrangement includes only customary terms, conditions or amounts present in arrangements for similar services negotiated at arm’s length.
If the Company has a variable interest inOnce an entity that ishas been determined not to be a VIE, the entityCompany then determines whether it is evaluated for consolidation under the voting interest entity (“VOE”) model. For limited partnerships and similar entities,primary beneficiary of the VIE based on its beneficial interests. If the Company is deemed to have a controllingbe the primary beneficiary of the VIE, then the Company consolidates the entity.
Management of the Company reviews quarterly its investment management agreements and its investments in, and other financial interest in a VOE, and would bearrangements with, certain entities that hold client AUM to determine the entities that the Company is required to consolidate the entity, if the Company owns a majority of the entity’s kick-out rights through votingunder this guidance. These entities include certain mutual fund products, hedge funds, structured products, group trusts, collective investment trusts and limited partnership interests and other limited partners do not hold substantive participating rights (or other rights that would indicate that the Company does not control the entity). For entities other than limited partnerships, the Company is deemed to have a controlling financial interest in a VOE if it owns a majority voting interest in the entity.partnerships.
The analysis performed to identify variable interests held, determine whether entities are VIEs or VOEs, and evaluate whether the Company has a controlling financial interest in such entities requires the exercise of judgment and is updated on a continuous basis as circumstances change or new entities are developed. The primary beneficiary evaluation generally is performed qualitatively based on all facts and circumstances, including consideration of economic interests in the VIE held directly and indirectly through related parties and entities under common control, as well as quantitatively, as appropriate.
At MarchConsolidated VIEs
Consolidated CLOs
The Company is the investment manager of certain asset-backed investment vehicles, commonly referred to as CLOs, and certain other vehicles for which the Company earns fee income for investment management services. The Company may sell or syndicate investments through these vehicles, principally as part of the strategic investing activity as part of its investment management businesses. Additionally, the Company may invest in securities issued by these vehicles which are eliminated in consolidation of the CLOs.
As of September 30, 2022 and December 31, 2018,2021, respectively, Equitable Financial holds $93 million and $109 million of equity interests in the CLOs. The Company consolidated the CLOs as of September 30, 2022 and December 31, 2021 as it is the primary beneficiary due to the combination of both its equity interest held by Equitable Financial and the majority ownership of AB, which functions as the CLOs loan manager. The assets of the CLOs are legally isolated from the Company’s creditors and can only be used to settle obligations of the CLOs. The liabilities of the CLOs are non-recourse to the Company and the Company has no obligation to satisfy the liabilities of the CLOs. As of September 30, 2022, Equitable Financial holds $67 million of equity interests in a SPE established to purchase loans from the market in anticipation of a new CLO transaction. The Company consolidated the SPE as of September 30, 2022 as it is the primary beneficiary due to the combination of both its equity interest held by Equitable Financial and the majority ownership of AB, which functions as the SPE loan manager.
Resulting from this consolidation in the Company’s consolidated balance sheets are fixed maturities, at fair value using the fair value option with total assets of $1.5 billion and $1.6 billion notes issued by consolidated variable interest entities, at fair value using the fair value option with total liabilities of $1.2 billion and $1.2 billion at September 30, 2022 and December 31, 2021, respectively. The unpaid outstanding principal balance of the notes and short-term borrowing is $1.4 billion and $1.3 billion at September 30, 2022 and December 31, 2021.
Consolidated Limited Partnerships and LLCs
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

As of September 30, 2022 and December 31, 2021 the Company consolidated limited partnerships and LLCs for which it was identified as the primary beneficiary under the VIE model. Included in Other invested assets, Mortgage loans on real estate, Other equity investments, Trading securities, cash and other liabilities in the Company’s consolidated balance sheets at September 30, 2022 and December 31, 2021 are total net assets of $562 million and $219 million, respectively related to these VIEs.
Consolidated AB-Sponsored Investment Funds
Included in the Company’s consolidated balance sheet as of September 30, 2022 and December 31, 2021 are assets of $477 million and $734 million, liabilities of $26 million and $87 million, and redeemable noncontrolling interests of $310 million and $421 million, respectively, associated with the consolidation of AB-sponsored investment funds under the VIE model. Also included in the Company’s consolidated balance sheets as of September 30, 2022 and December 31, 2021 are assets of $28 million and $0 million, liabilities of $2 million and $0 million, and redeemable noncontrolling interests of $2 million and $0 million, respectively, from consolidation of AB-sponsored investment funds under the VOE model. The assets of these consolidated funds are presented within other invested assets and cash and cash equivalents, and liabilities of these consolidated funds are presented with other liabilities in the Company’s consolidated balance sheets; ownership interests not held by the Company relating to consolidated VIEs and VOEs are presented either as redeemable or non-redeemable noncontrolling interests, as appropriate. Redeemable noncontrolling interests are presented in mezzanine equity and non-redeemable noncontrolling interests are presented within permanent equity. The Company is not required to provide financial support to these AB-sponsored investment funds, and only the assets of such funds are available to settle each fund’s own liabilities.
Non-Consolidated VIEs
As of September 30, 2022 and December 31, 2021 respectively, the Company held approximately $1,137 million$2.3 billion and $2.1 billion of investment assets in the form of equity interests issued by non-corporate legal entities determined under the new guidance to be VIEs, such as limited partnerships and limited liability companies, including CLOs, hedge funds, private equity funds and real estate-related funds. As an equity investor, the Company is considered to have a variable interest in each of these VIEs as a result of its participation in the risks and/or rewards these funds were designed to create by their defined portfolio objectives and strategies. Primarily through qualitative assessment, including consideration of related party interests or other financial arrangements, if any, the Company was not identified as primary beneficiary of any of these VIEs, largely due to its inability to direct the activities that most significantly impact their economic performance. Consequently, the Company continues to reflect these equity interests in the consolidated balance sheetsheets as Otherother equity investments and to applyapplies the equity method of accounting for these positions. The net assets of these non-consolidated VIEs are approximately $163,434 million,$278.9 billion and the$245.6 billion as of September 30, 2022 and December 31, 2021 respectively. The Company’s maximum exposure to loss from its direct involvement with these VIEs is the carrying value of its investment of $1,137 million at March 31, 2018. Except for$2.3 billion and $2.1 billion and approximately $798 million$1.3 billion and $1.2 billion of unfunded commitments at Marchas of September 30, 2022 and December 31, 2018, the2021, respectively. The Company has no further economic interest in these VIEs in the form of guarantees, derivatives, credit enhancements or similar instruments and obligations.
At March 31, 2018, the Company consolidated one real estate joint venture for which it was identified as primary beneficiary under the VIE model. The consolidated entity is jointly owned by AXA Equitable Life Insurance Company (“AXA Equitable Life”) and AXA France and holds an investment in a real estate venture. Included in the Company’s consolidated balance sheet at March 31, 2018, are total assets of $36 million related to this VIE, primarily resulting from the consolidated presentation of $36 million of real estate held for production of income. In addition, real estate held for production of income reflects $16 million as related to two non-consolidated joint ventures at March 31, 2018.


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Included in the Company’s consolidated balance sheet at March 31, 2018 are assets of $2,447 million, liabilities of $1,219 million and redeemable non-controlling interest of $982 million associated with the consolidation of AB-sponsored investment funds under the VIE model. Also included in the Company’s consolidated balance sheets are assets of $135 million, liabilities of $4 million and redeemable non-controlling interest of $10 million from consolidation of AB-sponsored investment funds under the VOE model. The assets of these consolidated funds are presented within Other invested assets and cash and cash equivalents, and liabilities of these consolidated funds are presented with other liabilities on the face of the Company’s consolidated balance sheet at March 31, 2018; ownership interests not held by the Company relating to consolidated VIEs and VOEs are presented either as redeemable or non-redeemable noncontrolling interest, as appropriate. The Company is not required to provide financial support to these company-sponsored investment funds, and only the assets of such funds are available to settle each fund’s own liabilities.Non-Consolidated AB-Sponsored Investment Products
As of MarchSeptember 30, 2022 and December 31, 2018,2021, the net assets of investment products sponsored by AB that are nonconsolidatednon-consolidated VIEs are approximately $83.9$39.9 billion and the$68.9 billion, respectively. The Company’s maximum exposure to loss from its direct involvement with these VIEs is its investment of $8$5 million at Marchand $9 million as of September 30, 2022 and December 31, 2018.2021. The Company has no further commitments to or economic interest in these VIEs.
Impact
Assumption Updates
The Company conducts its annual review of its assumptions during the third quarter of each year. The annual review encompasses assumptions underlying the valuation of unearned revenue liabilities, embedded derivatives for our insurance business, liabilities for future policyholder benefits, DAC and DSI assets.
However, the Company updates its assumptions as needed in the event it becomes aware of economic conditions or events that could require a change in assumptions that it believes may have a significant impact to the carrying value of product liabilities and assets and consequently materially impact its earnings in the period of the Tax Reform Act
On December 22, 2017, President Trump signed into law the Tax Reform Act, a broad overhaul of the U.S. Internal Revenue Code that changes long-standing provisions governing the taxation of U.S. corporations, including life insurance companies.change.
The Tax Reform Act reducesnet impact of assumption changes in the federal corporatethree and nine months ended September 30, 2022 decreased policy charges and fee income tax rateby $23 million, decreased policyholders’ benefits by $243 million, increased interest credited
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Notes to 21% beginningConsolidated Financial Statements (Unaudited), Continued

to policyholder account balances by $1 million, increased net derivative losses by $80 million and decreased amortization of DAC by $43 million. This resulted in 2018an increase in income (loss) from operations, before income taxes of $182 million and repealsincreased net income (loss) by $144 million.
The net impact of assumption changes in the corporate alternative minimum tax (“AMT”) while keeping existing AMT credits. It also includes changes to the dividends received deduction (“DRD”), insurance reservesthree and taxnine months ended September 30, 2021 decreased policy charges and fee income by $28 million, decreased policyholders’ benefits by $62 million, increased net derivative gains by $200 million and decreased amortization of DAC and measures affecting our international operations, such as a one-time transitional tax on some of the accumulated earnings of our foreign subsidiaries (within our Investment Management and Research segment).
As a result of the Tax Reform Act, our new effective tax rate is expected to be approximately 19%, driven mainly by the new federal corporate tax rate of 21% and the DRD benefit.
We expect the Tax Reform Act to have both positive and negative impacts on our consolidated balance sheet. On the one hand, as a one-time effect, the lower tax rate$58 million. This resulted in a reductiondecrease in income (loss) from operations, before income taxes of $108 million and decreased net income (loss) by $85 million. As part of this annual assumption update the reference interest rate utilized in our GAAP fair value calculations was updated from the LIBOR swap curve to the value of our deferred tax assets. On the other hand, the Tax Reform Act repeals the corporate AMT and, subject to certain limitations, allows us to use our AMT credits going forward, which will result in a reduction of our tax liability.
We expect the tax liability on the earnings of our foreign subsidiaries will decrease going forward. In 2017, we recorded a one-time estimated decrease to net income of $23 millionUS Treasury curve due to the estimated transitional tax on someimpending cessation of the accumulated earningsLIBOR and our GAAP fair value liability risk margins were increased, resulting in little impact to overall valuation as our view regarding market participant pricing of these subsidiaries.our guarantees has not changed at this time.
Overall, we expect the Tax Reform Act to have a net positive economic impact on us. At December 31, 2017, we recorded a provisional estimate of the income tax effects related to Tax Reform. During the period ended March 31, 2018, we have not recorded any changes to this estimate. We continue to evaluate this new and complicated piece of legislation, assess the magnitude of the various impacts and monitor potential regulatory changes related to this reform.
Assumption Updates and Model Changes
There were no assumptionmaterial model changes in the first quartersnine months of 2018 or 2017.2021 and 2022.
Revision

3)    INVESTMENTS
Fixed Maturities AFS
The components of Prior Period Financial Statements
During the first quarter of 2018, management identified an error in its previously issued financial statements related to a misclassification between interest creditedfair value and net derivative gains/losses. The impact of this error toamortized cost for fixed maturities classified as AFS on the consolidated financial statementsbalance sheets excludes accrued interest receivable because the Company elected to present accrued interest receivable within other assets. Accrued interest receivable on AFS fixed maturities as of September 30, 2022 and December 31, 2021 was $604 million and $506 million, respectively. There was no accrued interest written off for AFS fixed maturities for the six months ended June 30, 2017,three and nine months ended September 30, 20172022 and 2021.
The following tables provide information relating to the years ended December 31, 2017 and 2016 was not considered to be material. In order to improve the consistency andCompany’s fixed maturities classified as AFS.

AFS Fixed Maturities by Classification
 Amortized CostAllowance for Credit LossesGross Unrealized GainsGross Unrealized LossesFair Value
  (in millions)
September 30, 2022
Fixed Maturities:
Corporate (1)$52,643 $22 $69 $8,144 $44,546 
U.S. Treasury, government and agency7,241 — 4 1,215 6,030 
States and political subdivisions668 — 8 92 584 
Foreign governments1,114 — 2 190 926 
Residential mortgage-backed (2)500 — 1 25 476 
Asset-backed (3)9,289 — 1 545 8,745 
Commercial mortgage-backed3,824 — — 574 3,250 
Redeemable preferred stock41 — 2 — 43 
Total at September 30, 2022$75,320 $22 $87 $10,785 $64,600 
December 31, 2021:
Fixed Maturities:
Corporate (1)$50,172 $22 $2,601 $240 $52,511 
U.S. Treasury, government and agency13,056 — 2,344 15 15,385 
States and political subdivisions586 — 78 2 662 
Foreign governments1,124 — 42 14 1,152 
Residential mortgage-backed (2)90 — 8 — 98 
Asset-backed (3)5,933 — 21 20 5,934 
Commercial mortgage-backed2,427 — 19 25 2,421 

16
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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

comparability of the financial statements, management revised the consolidated statements of income (loss) and statements of cash flows to include the revisions discussed herein. See Note 17 to the Notes to Consolidated Financial Statements for details of the revisions.(Unaudited), Continued

3)    INVESTMENTS
 Amortized CostAllowance for Credit LossesGross Unrealized GainsGross Unrealized LossesFair Value
  (in millions)
Redeemable preferred stock41 — 12 — 53 
Total at December 31, 2021$73,429 $22 $5,125 $316 $78,216 
Fixed Maturities______________
The following table provides information relating to(1)Corporate fixed maturities include both public and private issues.
(2)Includes publicly traded agency pass-through securities classified as AFS:and collateralized obligations.
Available-for-Sale Securities(3)Includes credit-tranched securities collateralized by Classification 
 Amortized
Cost		 Gross Unrealized
Gains		 Gross Unrealized
Losses		 Fair
Value		 
OTTI
in AOCI (3)
 (in millions)
March 31, 2018:         
Fixed Maturity Securities:         
Public corporate$18,513
 $501
 $298
 $18,716
 $—
Private corporate7,394
 117
 107
 7,404
 —
U.S. Treasury, government and agency14,772
 387
 506
 14,653
 —
States and political subdivisions422
 56
 1
 477
 —
Foreign governments405
 23
 9
 419
 —
Residential mortgage-backed(1)
614
 16
 3
 627
 —
Asset-backed(2)
675
 4
 4
 675
 2
Redeemable preferred stock473
 44
 4
 513
 —
Total at March 31, 2018$43,268
 $1,148
 $932
 $43,484
 $2


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

As a result of the adoption of the Recognitionsub-prime mortgages, credit risk transfer securities and Measurement of Financial Assets and Financial Liabilities standard on January 1, 2018 (Financial Instruments Recognition and Measurement Standard), equity securities are no longer classified and accounted for as available for sale securities.
 Amortized
Cost		 Gross Unrealized
Gains		 Gross Unrealized
Losses		 Fair
Value		 
OTTI
in AOCI (3)
 (in millions)
December 31, 2017:         
Fixed Maturity Securities:         
Public corporate$17,181
 $806
 $33
 $17,954
 $—
Private corporate7,299
 225
 32
 7,492
 —
U.S. Treasury, government and agency17,759
 1,000
 251
 18,508
 —
States and political subdivisions422
 67
 —
 489
 —
Foreign governments395
 29
 5
 419
 —
Residential mortgage-backed(1)
797
 22
 1
 818
 —
Asset-backed(2)
745
 5
 1
 749
 2
Redeemable preferred stock470
 43
 1
 512
 —
Total Fixed Maturities45,068
 2,197
 324
 46,941
 2
Equity securities188
 2
 —
 190
 —
Total at December 31, 2017$45,256
 $2,199
 $324
 $47,131
 $2
(1)Includes publicly traded agency pass-through securities and collateralized obligations.
(2)Includes credit-tranched securities collateralized by sub-prime mortgages and other asset types and credit tenant loans.
(3)Amounts represent OTTI losses in AOCI, which were not included in income (loss) in accordance with current accounting guidance.

other asset types.
The contractual maturities of AFS fixed maturities at March 31, 2018as of September 30, 2022 are shown in the table below. Bonds not due at a single maturity date have been included in the table in the final year of maturity. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Available-for-SaleContractual Maturities of AFS Fixed Maturities
Contractual Maturities at March 31, 2018 
 Amortized Cost (Less Allowance for Credit Losses)Fair Value
 (in millions)
September 30, 2022
Contractual maturities:
Due in one year or less$1,419 $1,397 
Due in years two through five14,893 14,033 
Due in years six through ten18,743 16,531 
Due after ten years26,589 20,125 
Subtotal61,644 52,086 
Residential mortgage-backed500 476 
Asset-backed9,289 8,745 
Commercial mortgage-backed3,824 3,250 
Redeemable preferred stock41 43 
Total at September 30, 2022$75,298 $64,600 
 
Amortized
Cost
 Fair Value
 (in millions)
Due in one year or less$2,499
 $2,517
Due in years two through five8,727
 8,862
Due in years six through ten13,290
 13,114
Due after ten years16,990
 17,176
Subtotal41,506
 41,669
Residential mortgage-backed securities614
 627
Asset-backed securities675
 675
Redeemable preferred stock473
 513
Total$43,268
 $43,484


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)



The following table shows proceeds from sales, gross gains (losses) from sales and OTTIallowance for credit losses for AFS fixed maturities duringfor the three and nine months ended March 31, 2018September 30, 2022 and 2017: 2021:
Proceeds from Sales, Gross Gains (Losses) from Sales and Allowance for Credit and Intent to Sell Losses for AFS Fixed Maturities
 Three Months Ended March 31,
 2018 2017
 (in millions)
Proceeds from sales$3,880
 $440
Gross gains on sales$155
 $25
Gross losses on sales$(52) $(23)
Total OTTI$—
 $—
Non-credit losses recognized in OCI—
 —
Credit losses recognized in net income (loss)$—
 $—


 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
 (in millions)
Proceeds from sales$905 $3,701 $11,640 $20,776 
Gross gains on sales$— $171 $44 $1,019 
Gross losses on sales$(62)$(8)$(653)$(162)
Net change in Allowance for Credit and Intent to Sell losses$(243)$(2)$(246)$(14)

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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


The following table sets forth the amount of credit loss impairments on AFS fixed maturity securitiesmaturities held by the Company at the dates indicated and the corresponding changes in such amounts:amounts.

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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

AFS Fixed Maturities - Credit and Intent to Sell Loss Impairments

 Three Months Ended March 31,
 2018 2017
 (in millions)
Balances, beginning of period$(18) $(239)
Previously recognized impairments on securities that matured, paid, prepaid or sold—
 55
Recognized impairments on securities impaired to fair value this period(1)
—
 —
Impairments recognized this period on securities not previously impaired—
 —
Additional impairments this period on securities previously impaired—
 —
Increases due to passage of time on previously recorded credit losses—
 —
Accretion of previously recognized impairments due to increases in expected cash flows—
 —
Balances at March 31,$(18) $(184)
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Balance, beginning of period$32 $42 $44 $32 
Previously recognized impairments on securities that matured, paid, prepaid or sold(2)(1)(17)(4)
Recognized impairments on securities impaired to fair value this period (1) (2)246 — 246 — 
Credit losses recognized this period on securities for which credit losses were not previously recognized(1)— — 8 
Additional credit losses this period on securities previously impaired5 1 7 6 
Increases due to passage of time on previously recorded credit losses— — — — 
Accretion of previously recognized impairments due to increases in expected cash flows (for OTTI securities 2019 and prior)— — — — 
Balance at September 30,$280 $42 $280 $42 
(1)
______________
(1)Represents circumstances where the Company determined in the current period that it intends to sell the security or it is more likely than not that it will be required to sell the security before recovery of the security’s amortized cost.

Net unrealized investment gains (losses) on fixed maturities and equity securities classified as AFS are included in the consolidated balance sheets as a component of AOCI. The table below presents these amounts as of the dates indicated:
 March 31,
2018		 December 31, 2017
 (in millions)
AFS Securities:   
Fixed maturities:   
With OTTI loss$—
 $2
All other216
 1,871
Equity securities—
 2
Net Unrealized Gains (Losses)$216
 $1,875
As a result of the adoption of the Recognition and Measurement of Financial Assets and Financial Liabilities standard on January 1, 2018 (Financial Instruments Recognition and Measurement Standard), equity securities are no longer classified and accounted for as available for sale securities.



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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Changes in net unrealized investment gains (losses) recognized in AOCI include reclassification adjustments to reflect amounts realized in Net income (loss) for the current period that had been partit intends to sell the security, or it is more likely than not that it will be required to sell the security before recovery of OCIthe security’s amortized cost.
(2)Amounts reflected as of three and nine months ended September 30, 2022 represent AFS fixed maturities in earlier periods. an unrealized loss position, which the Company intends to sell in anticipation of the EQUI-VEST Transaction. For additional details on the EQUI-VEST Transaction, see Note 16 of the Notes to the Consolidated Financial Statements.

The tables that follow below present a rollforwardroll-forward of net unrealized investment gains (losses) recognized in AOCI, split between amounts relatedAOCI.

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EQUITABLE HOLDINGS, INC.
Notes to fixed maturity securities on which an OTTI loss has been recognized and all other:Consolidated Financial Statements (Unaudited), Continued

Net Unrealized Gains (Losses) on AFS Fixed Maturities with OTTI Losses

Net Unrealized Gains (Losses) on InvestmentsDACPolicyholders’ LiabilitiesDeferred Income Tax Asset (Liability)AOCI Gain (Loss) Related to Net Unrealized Investment Gains (Losses)
(in millions)
Balance, July 1, 2022$(6,965)$1,180 $(333)$1,285 $(4,833)
Net investment gains (losses) arising during the period(4,045)— — — (4,045)
Reclassification adjustment:
Included in net income (loss)311 — — — 311 
Excluded from net income (loss)— — — — — 
Other— — — — — 
Impact of net unrealized investment gains (losses)— 593 3 659 1,255 
Net unrealized investment gains (losses) excluding credit losses(10,699)1,773 (330)1,944 (7,312)
Net unrealized investment gains (losses) with credit losses1 — — — 1 
Balance, September 30, 2022$(10,698)$1,773 $(330)$1,944 $(7,311)
Balance, July 1, 2021$5,361 $(1,165)$(414)$(794)$2,988 
Net investment gains (losses) arising during the period(395)— — — (395)
Reclassification adjustment:
Included in net income (loss)(165)— — — (165)
Other (1)— — — — — 
Impact of net unrealized investment gains (losses)— 377 33 31 441 
Net unrealized investment gains (losses) excluding credit losses4,801 (788)(381)(763)2,869 
Net unrealized investment gains (losses) with credit losses(1)— — — (1)
Balance, Balance, September 30, 2021$4,800 $(788)$(381)$(763)$2,868 

Net Unrealized Gains (Losses) on InvestmentsDACPolicyholders’ LiabilitiesDeferred Income Tax Asset (Liability)AOCI Gain (Loss) Related to Net Unrealized Investment Gains (Losses)
(in millions)
Balance, January 1, 2022$4,809 $(782)$(418)$(757)$2,852 
Net investment gains (losses) arising during the period(16,359)— — — (16,359)
Reclassification adjustment:
Included in net income (loss)859 — — — 859 
Other— — — — — 
Impact of net unrealized investment gains (losses)— 2,554 88 2,699 5,341 
Net unrealized investment gains (losses) excluding credit losses(10,691)1,772 (330)1,942 (7,307)

 Net
Unrealized
Gains
(Losses) on
Investments		 DAC Policyholders’
Liabilities		 Deferred
Income
Tax Asset
(Liability)		 AOCI Gain
(Loss) Related
to Net
Unrealized
Investment
Gains (Losses)
 (in millions)
Balance, January 1, 2018$2
 $—
 $(1) $(7) $(6)
Net investment gains (losses) arising during the period—
 —
 —
 —
 —
Reclassification adjustment for OTTI losses:         
Included in Net income (loss)(2) —
 —
 —
 (2)
Excluded from Net income (loss)(1)
—
 —
 —
 —
 —
Impact of net unrealized investment gains (losses) on:         
DAC—
 —
 —
 —
 —
Deferred income taxes—
 —
 —
 7
 7
Policyholders’ liabilities—
 —
 1
 —
 1
Balance, March 31, 2018$—
 $—
 $—
 $—
 $—
Balance, January 1, 2017$19
 $1
 $(10) $(4) $6
Net investment gains (losses) arising during the period63
 —
 —
 —
 63
Reclassification adjustment for OTTI losses:         
Included in Net income (loss)(65) —
 —
 —
 (65)
Excluded from Net income (loss)(1)
—
 —
 —
 —
 —
Impact of net unrealized investment gains (losses) on:         
DAC—
 (4) —
 —
 (4)
Deferred income taxes—
 —
 —
 —
 —
Policyholders’ liabilities—
 —
 6
 —
 6
Balance, March 31, 2017$17
 $(3) $(4) $(4) $6
19
(1)Represents “transfers in” related to the portion of OTTI losses recognized during the period that were not recognized in income (loss) for securities with no prior OTTI loss.



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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNotes to Consolidated Financial Statements (Unaudited), Continued
(UNAUDITED)

Net unrealized investment gains (losses) with credit losses(7)1 — 2 (4)
Balance, September 30, 2022$(10,698)$1,773 $(330)$1,944 $(7,311)
Balance, January 1, 2021$8,811 $(1,548)$(1,065)$(1,302)$4,896 
Net investment gains (losses) arising during the period(3,231)— — — (3,231)
Reclassification adjustment:
Included in net income (loss)(747)— — — (747)
Other (1)(33)— — — (33)
Impact of net unrealized investment gains (losses)— 761 685 539 1,985 
Net unrealized investment gains (losses) excluding credit losses4,800 (787)(380)(763)2,870 
Net unrealized investment gains (losses) with credit losses— (1)(1)— (2)
Balance, September 30, 2021$4,800 $(788)$(381)$(763)$2,868 
All Other Net Unrealized Investment Gains (Losses) In AOCI_____________
(1) Effective January 1, 2021, certain preferred stock have been reclassified to other equity investments.
 Net
Unrealized
Gains
(Losses) on
Investments		 DAC Policyholders’
Liabilities		 Deferred
Income
Tax Asset
(Liability)		 AOCI Gain
(Loss) Related
to Net
Unrealized
Investment
Gains (Losses)
 (in millions)
Balance, January 1, 2018$1,871
 $(358) $(238) $(383) $892
Net investment gains (losses) arising during the period(109) —
 —
 —
 (109)
Reclassification adjustment for OTTI losses:
 
 
 
  
Included in Net income (loss)(1,546) —
 —
 —
 (1,546)
Excluded from Net income (loss)(1)
—
 —
 —
 —
 —
Impact of net unrealized investment gains (losses) on:
 
 
 
  
DAC—
 341
 —
 —
 341
Deferred income taxes—
 —
 —
 239
 239
Policyholders’ liabilities—
 —
 110
 —
 110
Balance, March 31, 2018$216

$(17)
$(128)
$(144)
$(73)
Balance, January 1, 2017$528
 $(45) $(192) $(95) $196
Net investment gains (losses) arising during the period176
 —
 —
 —
 176
Reclassification adjustment for OTTI losses:
 
 
 
  
Included in Net income (loss)29
 —
 —
 —
 29
Excluded from Net income (loss)(1)


 —
 —
 —
 —
Impact of net unrealized investment gains (losses) on:
 
 
 
  
DAC—
 (68) —
 —
 (68)
Deferred income taxes—
 —
 —
 (60) (60)
Policyholders’ liabilities—
 —
 14
 —
 14
Balance, March 31, 2017$733
 $(113) $(178) $(155) $287
(1)Represents “transfers out” related to the portion of OTTI losses during the period that were not recognized in income (loss) for securities with no prior OTTI loss.



24
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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


The following tables disclose the fair values and gross unrealized losses of the 1,4115,220 issues at March 31, 2018as of September 30, 2022 and the 7522,060 issues atas of December 31, 2017 of fixed maturities2021 that are not deemed to be other-than-temporarily impaired,have credit losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position for the specified periods at the dates indicated:indicated.
AFS Fixed Maturities in an Unrealized Loss Position for Which No Allowance Is Recorded
Less Than 12 Months12 Months or LongerTotal
Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
(in millions)
September 30, 2022
Fixed Maturities:
Corporate$33,987 $6,565 $6,312 $1,577 $40,299 $8,142 
U.S. Treasury, government and agency5,536 1,196 201 19 5,737 1,215 
States and political subdivisions339 84 14 8 353 92 
Foreign governments605 138 167 52 772 190 
Residential mortgage-backed438 25 1 — 439 25 
Asset-backed8,072 503 440 42 8,512 545 
Commercial mortgage-backed2,435 382 813 192 3,248 574 
Total at September 30, 2022$51,412 $8,893 $7,948 $1,890 $59,360 $10,783 
December 31, 2021:
Fixed Maturities:
Corporate$10,571 $163 $1,633 $75 $12,204 $238 
U.S. Treasury, government and agency993 11 105 4 1,098 15 
States and political subdivisions120 2 11 — 131 2 
Foreign governments349 6 92 8 441 14 
Residential mortgage-backed— — — — — — 
Asset-backed3,865 20 38 — 3,903 20 
Commercial mortgage-backed1,527 21 96 4 1,623 25 
Total at December 31, 2021$17,425 $223 $1,975 $91 $19,400 $314 


20
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

 Less Than 12 Months 12 Months or Longer Total
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 (in millions)
March 31, 2018:           
Fixed Maturity Securities:           
Public corporate$8,539
 $263
 $605
 $35
 $9,144
 $298
Private corporate2,457
 63
 660
 44
 3,117
 107
U.S. Treasury, government and agency3,129
 81
 4,325
 425
 7,454
 506
States and political subdivisions19
 1
 —
 —
 19
 1
Foreign governments57
 2
 70
 7
 127
 9
Residential mortgage-backed145
 2
 76
 1
 221
 3
Asset-backed81
 4
 1
 —
 82
 4
Redeemable preferred stock116
 2
 12
 2
 128
 4
Total$14,543
 $418

$5,749

$514

$20,292

$932
December 31, 2017:           
Fixed Maturity Securities:           
Public corporate$2,123
 $15
 $690
 $18
 $2,813
 $33
Private corporate780
 8
 641
 24
 1,421
 32
U.S. Treasury, government and agency2,718
 6
 4,506
 245
 7,224
 251
States and political subdivisions20
 —
 —
 —
 20
 —
Foreign governments11
 —
 73
 5
 84
 5
Residential mortgage-backed62
 —
 76
 1
 138
 1
Asset-backed15
 1
 12
 —
 27
 1
Redeemable preferred stock10
 —
 13
 1
 23
 1
Total$5,739
 $30
 $6,011
 $294
 $11,750
 $324

The Company’s investments in fixed maturity securitiesmaturities do not include concentrations of credit risk of any single issuer greater than 10% of the consolidated equity of the Company, other than securities of the U.S. government, U.S. government agencies, and certain securities guaranteed by the U.S. government. The Company maintains a diversified portfolio of corporate securities across industries and issuers and does not have exposure to any single issuer in excess of 0.5%0.6% of total investments.corporate securities. The largest exposures to a single issuer of corporate securities held at March 31, 2018as of September 30, 2022 and December 31, 20172021 were $219$275 million and $207$322 million, respectively. respectively, representing 5.7% and 2.5% of the consolidated equity of the Company.
Corporate high yield securities, consisting primarily of public high yield bonds, are classified as other than investment grade by the various rating agencies, i.e., a rating below Baa3/BBB- or the National Association of Insurance Commissioners (“NAIC”)NAIC designation of 3 (medium investment grade), 4 or 5 (below investment grade) or 6 (in or near default). At March 31, 2018As of September 30, 2022 and December 31, 2017,2021, respectively, approximately $1,335 million$2.9 billion and $1,372 million,$2.9 billion, or 3.1%3.9% and 3.0%3.9%, of the $43,268 million$75.3 billion and $45,068 million$73.4 billion aggregate amortized cost of fixed maturities held by the Company were considered to be other than investment grade. These securities had netgross unrealized losses of $14$242 million and $5$18 million at March 31, 2018as of September 30, 2022 and December 31, 2017,2021, respectively. At March 31, 2018
As of September 30, 2022 and December 31, 2017,2021, respectively, the $514$1,890 million and $294$91 million of gross


25
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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

unrealized losses of twelve months or more were primarily concentrated in corporate and U.S. Treasury, government and agency securities. In accordance with the policy described in Note 2 of the Notes to these Consolidated Financial Statements, the Company concluded that an adjustment to incomeallowance for OTTIcredit losses for these securities was not warranted at either MarchSeptember 30, 2022 or December 31, 2018 or 2017. At March 31, 20182021. As of September 30, 2022 and December 31, 2017,2021, the Company did not intend to sell the securities nor will it likely be required to dispose of the securities before the anticipated recovery of their remaining amortized cost basis.
The Company does not originate, purchase or warehouse residential mortgagesBased on the Company’s evaluation both qualitatively and is notquantitatively of the drivers of the decline in the mortgage servicing business. At March 31, 2018, the carryingfair value of fixed maturitiesmaturity securities as of September 30, 2022, the Company determined that were non-income producing for the twelve months preceding that dateunrealized loss was $3 million.primarily due to increases in interest rates, credit spreads and changes in credit ratings.
For the three months ended March 31, 2018Mortgage Loans on Real Estate
Accrued interest receivable on commercial and 2017, investment income is shown netagricultural mortgage loans as of investment expenses of $19 million and $19 million respectively.
At March 31, 2018September 30, 2022 and December 31, 2017, respectively, the fair values of the Company’s trading account securities were $14,9192021 was $63 million and $14,170$57 million, respectively. Also at March 31, 2018 and December 31, 2017, trading securities included the General Account’s investment in Separate Accounts, which had carrying values of $49 million and $50 million, respectively.
Net unrealized and realized gains (losses) on trading account equity securities are included in Net investment income (loss) in the Consolidated Statements of Income (Loss). The table below shows a breakdown of Net investment income from trading account securities during the three months ended March 31, 2018 and 2017:
Net Investment Income (Loss) from Trading Securities 
 Three Months Ended March 31,
 2018 2017
 (in millions)
Net investment gains (losses) recognized during the period on securities held at the end of the period$(121) $87
Net investment gains (losses) recognized on securities sold during the period1
 4
Unrealized and realized gains (losses) on trading securities arising during the period(120) 91
Interest and dividend income from trading securities76
 63
Net investment income (loss) from trading securities$(44) $154
Mortgage Loans
The payment terms of mortgage loans may from time to time be restructured or modified.
Mortgage loans on real estate are placed on nonaccrual status once management determines the collection ofThere was no accrued interest is doubtful. Once mortgage loans on real estate are classified as nonaccrual loans, interest income is recognized under the cash basis of accounting and the resumption of the interest accrual would commence only after all past due interest has been collected or the mortgage loan on real estate has been restructured to where the collection of interest is considered likely. At March 31, 2018 and December 31, 2017, the carrying values of commercial mortgage loans on real estate that had been classified as nonaccrual loans were $19 million and $19 million, respectively.


26
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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Valuation Allowances for Mortgage Loans:
Allowance for credit losses for mortgage loans for the first quarters of 2018 and 2017 are as follows:
 Three Months Ended March 31,
 2018 2017
 (in millions)
Allowance for credit losses: 
Beginning balance, January 1,$8
 $8
Charge-offs—
 —
Recoveries(1) —
Provision—
 —
Ending balance, March 31,$7
 $8
    
March 31, Individually Evaluated for Impairment$7
 $8
There were no allowances for credit losses for agricultural mortgage loans for the first quarters of 2018 and 2017.
Real Estate:
In March 2018, the Company sold its interest in two consolidated real estate joint ventures to AXA France for a total purchase price of approximately $143 million, which resulted in a pre-tax loss of $0.2 million and the reduction of $203 million of long-term debt on the Company’s balance sheet for the first quarter of 2018.
The following tables provide information relating to the loan-to-value and debt service coverage ratioswritten off for commercial and agricultural mortgage loans at March 31, 2018for the nine months ended September 30, 2022 and 2021.
As of September 30, 2022, the Company had no loans for which foreclosure was probable included within the individually assessed mortgage loans, and accordingly had no associated allowance for credit losses.
Allowance for Credit Losses on Mortgage Loans
The change in the allowance for credit losses for commercial mortgage loans and agricultural mortgage loans during the nine months ended September 30, 2022 and 2021 were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Allowance for credit losses on mortgage loans:
Commercial mortgages:
Balance, beginning of period$58 $59 $57 $77 
Current-period provision for expected credit losses19 1 20 (17)
Write-offs charged against the allowance— — — — 
Recoveries of amounts previously written off— — — — 
Net change in allowance19 1 20 (17)
Balance, end of period$77 $60 $77 $60 

21
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Agricultural mortgages:
Balance, beginning of period$6 $4 $5 $4 
Current-period provision for expected credit losses— — 1 — 
Write-offs charged against the allowance— — — — 
Recoveries of amounts previously written off— — — — 
Net change in allowance— — 1 — 
Balance, end of period$6 $4 $6 $4 
Total allowance for credit losses$83 $64 $83 $64 

The change in the allowance for credit losses is attributable to:
•increases/decreases in the loan balance due to new originations, maturing mortgages, and loan amortization; and
•changes in credit quality.
Credit Quality Information
The following tables summarize the Company’s mortgage loans segregated by risk rating exposure as of September 30, 2022 and December 31, 2017. 2021.

Loan to Value (“LTV”) Ratios (1)
September 30, 2022
Amortized Cost Basis by Origination Year
20222021202020192018PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to Term Loans Amortized Cost BasisTotal
(in millions)
Mortgage loans:
Commercial:
0% - 50%$488 $130 $— $— $119 $1,469 $— $— $2,206 
50% - 70%1,780 1,857 1,255 275 733 2,597 273 — 8,770 
70% - 90%136 124 115 368 315 898 — 33 1,989 
90% plus— — — — 35 174 — — 209 
Total commercial$2,404 $2,111 $1,370 $643 $1,202 $5,138 $273 $33 $13,174 
Agricultural:
0% - 50%$121 $190 $214 $123 $135 $754 $— $— $1,537 
50% - 70%182 179 238 86 82 277 — — 1,044 
70% - 90%1 — — — — 15 — — 16 
90% plus— — — — — — — — — 
Total agricultural$304 $369 $452 $209 $217 $1,046 $— $— $2,597 
Total mortgage loans:

22
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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

September 30, 2022
Amortized Cost Basis by Origination Year
20222021202020192018PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to Term Loans Amortized Cost BasisTotal
(in millions)
0% - 50%$609 $320 $214 $123 $254 $2,223 $— $— $3,743 
50% - 70%1,962 2,036 1,493 361 815 2,874 273 — 9,814 
70% - 90%137 124 115 368 315 913 — 33 2,005 
90% plus— — — — 35 174 — — 209 
Total mortgage loans$2,708 $2,480 $1,822 $852 $1,419 $6,184 $273 $33 $15,771 


Debt Service Coverage Ratios (“DSC”) (2)
September 30, 2022
Amortized Cost Basis by Origination Year
20222021202020192018PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to Term Loans Amortized Cost BasisTotal
(in millions)
Mortgage loans:
Commercial:
Greater than 2.0x$605 $1,143 $1,078 $103 $571 $1,863 $— $— $5,363 
1.8x to 2.0x135 187 165 216 186 421 161 — 1,471 
1.5x to 1.8x413 274 32 177 250 1,173 75 — 2,394 
1.2x to 1.5x614 259 60 92 47 1,376 — — 2,448 
1.0x to 1.2x222 248 35 55 148 234 37 33 1,012 
Less than 1.0x415 — — — — 71 — — 486 
Total commercial$2,404 $2,111 $1,370 $643 $1,202 $5,138 $273 $33 $13,174 
Agricultural:
Greater than 2.0x$48 $40 $62 $22 $12 $195 $— $— $379 
1.8x to 2.0x17 58 35 24 14 63 — — 211 
1.5x to 1.8x48 42 112 28 19 202 — — 451 
1.2x to 1.5x89 154 174 99 100 313 — — 929 
1.0x to 1.2x86 74 65 30 66 260 — — 581 
Less than 1.0x16 1 4 6 6 13 — — 46 
Total agricultural$304 $369 $452 $209 $217 $1,046 $— $— $2,597 
Total mortgage loans:
Greater than 2.0x$653 $1,183 $1,140 $125 $583 $2,058 $— $— $5,742 
1.8x to 2.0x152 245 200 240 200 484 161 — 1,682 
1.5x to 1.8x461 316 144 205 269 1,375 75 — 2,845 
1.2x to 1.5x703 413 234 191 147 1,689 — — 3,377 
1.0x to 1.2x308 322 100 85 214 494 37 33 1,593 

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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

Less than 1.0x431 1 4 6 6 84 — — 532 
Total mortgage loans$2,708 $2,480 $1,822 $852 $1,419 $6,184 $273 $33 $15,771 
______________
(1)The values used in theseLTV ratio calculations were developed as partis derived from current loan balance divided by the fair value of the periodic review of the commercial and agricultural mortgage loan portfolio, which includes an evaluationproperty. The fair value of the underlying collateral value.commercial properties is updated annually for each mortgage loan.

(2)The DSC ratio is calculated using the most recently reported operating income results from property operations divided by annual debt service.
LTV Ratios (1)
December 31, 2021
Amortized Cost Basis by Origination Year
20212020201920182017PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to Term Loans Amortized Cost BasisTotal
(in millions)
Mortgage loans:
Commercial:
0% - 50%$— $— $— $184 $293 $1,009 $— $— $1,486 
50% - 70%1,944 1,286 339 619 491 2,533 139 — 7,351 
70% - 90%190 236 412 415 276 972 — — 2,501 
90% plus— — — 35 5 73 — — 113 
Total commercial$2,134 $1,522 $751 $1,253 $1,065 $4,587 $139 $— $11,451 
Agricultural:
0% - 50%$180 $212 $128 $129 $119 $738 $— $— $1,506 
50% - 70%200 268 102 126 87 338 — — 1,121 
70% - 90%— — — — — 17 — — 17 
90% plus— — — — — — — — — 
Total agricultural$380 $480 $230 $255 $206 $1,093 $— $— $2,644 
Total mortgage loans:
0% - 50%$180 $212 $128 $313 $412 $1,747 $— $— $2,992 
50% - 70%2,144 1,554 441 745 578 2,871 139 — 8,472 
70% - 90%190 236 412 415 276 989 — — 2,518 
90% plus— — — 35 5 73 — — 113 
Total mortgage loans$2,514 $2,002 $981 $1,508 $1,271 $5,680 $139 $— $14,095 

DSC Ratios (2)
December 31, 2021
Amortized Cost Basis by Origination Year
20212020201920182017PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to Term Loans Amortized Cost BasisTotal
(in millions)
Mortgage loans:
Commercial:


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNotes to Consolidated Financial Statements (Unaudited), Continued
(UNAUDITED)

Greater than 2.0x$1,143 $1,243 $210 $772 $485 $2,235 $— $— $6,088 
1.8x to 2.0x185 135 182 46 161 372 68 — 1,149 
1.5x to 1.8x275 49 284 211 166 919 48 — 1,952 
1.2x to 1.5x264 95 75 101 253 701 — — 1,489 
1.0x to 1.2x267 — — 88 — 287 23 — 665 
Less than 1.0x— — — 35 — 73 — — 108 
Total commercial$2,134 $1,522 $751 $1,253 $1,065 $4,587 $139 $— $11,451 
Agricultural:
Greater than 2.0x$49 $64 $25 $22 $24 $210 $— $— $394 
1.8x to 2.0x52 37 25 14 14 70 — — 212 
1.5x to 1.8x43 113 28 22 41 193 — — 440 
1.2x to 1.5x161 179 112 116 72 355 — — 995 
1.0x to 1.2x75 83 31 77 54 226 — — 546 
Less than 1.0x— 4 9 4 1 39 — — 57 
Total agricultural$380 $480 $230 $255 $206 $1,093 $— $— $2,644 
Total mortgage loans:
Greater than 2.0x$1,192 $1,307 $235 $794 $509 $2,445 $— $— $6,482 
1.8x to 2.0x237 172 207 60 175 442 68 — 1,361 
1.5x to 1.8x318 162 312 233 207 1,112 48 — 2,392 
1.2x to 1.5x425 274 187 217 325 1,056 — — 2,484 
1.0x to 1.2x342 83 31 165 54 513 23 — 1,211 
Less than 1.0x— 4 9 39 1 112 — — 165 
Total mortgage loans$2,514 $2,002 $981 $1,508 $1,271 $5,680 $139 $— $14,095 
______________
(1)The LTV ratio is derived from current loan balance divided by the fair value of the property. The fair value of the underlying commercial properties is updated annually for each mortgage loan.
(2)The DSC ratio is calculated using the most recently reported operating income results from property operations divided by annual debt service.
Past-Due and Nonaccrual Mortgage Loans by Loan-to-Value and Debt Service Coverage Ratios
March 31, 2018
 
Debt Service Coverage Ratio(1)
  
Loan-to-Value Ratio:(2)
Greater than 2.0x 1.8x to 2.0x 1.5x to 1.8x 1.2x to 1.5x 1.0x to 1.2x Less than 1.0x 
Total Mortgage
Loans
 (in millions)
Commercial Mortgage Loans(1)
             
0% - 50%$737
 $21
 $321
 $73
 $—
 $—
 $1,152
50% - 70%4,477
 643
 1,122
 399
 178
 —
 6,819
70% - 90%169
 110
 144
 307
 27
 —
 757
90% plus—
 —
 27
 —
 —
 —
 27
Total Commercial Mortgage Loans$5,383
 $774
 $1,614
 $779
 $205
 $—
 $8,755
Agricultural Mortgage Loans(1)
             
0% - 50%$275
 $153
 $276
 $496
 $321
 $29
 $1,550
50% - 70%111
 46
 219
 360
 228
 48
 1,012
70% - 90%—
 —
 —
 23
 —
 —
 23
90% plus—
 —
 —
 —
 —
 —
 —
Total Agricultural Mortgage Loans$386
 $199
 $495
 $879
 $549
 $77
 $2,585
Total Mortgage Loans(1)
             
0% - 50%$1,012
 $174
 $597
 $569
 $321
 $29
 $2,702
50% - 70%4,588
 689
 1,341
 759
 406
 48
 7,831
70% - 90%169
 110
 144
 330
 27
 —
 780
90% plus—
 —
 27
 —
 —
 —
 27
Total Mortgage Loans$5,769
 $973
 $2,109
 $1,658
 $754
 $77
 $11,340
(1)The debt service coverage ratio is calculated using the most recently reported operating income results from property operations divided by annual debt service.
(2)The loan-to-value ratio is derived from current loan balance divided by the fair market value of the property. The fair market value of the underlying commercial properties is updated annually.



28
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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Mortgage Loans by Loan-to-Value and Debt Service Coverage Ratios
December 31, 2017
 
Debt Service Coverage Ratio(1)
  
Loan-to-Value Ratio:(2)
Greater than 2.0x 1.8x to 2.0x 1.5x to 1.8x 1.2x to1.5x 1.0x to 1.2x Less than 1.0x Total Mortgage Loans
 (in millions)
Commercial Mortgage Loans(1)
             
0% - 50%$759
 $—
 $320
 $74
 $—
 $—
 $1,153
50% - 70%4,088
 682
 1,066
 428
 145
 —
 6,409
70% - 90%169
 110
 196
 272
 50
 —
 797
90% plus—
 —
 27
 —
 —
 —
 27
Total Commercial Mortgage Loans$5,016
 $792
 $1,609
 $774
 $195
 $—
 $8,386
Agricultural Mortgage Loans(1)
             
0% - 50%$272
 $149
 $275
 $515
 $316
 $30
 $1,557
50% - 70%111
 46
 227
 359
 221
 49
 1,013
70% - 90%—
 —
 —
 4
 —
 —
 4
90% plus—
 —
 —
 —
 —
 —
 —
Total Agricultural Mortgage Loans$383
 $195
 $502
 $878
 $537
 $79
 $2,574
Total Mortgage Loans(1)
             
0% - 50%$1,031
 $149
 $595
 $589
 $316
 $30
 $2,710
50% - 70%4,199
 728
 1,293
 787
 366
 49
 7,422
70% - 90%169
 110
 196
 276
 50
 —
 801
90% plus—
 —
 27
 —
 —
 —
 27
Total Mortgage Loans$5,399
 $987
 $2,111
 $1,652
 $732
 $79
 $10,960
(1)The debt service coverage ratio is calculated using the most recently reported operating income results from property operations divided by annual debt service.
(2)The loan-to-value ratio is derived from current loan balance divided by the fair market value of the property. The fair market value of the underlying commercial properties is updated annually.


29
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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Loan Status
The following table provides information relating to the aging analysis of past duepast-due mortgage loans at March 31, 2018as of September 30, 2022 and December 31, 2017,2021, respectively.
Age Analysis of Past Due Mortgage LoanLoans (1)
Accruing LoansNon-accruing LoansTotal LoansNon-accruing Loans with No AllowanceInterest Income on Non-accruing Loans
Past DueCurrentTotal
30-59 Days60-89 Days90 Days or MoreTotal
(in millions)
September 30, 2022:
Mortgage loans:
Commercial$— $— $— $— $13,174 $13,174 $— $13,174 $— $— 
Agricultural12 7 19 38 2,543 2,581 16 2,597 — — 
Total$12 $7 $19 $38 $15,717 $15,755 $16 $15,771 $— $— 

 
30-59
    Days    
 
60-89
    Days    
 
90
    Days    
or >
 Total     Current     
Total
Financing
Receivables
 
Recorded
Investment 90 Days or >
and
Accruing
       (in millions)    
March 31, 2018             
Commercial$—
 $—
 $27
 $27
 $8,728
 $8,755
 $—
Agricultural10
 5
 39
 54
 2,531
 2,585
 39
Total Mortgage Loans$10
 $5
 $66
 $81
 $11,259
 $11,340
 $39
December 31, 2017             
Commercial$27
 $—
 $—
 $27
 $8,359
 $8,386
 $—
Agricultural49
 3
 22
 74
 2,500
 2,574
 22
Total Mortgage Loans$76
 $3
 $22
 $101
 $10,859
 $10,960
 $22
25



30
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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNotes to Consolidated Financial Statements (Unaudited), Continued
(UNAUDITED)

December 31, 2021:
Mortgage loans:
Commercial$— $— $— $— $11,451 $11,451 $— $11,451 $— $— 
Agricultural1 1 25 27 2,601 2,628 16 2,644 — — 
Total$1 $1 $25 $27 $14,052 $14,079 $16 $14,095 $— $— 
The following table provides information relating to impaired mortgage loans_______________
(1)Amounts presented at March 31, 2018amortized cost basis.
As of September 30, 2022 and December 31, 2017,2021, the carrying values of problem mortgage loans that had been classified as non-accrual loans were $13 million and $14 million, respectively.
Impaired Mortgage LoansTroubled Debt Restructuring
During the three and nine months ended September 30, 2022 and 2021, the Company identified an immaterial amount of TDRs.
Equity Securities
The table below presents a breakdown of unrealized and realized gains and (losses) on equity securities during the three and nine months ended September 30, 2022 and 2021.
Unrealized and Realized Gains (Losses) from Equity Securities
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Net investment gains (losses) recognized during the period on securities held at the end of the period$(33)$(48)$(143)$(8)
Net investment gains (losses) recognized on securities sold during the period— 43 (11)47 
Unrealized and realized gains (losses) on equity securities$(33)$(5)$(154)$39 
Trading Securities
As of September 30, 2022 and December 31, 2021, respectively, the fair value of the Company’s trading securities was $631 million and $631 million. As of September 30, 2022 and December 31, 2021, respectively, trading securities included the General Account’s investment in Separate Accounts had carrying values of $34 million and $45 million.
The table below shows a breakdown of net investment income (loss) from trading securities during the three and nine months ended September 30, 2022 and 2021.
Net Investment Income (Loss) from Trading Securities
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Net investment gains (losses) recognized during the period on securities held at the end of the period$(44)$(57)$(246)$(303)
Net investment gains (losses) recognized on securities sold during the period— 42 6 255 
Unrealized and realized gains (losses) on trading securities(44)(15)(240)(48)
Interest and dividend income from trading securities2 4 20 85 
Net investment income (loss) from trading securities$(42)$(11)$(220)$37 
Fixed maturities, at fair value using the fair value option
The table below shows a breakdown of net investment income (loss) from fixed maturities, at fair value using the fair value option during the three and nine months ended September 30, 2022 and 2021.

26

 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment(1)
 
Interest
Income
Recognized
 (in millions)
March 31, 2018:         
With no related allowance recorded:         
Commercial mortgage loans - other$—
 $—
 $—
 $—
 $—
Agricultural mortgage loans—
 —
 —
 —
 —
Total$—
 $—
 $—
 $—
 $—
With related allowance recorded:         
Commercial mortgage loans - other$27
 $27
 $(7) $27
 $—
Agricultural mortgage loans—
 —
 —
 —
 —
Total$27
 $27
 $(7) $27
 $—
December 31, 2017:         
With no related allowance recorded:         
Commercial mortgage loans - other$—
 $—
 $—
 $—
 $—
Agricultural mortgage loans—
 —
 —
 —
 —
Total$—
 $—
 $—
 $—
 $—
With related allowance recorded:         
Commercial mortgage loans - other$27
 $27
 $(8) $27
 $2
Agricultural mortgage loans—
 —
 —
 —
 —
Total$27
 $27
 $(8) $27
 $2
(1)Represents a two-quarter average of recorded amortized cost.


Derivatives and Offsetting Assets and LiabilitiesNet Investment Income (Loss) from Fixed Maturities, at Fair Value using the Fair Value Option
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Net investment gains (losses) recognized during the period on securities held at the end of the period$(7)$9 $(20)$7 
Net investment gains (losses) recognized on securities sold during the period(1)1 5 3 
Unrealized and realized gains (losses) from fixed maturities(8)10 (15)10 
Interest and dividend income from fixed maturities1 12 — 22 
Net investment income (loss) from fixed maturities$(7)$22 $(15)$32 

4)     DERIVATIVES
The Company uses derivatives as part of its overall asset/liability risk management primarily to reduce exposures to equity market and interest rate risks. Derivative hedging strategies are designed to reduce these risks from an economic perspective and are all executed within the framework of a Derivative“Derivative Use Plan (“DUP”)Plan” approved by applicable states’ insurance law. Derivatives are generally not accounted for using hedge accounting, with the exception of Treasury Inflation-Protected Securities (“TIPS”),TIPS and cash flow hedges, which isare discussed further below. Operation of these hedging programs is based on models involving numerous estimates and assumptions, including, among others, mortality, lapse, surrender and withdrawal rates, election rates, fund performance, market volatility and interest rates. A wide range of derivative contracts are used in these hedging programs, including exchange traded equity, currency and interest rate futures contracts, total return and/or other equity swaps, interest rate swap and floor contracts, bond and bond-index total return swaps, swaptions, variance swaps and equity options, credit and foreign exchange derivatives, as well as bond and repo transactions to support the hedging. The derivative contracts are collectively managed in an effort to reduce the economic impact of unfavorable changes in guaranteed benefits’ exposures attributable to movements in capital markets. In addition, as part of ourits hedging strategy, the Company holds static hedge positions to maintain a targettargets an asset level for all variable annuity products at or above a CTE98 level under most economic scenarios (CTE is a statistical measure of tail risk which quantifies the total asset requirement to sustain a loss if an event outside a given probability level has


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

occurred. CTE 98CTE98 denotes the financial resources a company would need to cover the average of the worst 2% of scenarios).scenarios.)
Derivatives utilizedUtilized to hedge exposureHedge Exposure to Variable Annuities with Guarantee Features
The Company has issued and continues to offer variable annuity products with variable annuity guaranteed benefits (“GMxB”), including guaranteed minimum living benefits (“GMLBs”) (such as guaranteed minimum income benefits (“GMIBs”), guaranteed minimum withdrawal benefits (“GMWBs”) and guaranteed minimum accumulation benefits (“GMABs”), and guaranteed minimum death benefits (“GMDBs”) (inclusive of return of premium death benefit guarantees).GMxB features. The risk associated with the GMDB feature is that under-performance of the financial markets could result in GMDB benefits, in the event of death, being higher than what accumulated policyholders’ account balances would support. The risk associated with the GMIB feature is that under-performance of the financial markets could result in the present value of GMIB, in the event of annuitization, being higher than what accumulated policyholders’ account balances would support, taking into account the relationship between current annuity purchase rates and the GMIB guaranteed annuity purchase rates. The risk associated with products that have a GMxB derivative features liability is that under-performance of the financial markets could result in the GMxB derivative features’ benefits being higher than what accumulated policyholders’ account balances would support.
For GMxB features, the Company retains certain risks including basis, credit spread and some volatility risk and risk associated with actual experience versus expected actuarial assumptions for mortality, lapse and surrender, withdrawal and policyholder election rates, among other things. The derivative contracts are managed to correlate with changes in the value of the GMxB features that result from financial markets movements. A portion of exposure to realized equity volatility is hedged using equity options and variance swaps and a portion of exposure to credit risk is hedged using total return swaps on fixed income indices. Additionally, the Company is party to total return swaps for which the reference U.S. Treasury securities are contemporaneously purchased from the market and sold to the swap counterparty. As these transactions result in a transfer of control of the U.S. Treasury securities to the swap counterparty, the Company derecognizes these securities with consequent gain or loss from the sale. The Company has also purchased reinsurance contracts to mitigate the risks associated with GMDB features and the impact of potential market fluctuations on future policyholder elections of GMIB features contained in certain annuity contracts issued by the Company. The reinsurance of the GMIB features is accounted for as a derivative. In addition, on June 1, 2021, we

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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

ceded legacy variable annuity policies sold by Equitable Financial between 2006-2008 (the “Block”), comprised of non-New York “Accumulator” policies containing fixed rate GMIB and/or GMDB guarantees to CS Life. As this contract provides full risk transfer and thus has the same risk attributes as the underlying direct contracts, the benefits of this treaty are accounted for in the same manner as the underlying gross reserves and therefore the Amounts Due from Reinsurers related to the GMIB with NLG are accounted for as an embedded derivative.
The Company has implemented staticin place an economic hedge positionsprogram using U.S. Treasury futures to maintain a target asset level for allpartially protect the overall profitability of future variable annuities at a CTE98 level under most scenarios, and at a CTE95 level in extreme scenarios. This program was implemented beginning in December 2017.annuity sales against declining interest rates.
Derivatives usedUtilized to hedge crediting rate exposureHedge Crediting Rate Exposure on SCS, SIO, MSO and IUL products/investment optionsProducts/Investment Options
The Company hedges crediting rates in the Structured Capital Strategies (“SCS”)SCS variable annuity, Structured Investment OptionSIO in the EQUI-VEST variable annuity series, (“SIO”), Market Stabilizer Option (“MSO”)MSO in the variable life insurance products and Indexed Universal Life (“IUL”)IUL insurance products. These products permit the contract owner to participate in the performance of an index, ETF or commodity price movement up to a cap for a set period of time. They also contain a protection feature, in which the Company will absorb, up to a certain percentage, the loss of value in an index, ETF or commodity price, which varies by product segment.
In order to support the returns associated with these features, the Company enters into derivative contracts whose payouts, in combination with fixed income investments, emulate those of the index, ETF or commodity price, subject to caps and buffers, without any basis risk due to market exposures, thereby substantially reducing any exposure to market-related earnings volatility.
Derivatives usedUsed to Hedge Equity Market Risks Associated with the General Account’s Seed Money Investments in Retail Mutual Funds
The Company’s General Account seed money investments in retail mutual funds expose us to market risk, including equity market risk which is partially hedged through equity-index futures contracts to minimize such risk.
Derivatives Used for General Account Investment Portfolio
The Company maintains a strategy in its General Account investment portfolio to replicate the credit exposure of fixed maturity securities otherwise permissible for investment under its investment guidelines through the sale of credit default swaps (“CDSs”).CDS. Under the terms of these swaps, the Company receives quarterly fixed premiums that, together with any initial amount paid or received at trade inception, replicate the credit spread otherwise currently obtainable


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

by purchasing the referenced entity’s bonds of similar maturity. These credit derivatives generally have remaining terms of five years or less and are recorded at fair value with changes in fair value, including the yield component that emerges from initial amounts paid or received, reported in Net investment income (loss)net derivative gains (losses).
The Company manages its credit exposure taking into consideration both cash and derivatives based positions and selects the reference entities in its replicated credit exposures in a manner consistent with its selection of fixed maturities. In addition, the Company generally transacts the sale of CDSsCDS in single name reference entities of investment grade credit quality and with counterparties subject to collateral posting requirements. If there is an event of default by the reference entity or other such credit event as defined under the terms of the swap contract, the Company is obligated to perform under the credit derivative and, at the counterparty’sits option, either pay the referenced amount of the contract less an auction-determined recovery amount or pay the referenced amount of the contract and receive in return the defaulted or similar security of the reference entity for recovery by sale at the contract settlement auction. The Company purchased CDS to mitigate its exposure to a reference entity through cash positions. These positions do not replicate credit spreads.
To date, there have been no events of default or circumstances indicative of a deterioration in the credit quality of the named referenced entities to require or suggest that the Company will have to perform under these CDSs.the CDS that it sold. The maximum potential amount of future payments the Company could be required to make under thesethe credit derivatives sold is limited to the par value of the referenced securities which is the dollar or euro-equivalent of the derivativederivative’s notional amount. The Standard North American CDS Contract (“SNAC”) or Standard European Corporate Contract (“STEC”) under which the Company executes these CDS sales transactions does not contain recourse provisions for recovery of amounts paid under the credit derivative.
The Company purchased 30-year TIPS and other sovereign bonds, both inflation linked and non-inflation linked, as General Account investments and enters into asset or cross-currency basis swaps, to result in payment of the given bond’s coupons and principal at maturity in the bond’s specified currency to the swap counterparty in return for fixed dollar amounts. These swaps, when considered in combination with the bonds, together result in a net position that is

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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

intended to replicate a dollar-denominated fixed-coupon cash bond with a yield higher than a term-equivalent U.S. Treasury bond. At March 31, 2018 and December 31, 2017, the Company’s unrealized gains (losses) related
Derivatives Utilized to this program were $(88) million and $(86) million, respectively, and reported in AOCI.Hedge Exposure to Foreign Currency Denominated Cash Flows
The Company implemented a strategy to hedge a portion ofpurchases private placement debt securities and issues funding agreements in the credit exposureFABN program in currencies other than its General Account investment portfolio by buying protection through a swap. These arefunctional U.S. dollar currency. The Company enters into cross currency swaps on the “super senior tranche” of the investment grade CDX index. Under the terms of these swaps, the Company pays quarterly fixed premiums that, together with any initial amount paid or received at trade inception, serve as premiums paidexternal counterparties to hedge the risk arisingexposure of the foreign currency denominated cash flows of these instruments. The foreign currency received from multiple defaults of bonds referencedor paid to the cross currency swap counterparty is exchanged for fixed U.S. dollar amounts with improved net investment yields or net product costs over equivalent U.S. dollar denominated instruments issued at that time. The transactions are accounted for as cash flow hedges when they are designated in hedging relationships and qualify for hedge accounting. The first cross currency swap hedges were designated and applied hedge accounting during the CDX index. quarter ended June 30, 2021.
These credit derivatives have terms of five years or lesscross currency swaps are for the period the foreign currency denominated private placement debt securities and funding agreement are recorded at fair valueoutstanding, with changesthe longest cross currency swap expiring in fair value, including the yield component that emerges from initial amounts paid or received, reported2033. Since designation and qualification as cash flow hedges, cross currency swap interest accruals are recognized in Net derivative gains (losses).
In 2016, the Company implemented a programinvestment income and in Interest credited to mitigate its duration gap using total return swaps for which the reference U.S. Treasury securities are sold to the swap counterparty under arrangements economically similar to repurchase agreements. As these transactions result in a transfer of control of the U.S. Treasury securities to the swap counterparty, the Company derecognizes these securities with consequent gain or loss from the sale. Under this program the Company derecognized approximately $3,905 million U.S. Treasury securities for which the Company received proceeds of approximately $3,906 million at inception of the total return swap contract.  Under the terms of these swaps, the Company retains ongoing exposure to the total returns of the underlying U.S. Treasury securities in exchange for a financing cost. At March 31, 2018, the aggregate fair value of U.S. Treasury securities derecognized under this program was approximately $3,673 million. Reported in Other invested assets in the Company’s balance sheet at March 31, 2018 is approximately $16 million, representing the fair value of the total return swap contracts.
Derivatives used to hedge currency fluctuations on affiliated loans
The Company uses foreign exchange derivatives to reduce exposure to currency fluctuations that may arise from non-U.S.-dollar denominated financial instruments. The Company has currency swap contracts with AXA to hedge foreign exchange exposure from affiliated loans.



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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

policyholders’ account balances.
The tables below present quantitative disclosures about the Company’s derivative instruments designated in hedging relationships and derivative instruments which have not been designated in hedging relationships, including those embedded in other contracts required to be accounted for as derivative instruments.
The following table presents the gross notional amount and estimated fair value of the Company’s derivatives:


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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

Derivative Instruments by Category
September 30, 2022December 31, 2021
  Fair ValueFair Value
  Notional Amount Derivative Assets Derivative LiabilitiesNotional AmountDerivative AssetsDerivative Liabilities
(in millions)
Derivatives: designated for hedge accounting (1)
 Cash flow hedges:
 Currency swaps$1,267 $178 $118 $921 $7 $42 
 Interest swaps955 1 252 955 — 395 
 Total: designated for hedge accounting2,222 179 370 1,876 7 437 
Derivatives: not designated for hedge accounting (1)
Equity contracts:
Futures4,022 8 — 2,640 — 1 
Swaps9,814 28 13 13,378 6 4 
Options36,788 6,209 3,899 48,489 12,024 5,065 
Interest rate contracts:
Futures5,612 — — 12,575 — — 
Swaps1,134 — 134 1,889 — 46 
Swaptions— — — — — — 
Credit contracts:
Credit default swaps315 20 8 774 9 10 
Currency contracts
Currency swaps326 24 — 541 1 — 
Currency forwards60 20 20 79 8 7 
Other freestanding contracts:
Margin— 116 — — 125 — 
Collateral— 140 3,323 — 178 6,160 
Total: not designated for hedge accounting58,071 6,565 7,397 80,365 12,351 11,293 
Embedded derivatives:
Amounts due from reinsurers (5)— 4,312 — — 5,813 — 
GMIB reinsurance contracts (2)— 1,289 — — 1,848 — 
GMxB derivative features liability (3)— — 5,825 — — 8,525 
SCS, SIO, MSO and IUL indexed features (4)— — 2,086 — — 6,773 
Total embedded derivatives— 5,601 7,911 — 7,661 15,298 
Total derivative instruments$60,293 $12,345 $15,678 $82,241 $20,019 $27,028 
___________
(1)Reported in other invested assets in the consolidated balance sheets.
(2)Reported in GMIB reinsurance contract asset in the consolidated balance sheets.
(3)Reported in future policy benefits and other policyholders’ liabilities in the consolidated balance sheets.
(4)Reported in policyholders’ account balances in the consolidated balance sheets.
(5)Represents GMIB NLG ceded related to the Venerable Transaction.


The following table presents the effects of derivative instruments on the consolidated statements of income and comprehensive income (loss).

Derivative Instruments by Category

 At March 31, 2018 
Gains (Losses)
Reported In Net
Income (Loss)
Three Months Ended March 31, 2018

   Fair Value 
 
Notional
Amount
 
Asset
Derivatives
 
Liability
Derivatives
 
 (in millions)
Freestanding derivatives:       
Equity contracts:(1)
       
Futures$6,629
 $2
 $1
 $(23)
Swaps8,017
 255
 16
 114
Options23,013
 3,350
 1,411
 (18)
Interest rate contracts:(1)
       
Swaps29,331
 555
 395
 (671)
Futures24,015
 —
 —
 40
Credit contracts:(1)
       
Credit default swaps2,136
 32
 3
 —
Other freestanding contracts:(1)
       
Foreign currency contracts1,781
 10
 52
 (51)
Margin—
 62
 57
 —
Collateral—
 17
 2,208
 —
Embedded derivatives:       
GMIB reinsurance contracts(6)
—
 1,734
 —
 (159)
GMxB derivative features liability(3,6)
—
 —
 3,977
 460
SCS, SIO, MSO and IUL indexed features(5,6)
—
 —
 1,683
 27
Net derivative investment gains (loss)      (281)
Cross currency swaps (2,4)
—
 —
 —
 9
Total$94,922
 $6,017
 $9,803
 $(272)
30
(1)Reported in Other invested assets in the consolidated balance sheets.
(2)Reported in Other assets or Other liabilities in the consolidated balance sheets.
(3)Reported in Future policy benefits and other policyholders’ liabilities in the consolidated balance sheets.
(4)Reported in Other income in the consolidated statements of income (loss).
(5)SCS and SIO indexed features are reported in Policyholders’ account balances; MSO and IUL indexed features are reported in the Future policyholders’ benefits and other policyholders’ liabilities in the consolidated balance sheets.
(6)Reported in Net derivative gains (losses) in the consolidated statements of income (loss).


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNotes to Consolidated Financial Statements (Unaudited), Continued
(UNAUDITED)


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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

 At December 31, 2017 
Gains (Losses)
Reported In Net
Income (Loss)
Three Months Ended March 31, 2017

   Fair Value 
 
Notional
Amount
 
Asset
Derivatives
 
Liability
Derivatives
 
 (in millions)
Freestanding derivatives:       
Equity contracts:(1)
       
Futures$6,716
 $1
 $2
 $(396)
Swaps7,623
 4
 201
 (405)
Options22,223
 3,456
 1,457
 318
Interest rate contracts:(1)
       
Swaps26,769
 604
 193
 143
Futures20,675
 —
 —
 (19)
Credit contracts:(1)
       
Credit default swaps2,131
 35
 3
 6
Other freestanding contracts:(1)
       
Foreign currency contracts1,423
 19
 10
 (1)
Margin—
 24
 4
 —
Collateral—
 4
 2,123
 —
Embedded derivatives:       
GMIB reinsurance contracts(6)
—
 1,894
 —
 (71)
GMxB derivative features liability(3,6)
—
 —
 4,358
 507
SCS, SIO, MSO and IUL indexed features(5,6)
—
 —
 1,786
 (317)
Net derivative investment gains (loss)      (235)
Cross currency swaps(2,4)
354
 5
 —
 (7)
Total$87,914
 $6,046
 $10,137
 $(242)
Three Months Ended September 30, 2022Nine Months Ended September 30, 2022
(in millions)
Net Derivatives Gain(Losses) (1)Net Investment IncomeInterest Credited To Policyholders Account BalancesAOCINet Derivatives Gain(Losses) (1)Net Investment IncomeInterest Credited To Policyholders Account BalancesAOCI
Derivatives: designated for hedge accounting
Cash flow hedges:
Currency swaps$7 $5 $(36)$111 $21 $7 $(46)$116 
Interest swaps(38)— — 94 (79)— — 242 
Total: designated for hedge accounting(31)5 (36)205 (58)7 (46)358 
Derivatives: not Designated for hedge accounting
Equity contracts
Futures31 — — — 486 — — — 
Swaps596 — — — 3,374 — — — 
Options(649)— — — (4,379)— — — 
Interest rate contracts
Futures(428)— — — (1,486)— — — 
Swaps(125)— — — (428)— — — 
Swaptions— — — — — — — — 
Credit contracts
Credit default swaps(1)— — — 13 — — — 
Currency contracts
Currency swaps23 — — — 41 — — — 
Currency forwards2 — — — 5 — — — 
Other freestanding contracts
Margin— — — — — — — — 
Collateral— — — — — — — — 
Total: not designated for hedge accounting(551)— — — (2,374)— — — 
Embedded derivatives
Amounts due from reinsurers(364)— — — (1,506)— — — 
GMIB reinsurance contracts(196)— — — (535)— — — 
GMxB derivative features liability (2)429 — — — 2,943 — — — 
SCS, SIO,MSO and IUL indexed features781 — — — 4,648 — — — 
Total embedded derivatives$650 $— $— $— $5,550 $— $— $— 
Total derivative instruments$68 $5 $(36)$205 $3,118 $7 $(46)$358 
(1)Reported in Other invested assets in the consolidated balance sheets.
(2)Reported in Other assets or Other liabilities in the consolidated balance sheets.
(3)Reported in Future policy benefits and other policyholders’ liabilities in the consolidated balance sheets.
(4)Reported in Other income in the consolidated statements of income (loss).
(5)SCS and SIO indexed features are reported in Policyholders’ account balances; MSO and IUL indexed features are reported in the Future policyholders’ benefits and other policyholders’ liabilities in the consolidated balance sheets.
(6)Reported in Net derivative gains (losses) in the consolidated statements of income (loss).



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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued




Three Months Ended September 30, 2021Nine Months Ended September 30, 2021
(in millions)
Net Derivatives Gain(Losses) (1)Net Investment IncomeInterest Credited To Policyholders Account BalancesAOCINet Derivatives Gain(Losses) (1)Net Investment IncomeInterest Credited To Policyholders Account BalancesAOCI
Derivatives: designated for hedge accounting
Cash flow hedges:
Currency/interest rate
Currency swaps$— $— $(15)$8 $— $— $(32)$8 
Interest swaps$(26)$— $(9)$(54)$— $— $(42)
Total: designated for hedge accounting(26)— (15)(1)(54)— (32)(34)
Derivatives: not designated for hedge accounting
Equity contracts
Futures(2)— — — (451)— — — 
Swaps(3)— — — (2,613)— — — 
Options(169)— — — 2,177 — — — 
Interest rate contracts
Futures(93)— — — (891)— — — 
Swaps67 — — — (2,375)— — — 
Swaptions— — — — — — — — 
Credit contracts
Credit default swaps— — — — — — — — 
Currency contracts
Currency swaps3 — — — 3 — — — 
Currency forwards1 — — — 2 — — — 
Other freestanding contracts
Margin— — — — — — — — 
Collateral— — — — — — — — 
Total: not designated for hedge accounting(196)— — — (4,148)— — — 
Embedded derivatives
Amounts due from reinsurers344 — — — 586 — — — 
GMIB reinsurance contracts(84)— — — (542)— — — 
GMxB derivative features liability (2)(395)— — — 2,340 — — — 
SCS, SIO,MSO and IUL indexed features172 — — — (2,157)— — — 
Total embedded derivatives$37 $— $— $— $227 $— $— $— 
Total derivative instruments$(185)$— $(15)$(1)$(3,975)$— $(32)$(34)
______________
(1)Reported in net derivative gains (losses) in the consolidated statements of income (loss).
(2)Excludes settlement fees of $45 million on CS Life reinsurance contract for the nine months ended September 30, 2021.

33

The following table presents a roll-forward of cash flow hedges recognized in AOCI.
Roll-forward of Cash flow hedges in AOCI

Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Balance, beginning of period$(55)$(158)$(208)$(126)
Amount recorded in AOCI
Currency swaps77 7 77 7 
Interest swaps51 (40)149 (118)
Total amount recorded in AOCI128 (33)226 (111)
Amount reclassified from AOCI to income
Currency swaps34 — 39 — 
Interest swaps43 31 93 77 
Total amount reclassified from AOCI to income77 31 132 77 
Balance, end of period (1)$150 $(160)$150 $(160)
_______________
(1) The Company does not estimate the amount of the deferred losses in AOCI at three and nine months ended September 30, 2022 and 2021 which will be released and reclassified into Net income (loss) over the next 12 months as the amounts cannot be reasonably estimated.
Equity-Based and Treasury Futures Contracts Margin
All outstanding equity-based and treasury futures contracts at Marchas of September 30, 2022 and December 31, 20182021 are exchange-traded and net settled daily in cash. At MarchAs of September 30, 2022 and December 31, 2018,2021, respectively, the Company had open exchange-traded futures positions on: (i) the S&P 500, Nasdaq, Russell 2000 and Emerging Market indices, having initial margin requirements of $250$187 million and $109 million, (ii) the 2-year, 5-year and 10-year U.S. Treasury Notes on U.S. Treasury bonds and ultra-long bonds, having initial margin requirements of $67$63 million and $200 million, and (iii) the Euro Stoxx, FTSE 100, Topix, ASX 200 and European, Australasia, and Far East (“EAFE”)EAFE indices as well as corresponding currency futures on the Euro/U.S. dollar, Pound/U.S. dollar, Australian dollar/U.S. dollar, and Yen/U.S. dollar, having initial margin requirements of $24$14 million and $16 million.

Collateral Arrangements

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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Credit Risk
Although notional amount is the most commonly used measure of volume in the derivatives market, it is not used as a measure of credit risk. A derivative with positive fair value (a derivative asset) indicates existence of credit risk because the counterparty would owe money to the Company if the contract were closed at the reporting date. Alternatively, a derivative contract with negative fair value (a derivative liability) indicates the Company would owe money to the counterparty if the contract were closed at the reporting date. To reduce credit exposures in Over-the-Counter (“OTC”) derivative transactions the Company generally enters into master agreements that provide for a netting of financial exposures with the counterparty and allow for collateral arrangements as further described below under “ISDA Master Agreements.” The Company further controls and minimizes its counterparty exposure through a credit appraisal and approval process.
ISDA Master Agreements
Netting Provisions. The standardized ISDA Master Agreement under which the Company conducts its OTC derivative transactions includes provisions for payment netting. In the normal course of business activities, if there is more than one derivative transaction with a single counterparty, the Company will set-off the cash flows of those derivatives into a single amount to be exchanged in settlement of the resulting net payable or receivable with that counterparty. In the event of default, insolvency, or other similar event pre-defined under the ISDA Master Agreement that would result in termination of OTC derivatives transactions before their maturity, netting procedures would be applied to calculate a single net payable or receivable with the counterparty.
Collateral Arrangements. The Company generally has executed a CSA under the ISDA Master Agreement it maintains with each of its OTC derivative counterparties that requires both posting and accepting collateral either in the form of cash or high-quality securities, such as U.S. Treasury securities, U.S. government and government agency securities and investment grade corporate bonds. These CSAs are bilateral agreements that require collateral postings by the party “out-of-the-money” or in a net derivative liability position. Various thresholds for the amount and timing of collateralization of net liability positions are applicable. Consequently, the credit exposure of the Company’s OTC derivative contracts is limited to the net positive estimated fair value of those contracts at the reporting date after taking into consideration the existence of netting agreements and any collateral received pursuant to CSAs. Derivatives are recognized at fair value in the consolidated balance sheets and are reported either as assets in Other invested assets or as liabilities in Other liabilities, except for embedded insurance-related derivatives as described above and derivatives transacted with a related counterparty. The Company nets the fair value of all derivative financial instruments with counterparties for which an ISDA Master Agreement and related CSA have been executed.
At March 31, 2018 As of September 30, 2022 and December 31, 2017,2021, respectively, the Company held $2,208 million$3.3 billion and $2,123 million$6.2 billion in cash and securities collateral delivered by trade counterparties, representing the fair value of the related derivative agreements. The unrestricted cash collateral is reported in Otherother invested assets. The aggregate fair value of all collateralized derivative transactions that were in a liability position with trade counterparties at March 31, 2018 and December 31, 2017, respectively, were $2 million and $2 million, for which the Company posted collateral of $7$140 million and $4$178 million at March 31, 2018as of September 30, 2022 and December 31, 2017,2021, respectively, in the normal operation of its collateral arrangements. Certain of the Company’s ISDA Master Agreements contain contingent provisions that permit the counterpartyThe Company is exposed to terminate the ISDA Master Agreement if the Company’s credit rating falls below a specified threshold, however, the occurrence of such credit event would not impose additional collateral requirements.
Margin
Effective January 3, 2017, the CME amended its rulebook, resulting in the characterization of variation margin transfers as settlement payments, as opposed to adjustments to collateral. These amendments impacted the accounting treatment of the Company’s centrally cleared derivatives for which the CME serves as the central clearing party. As of the effective date, the application of the amended rulebook reduced gross derivative assets by $1 million.


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Securities Repurchase and Reverse Repurchase Transactions
Securities repurchase and reverse repurchase transactions are conducted by the Company under a standardized securities industry master agreement, amended to suit the specificities of each respective counterparty. These agreements generally provide detail as to the nature of the transaction, including provisions for payment netting, establish parameters concerning the ownership and custody of the collateral securities, including the right to substitute collateral during the term of the agreement, and provide for remedieslosses in the event of defaultnon-performance by either party. Amounts due to/counterparties to financial derivative transactions with a positive fair value. The Company manages credit risk by: (i) entering into derivative transactions with highly rated major international financial institutions and other creditworthy counterparties governed by master netting agreements, as applicable; (ii) trading through central clearing and OTC parties; (iii) obtaining collateral, such as cash and securities, when appropriate; and (iv) setting limits on single party credit exposures which are subject to periodic management review.
Substantially all of the Company’s derivative agreements have zero thresholds which require daily full collateralization by the party in a liability position. In addition, certain of the Company’s derivative agreements contain credit-risk related contingent features; if the credit rating of one of the parties to the derivative agreement is to fall below a certain level, the party with positive fair value could request termination at the then fair value or demand immediate full collateralization from the same counterparty under these arrangements generally would be nettedparty whose credit rating fell and is in the eventa net liability position.

34
Table of default and subjectContents
EQUITABLE HOLDINGS, INC.
Notes to rightsConsolidated Financial Statements (Unaudited), Continued

As of set-off in bankruptcy. The Company’s securities repurchase and reverse repurchase agreements are accounted for as secured borrowing or lending arrangements, respectively and are reported in the consolidated balance sheets on a gross basis. The Company obtains or posts collateral generally in the form of cash and U.S. Treasury, corporate and government agency securities. The fair value of the securities to be repurchased or resold is monitored on a daily basis with additional collateral posted or obtained as necessary. Securities to be repurchased or resold are the same, or substantially the same, as those initially transacted under the arrangement. At March 31, 2018September 30, 2022 and December 31, 2017,2021, there were no net liability derivative positions with counterparties with credit risk-related contingent features whose credit rating has fallen. All derivatives have been appropriately collateralized by the balance outstanding under securities repurchase transactions was $1,904 million and $1,887 million, respectively. The Company utilized these repurchase and reverse repurchase agreements for asset liability and cash management purposes. For other instruments used for asset liability management purposes, see “Obligation under funding agreements” includedor the counterparty in Note 14.accordance with the terms of the derivative agreements.



37
Table of Contents
AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


The following tabletables presents information about the Company’s offsetting of financial assets and liabilities and derivative instruments at Marchas of September 30, 2022 and December 31, 2018.2021:

Offsetting of Financial Assets and Liabilities and Derivative Instruments
At MarchAs of September 30, 2022

Gross Amount RecognizedGross Amount Offset in the Balance SheetsNet Amount Presented in the Balance SheetsGross Amount not Offset in the Balance Sheets (3)Net Amount
(in millions)
Assets:
Derivative assets (1)$6,745 $6,012 $733 $(596)$137 
Other financial assets2,116 — 2,116 — 2,116 
Other invested assets$8,861 $6,012 $2,849 $(596)$2,253 
Liabilities:
Derivative liabilities (2)$7,172 $6,012 $1,160 $— $1,160 
Other financial liabilities4,838 — 4,838 — 4,838 
Other liabilities$12,010 $6,012 $5,998 $— $5,998 
______________
(1)Excludes Investment Management and Research segment’s derivative assets of consolidated VIEs/VOEs.
(2)Excludes Investment Management and Research segment’s derivative liabilities of consolidated VIEs/VOEs.
(3)Financial instruments/Collateral sent (held).


As of December 31, 20182021

Gross Amount RecognizedGross Amount Offset in the Balance SheetsNet Amount Presented in the Balance SheetsGross Amount not Offset in the Balance Sheets (3)Net Amount
(in millions)
Assets:
Derivative assets (1)$12,358 $10,756 $1,602 $(961)$641 
Other financial assets1,989 — 1,989 — 1,989 
Other invested assets$14,347 $10,756 $3,591 $(961)$2,630 
Liabilities:
Derivative liabilities (2)$10,770 $10,756 $14 $— $14 
Other financial liabilities3,919 — 3,919 — 3,919 
Other liabilities$14,689 $10,756 $3,933 $— $3,933 
______________
(1)Excludes Investment Management and Research segment’s derivative assets of consolidated VIEs/VOEs.
(2)Excludes Investment Management and Research segment’s derivative liabilities of consolidated VIEs/VOEs.
(3)Financial instruments sent (held).
5)    CLOSED BLOCK

35
 
Gross
Amounts
Recognized
 
Gross
Amounts
Offset in the
Balance Sheets
 
Net Amounts
Presented in the
Balance Sheets
 (in millions)
ASSETS(1)
     
Description     
Derivatives:     
Equity contracts$3,606
 $1,429
 $2,177
Interest rate contracts555
 395
 160
Credit contracts32
 3
 29
Currency10
 52
 (42)
Collateral17
 2,208
 (2,191)
Margin62
 57
 5
Total Derivatives, subject to an ISDA Master Agreement4,282
 4,144
 138
Other financial instruments3,923
 —
 3,923
Other invested assets$8,205
 $4,144
 $4,061
LIABILITIES(2)
     
Description     
Derivatives:     
Equity contracts$1,429
 $1,429
 $—
Interest rate contracts395
 395
 —
Credit contracts3
 3
 —
Currency52
 52
 —
Collateral2,208
 2,208
 —
Margin57
 57
 —
Total Derivatives, subject to an ISDA Master Agreement4,144
 4,144
 —
Other financial liabilities4,342
 —
 4,342
Other liabilities$8,486
 $4,144
 $4,342
Securities sold under agreement to repurchase(3)
$1,897
 $—
 $1,897
(1)Excludes Investment Management and Research segment’s derivative assets of consolidated VIEs/VOEs.
(2)Excludes Investment Management and Research segment’s derivative liabilities of consolidated VIEs/VOEs.
(3)Excludes expense of $7 million in securities sold under agreement to repurchase.




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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNotes to Consolidated Financial Statements (Unaudited), Continued
(UNAUDITED)

The following table presents information aboutAs a result of demutualization, the Company’s gross collateral amountsClosed Block was established in 1992 for the benefit of certain individual participating policies that were in force on that date. Assets, liabilities and earnings of the Closed Block are specifically identified to support its participating policyholders.
Assets allocated to the Closed Block inure solely to the benefit of the Closed Block policyholders and will not offset inrevert to the consolidated balance sheets at March 31, 2018.
Collateral Amounts Offset inbenefit of the Consolidated Balance Sheets
At March 31, 2018
 Net Amounts
Presented in the
Balance Sheets		 Collateral (Received)/Held  
 
Financial
Instruments
 Cash 
Net
Amounts
 (in millions)
Assets(1)
      
Total derivatives$2,324
 $—
 $(2,186) $138
Other financial instruments3,923
 —
 —
 3,923
Other invested assets$6,247
 $—
 $(2,186) $4,061
Liabilities:(2)
      
Securities sold under agreement to repurchase(3)(4)(5)
$1,897
 $(1,923) $—
 $(26)
(1)Excludes Investment Management and Research segment’s derivativeCompany. No reallocation, transfer, borrowing or lending of assets can be made between the Closed Block and other portions of consolidated VIEs/VOEs.
(2)Excludes Investment Management and Research segment’s derivative liabilities of consolidated VIEs/VOEs.
(3)Excludes expense of $7 million included in Securities sold under agreements to repurchase on the consolidated balance sheet.
(4)US Treasury and agency securities are included in Fixed maturities available for sale on the consolidated balance sheet.
(5)Cash is reported in Cash and cash equivalents on the consolidated balance sheet.

The following table presents information about repurchase agreements accounted for as secured borrowings in the consolidated balance sheets at March 31, 2018.
Repurchase Agreement Accounted for as Secured Borrowings
 At March 31, 2018
 Remaining Contractual Maturity of the Agreements
 
Overnight and
Continuous
 
Up to 30
days
 
30–90
days
 
Greater Than
90 days
 Total
 (in millions)
Securities sold under agreement to repurchase(1)
         
U.S. Treasury and agency securities$—
 $1,897
 $—
 $—
 $1,897
Total$—
 $1,897
 $—
 $—
 $1,897
(1)Excludes expense accrual of $7 million included in Securities sold under agreements to repurchase on the consolidated balance sheet.


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

The following table presents information about the Company’s offsetting financialGeneral Account, any of its Separate Accounts or any affiliate of the Company without the approval of the New York State Department of Financial Services (the “NYDFS”). Closed Block assets and liabilities are carried on the same basis as similar assets and derivative instruments atliabilities held in the General Account. For more information on the Closed Block, see Note 6 to the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2017.2021.
Offsetting of Financial Assets and Liabilities and Derivative Instruments
At December 31, 2017
 
Gross
Amounts
Recognized
 
Gross
Amounts
Offset in the
Balance Sheets
 
Net Amounts
Presented in the
Balance Sheets
 (in millions)
ASSETS(1)
     
Description     
Derivatives:     
Equity contracts$3,461
 $1,660
 $1,801
Interest rate contracts604
 193
 411
Credit contracts35
 3
 32
Currency19
 10
 9
Collateral4
 2,123
 (2,119)
Margin24
 4
 20
Total Derivatives, subject to an ISDA Master Agreement4,147
 3,993
 154
Other financial instruments3,964
 —
 3,964
Other invested assets$8,111
 $3,993
 $4,118
Total Derivatives, not subject to an ISDA Master Agreement(4)
$5
 $—
 $5
LIABILITIES(2)
     
Description     
Derivatives:     
Equity contracts$1,660
 $1,660
 $—
Interest rate contracts193
 193
 —
Credit contracts3
 3
 —
Currency10
 10
 —
Collateral2,123
 2,123
 —
Margin4
 4
 —
Total Derivatives, subject to an ISDA Master Agreement3,993
 3,993
 —
Other financial liabilities4,053
 —
 4,053
Other liabilities$8,046
 $3,993
 $4,053
Securities sold under agreement to repurchase(3)
$1,882
 $—
 $1,882
(1)Excludes Investment Management and Research segment’s derivative assets of consolidated VIEs/VOEs.
(2)Excludes Investment Management and Research segment’s derivative liabilities of consolidated VIEs/VOEs.
(3)Excludes expense of $5 million included in Securities sold under agreements to repurchase on the consolidated balance sheets.
(4)This amount is reflected in Other assets.



40
Table of Contents
AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

The following table presents information about the Company’s gross collateral amounts that are not offset in the consolidated balance sheet at December 31, 2017.
Collateral Amounts Offset in the Consolidated Balance Sheets
At December 31, 2017
 Net Amounts Presented in the Balance Sheets Collateral (Received)/Held  
 
Financial
Instruments
 Cash 
Net
Amounts
 (in millions)
Assets(1)
       
Total Derivatives$2,253
 $—
 $(2,099) $154
Other financial assets3,964
 —
 —
 3,964
Other invested assets$6,217
 $—
 $(2,099) $4,118
Liabilities:(2)
       
Other financial liabilities$4,053
 $—
 $—
 $4,053
Other liabilities$4,053
 $—
 $—
 $4,053
Securities sold under agreement to repurchase(3)(4)(5)
$1,882
 $(1,988) $(21) $(127)
(1)Excludes Investment Management and Research segment’s derivative assets of consolidated VIEs/VOEs.
(2)Excludes Investment Management and Research segment’s derivative liabilities of consolidated VIEs/VOEs.
(3)Excludes expense of $5 million in securities sold under agreement to repurchase.
(4)US Treasury and agency securities are in fixed maturities available for sale on consolidated balance sheet.
(5)Cash is included in cash and cash equivalents on consolidated balance sheet.
The following table presents information about repurchase agreements accounted for as secured borrowings in the consolidated balance sheets at December 31, 2017.
Repurchase Agreement Accounted for as Secured Borrowings
 At December 31, 2017
 Remaining Contractual Maturity of the Agreements
 
Overnight and
Continuous
 
Up to 30
days
 
30–90
days
 
Greater 
Than
90 days
 Total
 (in millions)
Securities sold under agreement to repurchase(1)
         
U.S. Treasury and agency securities$—
 $1,882
 $—
 $—
 $1,882
Total$—
 $1,882
 $—
 $—
 $1,882
(1)Excludes expense of $5 million in securities sold under agreement to repurchase.



41
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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

4)    CLOSED BLOCK
Summarized financial information for the Company’s Closed Block is as follows:
 September 30, 2022December 31, 2021
(in millions)
Closed Block Liabilities:
Future policy benefits, policyholders’ account balances and other$5,750 $5,928 
Policyholder dividend obligation— — 
Other liabilities74 39 
Total Closed Block liabilities5,824 5,967 
Assets Designated to the Closed Block:
Fixed maturities AFS, at fair value (amortized cost of $3,190 and $3,185) (allowance for credit losses of $0 and $0)2,932 3,390 
Mortgage loans on real estate (net of allowance for credit losses of $4 and $4)1,687 1,771 
Policy loans575 602 
Cash and other invested assets— 63 
Other assets154 90 
Total assets designated to the Closed Block5,348 5,916 
Excess of Closed Block liabilities over assets designated to the Closed Block476 51 
Amounts included in AOCI:
Net unrealized investment gains (losses), net of policyholders’ dividend obligation: $0 and $0; and net of income tax: $54 and $(43)(193)172 
Maximum future earnings to be recognized from Closed Block assets and liabilities$283 $223 


36
 March 31,
2018		 December 31,
2017
 (in millions)
CLOSED BLOCK LIABILITIES:   
Future policy benefits, policyholders’ account balances and other$6,904
 $6,958
Policyholder dividend obligation—
 19
Other liabilities269
 271
Total Closed Block liabilities7,173
 7,248
ASSETS DESIGNATED TO THE CLOSED BLOCK:   
Fixed maturities, available for sale, at fair value (amortized cost of $3,864 and $3,923)3,908
 4,070
Mortgage loans on real estate1,837
 1,720
Policy loans772
 781
Cash and other invested assets235
 351
Other assets192
 182
Total assets designated to the Closed Block6,944
 7,104
Excess of Closed Block liabilities over assets designated to the Closed Block229
 144
Amounts included in accumulated other comprehensive income (loss):   
Net unrealized investment gains (losses), net of policyholder dividend obligation of $0 and $1955
 138
Maximum Future Earnings To Be Recognized From Closed Block Assets and Liabilities$284
 $282
Table of Contents
EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

The Company’s Closed Block revenues and expenses were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Revenues:
Premiums and other income$29 $33 $93 $109 
Net investment income (loss)52 59 164 179 
Investment gains (losses), net(1)— (2)2 
Total revenues80 92 255 290 
Benefits and Other Deductions:
Policyholders’ benefits and dividends92 108 248 304 
Other operating costs and expenses— 2 — 3 
Total benefits and other deductions92 110 248 307 
Net income (loss), before income taxes(12)(18)7 (17)
Income tax (expense) benefit(5)(2)(1)(3)
Net income (loss)$(17)$(20)$6 $(20)
  Three Months Ended March 31,
  2018 2017
 (in millions)
REVENUES:    
Premiums and other income $51
 $54
Net investment income (loss) 73
 83
Net investment gains (losses) 1
 (15)
Total revenues 125
 122
BENEFITS AND OTHER DEDUCTIONS:    
Policyholders’ benefits and dividends 126
 151
Other operating costs and expenses 1
 —
Total benefits and other deductions 127
 151
Net revenues (loss) before income taxes (2) (29)
Income tax (expense) benefit —
 10
Net Revenues (Losses) $(2) $(19)



42
Table of Contents
AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

A reconciliation of the Company’s policyholder dividend obligation follows:

Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Beginning balance$— $72 $— $160 
Unrealized investment gains (losses)— (47)— (135)
Ending balance$— $25 $— $25 

 Three Months Ended March 31,
 2018 2017
 (in millions)
Balances, beginning of year$19
 $52
Unrealized investment gains (losses), net of DAC(19) (14)
Balances, End of Period$—
 $38

5)6)    INSURANCE LIABILITIES
A) Variable Annuity Contracts – GMDB, GMIB, GIB and GWBL and Other Features
The Company has certain variable annuity contracts with GMDB, GMIB, GIB and GWBL and other features in-force that guarantee one of the following:
•Return of Premium: the benefit is the greater of current account value or premiums paid (adjusted for withdrawals);
•Ratchet: the benefit is the greatest of current account value, premiums paid (adjusted for withdrawals), or the highest account value on any anniversary up to contractually specified ages (adjusted for withdrawals);
•Roll-Up: the benefit is the greater of current account value or premiums paid (adjusted for withdrawals) accumulated at contractually specified interest rates up to specified ages;
•Combo: the benefit is the greater of the ratchet benefit or the roll-up benefit, which may include either a five year or an annual reset; or
•Withdrawal: the withdrawal is guaranteed up to a maximum amount per year for life.
The following table summarizes the directLiabilities for Variable Annuity Contracts with GMDB and GMIB Features without NLG Rider Feature
The change in the liabilities for variable annuity contracts with no no-lapse guarantee rider (“NLG”)GMDB and GMIB features liabilities, beforeand without a NLG feature are summarized in the tables below. The amounts for the direct contracts (before reinsurance ceded,ceded) and assumed contracts are reflected in the consolidated balance sheets in Futurefuture policy benefits and other policyholders’ liabilities:liabilities.

 GMDB     GMIB     Total    
 (in millions)
Balance at January 1, 2018$4,085
 $4,800
 $8,885
Paid guarantee benefits(101) (32) (133)
Other changes in reserve97
 (136) (39)
Balance at March 31, 2018$4,081
 $4,632
 $8,713
Balance at January 1, 2017$3,170
 $3,868
 $7,038
Paid guarantee benefits(89) (32) (121)
Other changes in reserve187
 1,919
 2,106
Balance at March 31, 2017$3,268
 $5,755
 $9,023
37


43
Table of Contents
AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNotes to Consolidated Financial Statements (Unaudited), Continued
(UNAUDITED)

The following table summarizesamounts for the ceded GMDB liabilities,contracts are reflected in the consolidated balance sheets in Amountsamounts due from reinsurers:
 Three Months Ended March 31,
 2018 2017
 (in millions)
Balance, beginning of year$108
 $90
Paid guarantee benefits(5) (3)
Other changes in reserve2
 2
Balance, End of Period$105
 $89
reinsurers. The following table summarizesamounts for the assumed GMDB liabilities,ceded GMIB that are reflected in the consolidated balance sheets in Future policy benefitsGMIB reinsurance contract asset are at fair value.

Change in Liability for Variable Annuity Contracts with GMDB and other policyholders’ liabilities:GMIB Features and No NLG Feature
Three and Nine Months Ended September 30, 2022 and 2021
 Three Months Ended March 31,
 2018 2017
 (in millions)
Balance, beginning of year$95
 $121
Paid guarantee benefits(6) (5)
Other changes in reserve(7) (8)
Balance, End of Period$82
 $108

GMDBGMIB
DirectAssumed
(1) (2)		CededDirectAssumed
(1) (2)		Ceded
(in millions)
Balance, July 1, 2022$5,096 $— $(2,276)$6,165 $— $(3,707)
Paid guarantee benefits(152)— 63 (171)— 46 
Other changes in reserve379 — (147)(312)— 341 
Balance, September 30, 2022$5,323 $— $(2,360)$5,682 $— $(3,320)
Balance, July 1, 2021$5,091 $— $(2,262)$5,905 $— $(4,168)
Paid guarantee benefits(103)— 41 (87)— 16 
Other changes in reserve(6)— 2 131 — 89 
Impact of the Venerable Transaction— — — — — — 
Balance, September 30, 2021$4,982 $— $(2,219)$5,949 $— $(4,063)

GMDBGMIB
DirectAssumed
(1) (2)		CededDirectAssumed
(1) (2)		Ceded
(in millions)
Balance, January 1, 2022$4,951 $— $(2,216)$5,892 $— $(3,968)
Paid guarantee benefits(433)— 180 (437)— 53 
Other changes in reserve805 — (324)227 — 595 
Balance, September 30, 2022$5,323 $— $(2,360)$5,682 $— $(3,320)
Balance, January 1, 2021$5,097 $72 $(88)$6,026 $196 $(2,488)
Paid guarantee benefits(350)(12)64 (271)(49)41 
Other changes in reserve235 14 (19)194 (7)525 
Impact of the Venerable Transaction— (74)(2,176)— (140)(2,141)
Balance, September 30, 2021$4,982 $— $(2,219)$5,949 $— $(4,063)
______________
(1)Change in Assumed is driven by the sale of CSLRC to Venerable.
(2)Includes the impact as of June 1, 2021 on the ceded reserves to Venerable. See Note 1 of the Notes to these Consolidated Financial Statements for details of the Venerable Transaction.
Liabilities for Embedded and Freestanding Insurance Related Derivatives
The liability for the GMxB derivative features, liability, the liability for SCS, SIO, MSO and IUL indexed features and the asset and liability for the GMIB reinsurance contract assetcontracts and amounts due from reinsurers related to GMIB NLG product features (GMIB NLG Reinsurance) are considered embedded or freestanding insurance derivatives and are reported at fair value. Summarized in the table below is a summary ofFor the fair value of the assets and liabilities associated with these liabilitiesembedded or freestanding insurance derivatives, see Note 7 of the Notes to these Consolidated Financial Statements.
Account Values and Net Amount at March 31, 2018Risk
Account Values and December 31, 2017:
 March 31,
2018		 December 31,
2017
 (in millions)  
    
GMIBNLG(1)
$3,715
 $4,056
SCS, SIO, MSO, IUL indexed features(2)
1,683
 1,786
Assumed GMIB reinsurance Contracts(1)
173
 194
GWBL/GMWB(1)
121
 130
GIB(1)
(36) (27)
GMAB(1)
4
 5
Total embedded and freestanding derivative liabilities$5,660
 $6,144
    
GMIB reinsurance contract asset(3)
$1,734
 $1,894
(1)Reported in Future policyholders’ benefits and other policyholders’ liabilities in the consolidated balance sheets.
(2)Reported in Policyholders’ account balances in the consolidated balance sheets.
(3)Reported in GMIB reinsurance contract asset, at fair value in the consolidated balance sheets.



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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

The March 31, 2018 valuesNAR for direct variable annuity contracts in-force on such datein force with GMDB and GMIB features as of September 30, 2022 are presented in the following table.tables by guarantee type. For contracts with the GMDB feature, the net amount at riskNAR in the event of death is the amount by which the GMDB exceedfeature exceeds the related account values.Account Values. For

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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

contracts with the GMIB feature, the net amount at riskNAR in the event of annuitization is the amount by which the present value of the GMIB benefits exceedsexceed the related account values,Account Values, taking into account the relationship between current annuity purchase rates and the GMIB guaranteed annuity purchase rates. Since variable annuity contracts with GMDB guaranteesfeatures may also offer GMIB guarantees in the same contract, the GMDB and GMIB amounts listed are not mutually exclusive:exclusive.
Direct Variable Annuity Contract Values
 
Return of
Premium
 Ratchet Roll-Up Combo Total
 (Dollars in millions)
GMDB:         
Account values invested in:         
General Account$13,848
 $107
 $64
 $194
 $14,213
Separate Accounts$45,136
 $9,319
 $3,381
 $34,668
 $92,504
Net amount at risk, gross$186
 $117
 $2,016
 $16,388
 $18,707
Net amount at risk, net of amounts reinsured$186
 $111
 $1,378
 $16,388
 $18,063
Average attained age of policyholders51
 67
 73
 68
 55
Percentage of policyholders over age 709.7% 40.9% 63.7% 47.4% 18.3%
Range of contractually specified interest ratesN/A
 N/A
 3%-6%
 3%-6.5%
 3%-6.5%
GMIB:         
Account values invested in:         
General AccountN/A
 N/A
 $24
 $285
 $309
Separate AccountsN/A
 N/A
 $20,855
 $39,604
 $60,459
Net amount at risk, grossN/A
 N/A
 $883
 $6,322
 $7,205
Net amount at risk, net of amounts reinsuredN/A
 N/A
 $268
 $5,738
 $6,006
Average attained age of policyholdersN/A
 N/A
 70
 69
 69
Weighted average years remaining until annuitizationN/A
 N/A
 1.7
 0.7
 0.8
Range of contractually specified interest ratesN/A
 N/A
 3%-6%
 3%-6.5%
 3%-6.5%


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

The March 31, 2018 values for assumed variable annuity contracts in force on such dateContracts with GMDB and GMIB features are presentedFeatures
as of September 30, 2022
Guarantee Type
Return of PremiumRatchetRoll-UpComboTotal
(in millions, except age and interest rate)
Variable annuity contracts with GMDB features
Account Values invested in:
General Account$16,657$94$48$148$16,947
Separate Accounts44,8797,2132,38424,54779,023
Total Account Values$61,536$7,307$2,432$24,695$95,970
NAR, gross$1,176 $1,802 $1,975$24,164$29,117
NAR, net of amounts reinsured$1,164 $1,630 $1,439$13,074$17,307
Average attained age of policyholders (in years)51.6 69.6 76.0 71.6 55.4 
Percentage of policyholders over age 7012.1 %52.1 %74.2 %60.0 %21.1 %
Range of contractually specified interest ratesN/AN/A3% - 6%3% - 6.5%3% - 6.5%
Variable annuity contracts with GMIB features
Account Values invested in:
General Account$— $— $14$193$207
Separate Accounts— — 20,23525,77146,006
Total Account Values$— $— $20,249$25,964$46,213
NAR, gross$—$—$546$8,237$8,783
NAR, net of amounts reinsured$—$—$176$3,377$3,553
Average attained age of policyholders (in years)N/AN/A65.6 71.3 69.1 
Weighted average years remaining until annuitizationN/AN/A5.6 0.5 2.4 
Range of contractually specified interest ratesN/AN/A3% - 6%3% - 6.5%3% - 6.5%

For more information about the reinsurance programs of the Company’s GMDB and GMIB exposure, see “Reinsurance” in Note 11 of the following table:Notes to the Consolidated Financial Statements 2021 Form 10-K.
Assumed Variable Annuity Contract Values
 
Return of
Premium
 Ratchet Roll-Up Combo Total
 (Dollars in millions)
GMDB:         
Reinsured Account values$1,023
 $5,849
 $302
 $1,879
 $9,053
Net amount at risk assumed$7
 $314
 $24
 $321
 $666
Average attained age of policyholders67
 72
 77
 75
 72
Percentage of policyholders over age 7041.4% 60.8% 76.6% 74.2% 61.9%
Range of contractually specified interest ratesN/A
 N/A
 3%-10%
 5%-10%
 3%-10%
GMIB:         
Reinsured Account values$978
 $52
 $277
 $1,338
 $2,645
Net amount at risk assumed$2
 $—
 $38
 $215
 $255
Average attained age of policyholders71
 74
 71
 68
 70
Percentage of policyholders over age 7061.6% 63.7% 55.9% 48.1% 54.2%
Range of contractually specified interest rates(1)
N/A
 N/A
 3.3%-6.5%
 6%-6%
 3.3%-6.5%
(1)In general, for policies with the highest contractual interest rate shown (10%), the rate applied only for the first 10 years after issue, which have now elapsed.
B) Separate AccountAccounts Investments by Investment Category Underlying Variable Annuity Contracts with GMDB and GMIB Features
The total account valuesAccount Values of variable annuity contracts with GMDB and GMIB features include amounts allocated to the guaranteed interest option, which is part of the General Account and variable investment options that invest through Separate Accounts in variable insurance trusts. The following table presents the aggregate fair value of assets, by major investment category, held by Separate Accounts that support variable annuity contracts with GMDB and GMIB guarantees.features. The investment performance of the assets impacts the related account valuesAccount Values and, consequently, the net amount of riskNAR associated with the GMDB and GMIB benefits and guarantees. Because the Company’s variable annuity contracts offer both GMDB and GMIB features, GMDB and GMIB amounts are not mutually exclusive.



39
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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNotes to Consolidated Financial Statements (Unaudited), Continued
(UNAUDITED)

Investment in Separate Account Investment OptionsVariable Insurance Trust Mutual Funds

March 31,
2018		 December 31, 2017 (1) September 30, 2022December 31, 2021
Mutual Fund TypeMutual Fund TypeGMDBGMIBGMDBGMIB
(in millions)(in millions)
GMDB:   
Equity$40,678
 $41,658
Equity$37,285 $13,460 $52,771 $20,015 
Fixed income5,384
 5,469
Fixed income4,474 2,028 5,391 2,507 
Balanced45,485
 46,577
Balanced36,134 30,264 48,390 40,491 
Other957
 968
Other1,130 254 1,025 263 
Total$92,504
 $94,672
Total$79,023 $46,006 $107,577 $63,276 
GMIB:   
Equity$19,156
 $19,928
Fixed income3,074
 3,150
Balanced37,918
 38,890
Other311
 318
Total$60,459
 $62,286
(1)Amounts previously reported were as follows in millions: (a) GMDB: Equity $78,069, Fixed Income $2,234, Balanced $14,084, and Other $283; (b) GMIB: Equity $50,429, Fixed Income $1,568, Balanced $10,165, and Other $124.
C) Hedging Programs for GMDB, GMIB, GIB and Other Features
Beginning in 2003, theThe Company establishedhas a program intended to hedge certain risks associated first with the GMDB feature and beginning in 2004, with the GMIB feature of the Accumulator series of variable annuity products. The program has also been extended to cover other guaranteed benefits as they have been made available. This program utilizes derivative contracts, such as exchange-traded equity, currency and interest rate futures contracts, total return and/or equity swaps, interest rate swap and floor contracts, swaptions, variance swaps as well as equity options, that collectively are managed in an effort to reduce the economic impact of unfavorable changes in guaranteed benefits’ exposures attributable to movements in the capital markets. At the present time, this program hedges certain economic risks on products sold from 2001 forward, to the extent such risks are not externally reinsured. At March 31, 2018, the total account value and net amount at risk of the hedged variable annuity contracts were $68,663 million and $17,102 million, respectively, with the GMDB feature and $57,781 million and $$7,236 million, respectively, with the GMIB and GIB feature. A hedge program is also used to manage certain capital markets risks associated with the products the Company has assumed that have GMDB and GMIB features. At March 31, 2018, the total account value and net amount at risk of the hedged assumed variable annuity contracts were $9,053 million and $666 million, respectively, with the GMDB feature and $2,645 million and $255 million, respectively, with the GMIB feature.
These programs do not qualify for hedge accounting treatment. Therefore, gains (losses) on the derivatives contracts used in these programs, including current period changes in fair value, are recognized in net investment income (loss)derivative gains (losses) in the period in which they occur, and may contribute to income (loss) volatility.
D) Variable and Interest-Sensitive Life Insurance Policies -– NLG
The NLG feature contained in variable and interest-sensitive life insurance policies keeps them in force in situations where the policy value is not sufficient to cover monthly charges then due. The NLG remains in effect so long as the policy meets a contractually specified premium funding test and certain other requirements.


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

The following table summarizeschange in the NLG liabilities, reflected in the General Account in Futurefuture policy benefits and other policyholders’ liabilities the related reinsurance reserve ceded, reflected in Amounts due from reinsurers and deferred cost of reinsurance, reflected in Other assets in the Consolidatedconsolidated balance sheets:sheets, is summarized in the table below.
Direct Liability (1)
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Beginning balance$1,134 $1,070 $1,096 $1,022 
Paid guarantee benefits(46)(24)(62)(52)
Other changes in reserves74 38 128 114 
Ending balance$1,162 $1,084 $1,162 $1,084 
 
Direct
Liability(1)
 (in millions)
Balance at January 1, 2018$686
Paid Guaranteed Benefits(8)
Other changes in reserves26
Balance at March 31, 2018$704
Balance at January 1, 2017$1,307
Other changes in reserves4
Balance at March 31, 2017$1,311
_____________
(1)There were no amounts of reinsurance ceded in any period presented.

6)    REINSURANCE AGREEMENTS
Effective February 1, 2018, AXA Equitable Life entered into a coinsurance reinsurance agreement (the “Coinsurance Agreement”) to cede 90% of its single premium deferred annuities (SPDA) products issued between 1978-2001 and its Guaranteed Growth Annuity (GGA) single premium deferred annuity products issued between 2001-2014. As a result of this agreement, AXA Equitable Life transferred securities with a market value of $604 million and cash of $31 million to equal the statutory reserves of approximately $635 million. As the risks transferred by AXA Equitable Life to the reinsurer under the Coinsurance Agreement are not considered insurance risks and therefore do not qualify for reinsurance accounting, AXA Equitable Life applied deposit accounting. Accordingly, AXA Equitable Life recorded the transferred assets of $635 million as a deposit asset recorded in Other assets, net of the ceding commissions paid to the reinsurer.
7)    FAIR VALUE DISCLOSURES
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The accounting guidance establishedU.S. GAAP establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value, and identifies three levels of inputs that may be used to measure fair value:
Level 1    Unadjusted quoted prices for identical instruments in active markets. Level 1 fair values generally are supported by market transactions that occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

Level 2    Observable inputs other than Level 1 prices, such as quoted prices for similar instruments, quoted prices in markets that are not active, and inputs to model-derived valuations that are directly observable or can be corroborated by observable market data.
Level 3    Unobservable inputs supported by little or no market activity and often requiring significant management judgment or estimation, such as an entity’s own assumptions about the cash flows or other significant components of value that market participants would use in pricing the asset or liability.


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

The Company uses unadjusted quoted market prices to measure the fair value offor those instruments that are actively traded in financial markets. In cases where quoted market prices are not available, fair values are measured using present value or other valuation techniques. The fair value determinations are made at a specific point in time, based on available market information and judgments about the financial instrument, including estimates of the timing and amount of expected future cash flows and the credit standing of counterparties. Such adjustments do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument, nor do they consider the tax impact of the realization of unrealized gains or losses. In many cases, the fair value cannot be substantiated by direct comparison to independent markets, nor can the disclosed value be realized in immediate settlement of the instrument.
Management is responsible for the determination of the value of investments carried at fair value and the supporting methodologies and assumptions. Under the terms of various service agreements, the Company often utilizes independent valuation service providers to gather, analyze, and interpret market information and derive fair values based upon relevant methodologies and assumptions for individual securities. These independent valuation service providers typically obtain data about market transactions and other key valuation model inputs from multiple sources and, through the use of widely accepted valuation models, provide a single fair value measurement for individual securities for which a fair value has been requested. As further described below with respect to specific asset classes, these inputs include, but are not limited to, market prices for recent trades and transactions in comparable securities, benchmark yields, interest rate yield curves, credit spreads, quoted prices for similar securities, and other market-observable information, as applicable. Specific attributes of the security being valued also are considered, including its term, interest rate, credit rating, industry sector, and when applicable, collateral quality and other security- or issuer-specific information. When insufficient market observable information is available upon which to measure fair value, the Company either will request brokers knowledgeable about these securities to provide a non-binding quote or will employ internal valuation models. Fair values received from independent valuation service providers and brokers and those internally modeled or otherwise estimated are assessed for reasonableness.
Assets and liabilities measuredLiabilities Measured at fair valueFair Value on a recurring basis are summarized below. At March 31, 2018 and December 31, 2017, no assets were required to be measured at fair value on a non-recurring basis. Nonrecurring Basis
Fair value measurements are required on a non-recurring basis for certain assets including goodwill and mortgage loans on real estate, only when an OTTIimpairment or other event occurs. When such fair value measurements are recorded, they must be classified and disclosed within the fair value hierarchy. The Company recognizes transfers between valuation levels at the beginningevents occur. As of the reporting period.


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Fair Value Measurements at March 31, 2018
 Level 1 Level 2 Level 3 Total
 (in millions)
Assets       
Investments       
Fixed maturities, available-for-sale:       
Public Corporate$—
 $18,581
 $135
 $18,716
Private Corporate—
 6,286
 1,118
 7,404
U.S. Treasury, government and agency—
 14,653
 —
 14,653
States and political subdivisions—
 438
 39
 477
Foreign governments—
 419
 —
 419
Residential mortgage-backed(1)
—
 627
 —
 627
Asset-backed(2)
—
 135
 540
 675
Redeemable preferred stock180
 333
 —
 513
Subtotal180
 41,472
 1,832
 43,484
Other equity investments13
 —
 34
 47
Trading securities448
 14,427
 44
 14,919
Other invested assets:       
Short-term investments—
 854
 —
 854
Assets of consolidated VIEs/VOEs1,691
 291
 32
 2,014
Swaps—
 356
 —
 356
Credit Default Swaps—
 29
 —
 29
Options—
 1,939
 —
 1,939
Subtotal1,691
 3,469
 32
 5,192
Cash equivalents4,894
 —
 —
 4,894
Segregated securities—
 1,025
 —
 1,025
GMIB reinsurance contract asset—
 —
 1,734
 1,734
Separate Accounts’ assets118,466
 2,845
 357
 121,668
Total Assets$125,692
 $63,238
 $4,033
 $192,963
Liabilities       
Other invested liabilities       
GMxB derivative features’ liability$—
 $—
 $3,977
 $3,977
SCS, SIO, MSO and IUL indexed features’ liability—
 1,683
 —
 1,683
Liabilities of consolidated VIEs/VOEs1,190
 18
 —
 1,208
Contingent payment arrangements—
 —
 14
 14
Total Liabilities$1,190
 $1,701
 $3,991
 $6,882
(1)Includes publicly traded agency pass-through securities and collateralized obligations.
(2)Includes credit-tranched securities collateralized by sub-prime mortgages and other asset types and credit tenant loans.



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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Fair Value Measurements at December 31, 2017
 Level 1 Level 2 Level 3 Total
 (in millions)
Assets       
Investments       
Fixed maturities, available-for-sale:       
Public Corporate$—
 $17,906
 $48
 $17,954
Private Corporate—
 6,390
 1,102
 7,492
U.S. Treasury, government and agency—
 18,508
 —
 18,508
States and political subdivisions—
 449
 40
 489
Foreign governments—
 419
 —
 419
Residential mortgage-backed(1)
—
 818
 —
 818
Asset-backed(2)
—
 208
 541
 749
Redeemable preferred stock184
 327
 1
 512
Subtotal184
 45,025
 1,732
 46,941
Other equity investments13
 —
 34
 47
Trading securities485
 13,647
 38
 14,170
Other invested assets:       
Short-term investments—
 1,730
 —
 1,730
Assets of consolidated VIEs/VOEs1,060
 215
 27
 1,302
Swaps—
 222
 —
 222
Credit Default Swaps—
 33
 —
 33
Futures(2) —
 —
 (2)
Foreign currency contract(3)
—
 5
 —
 5
Options—
 1,999
 —
 1,999
Subtotal1,058
 4,204
 27
 5,289
Cash equivalents3,608
 —
 —
 3,608
Segregated securities—
 825
 —
 825
GMIB reinsurance contract asset—
 —
 1,894
 1,894
Separate Accounts’ assets121,000
 2,997
 349
 124,346
Total Assets$126,348
 $66,698
 $4,074
 $197,120
Liabilities       
Other invested liabilities       
GMxB derivative features’ liability$—
 $—
 $4,358
 $4,358
SCS, SIO, MSO and IUL indexed features’ liability—
 1,786
 —
 1,786
Liabilities of consolidated VIEs/VOEs670
 22
 —
 692
Contingent payment arrangements—
 —
 15
 15
Total Liabilities$670
 $1,808
 $4,373
 $6,851
(1)Includes publicly traded agency pass-through securities and collateralized obligations.
(2)Includes credit-tranched securities collateralized by sub-prime mortgages and other asset types and credit tenant loans.
(3)Reported in Other assets in the consolidated balance sheets.

At March 31, 2018September 30, 2022 and December 31, 2017, respectively, the2021, no assets or liabilities were required to be measured at fair value of public fixed maturities is approximately $35,131 millionon a non-recurring basis.
Assets and $38,762 million or approximately 18.5%Liabilities Measured at Fair Value on a Recurring Basis
Assets and 20.0% of the Company’s total assetsliabilities measured at fair value on a recurring basis (excluding GMIB reinsurance contractsare summarized below.

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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

Fair Value Measurements as of September 30, 2022

Level 1Level 2Level 3Total
 (in millions)
Assets
Investments
Fixed maturities, AFS:
Corporate (1)$— $42,635 $1,911 $44,546 
U.S. Treasury, government and agency— 6,030 — 6,030 
States and political subdivisions— 555 29 584 
Foreign governments— 926 — 926 
Residential mortgage-backed (2)— 476 — 476 
Asset-backed (3)— 8,735 10 8,745 
Commercial mortgage-backed— 3,218 32 3,250 
Redeemable preferred stock— 43 — 43 
Total fixed maturities, AFS— 62,618 1,982 64,600 
Fixed maturities, at fair value using the fair value option— 1,174 374 1,548 
Other equity investments (7)270 487 12 769 
Trading securities276 303 52 631 
Other invested assets:
Short-term investments— 374 — 374 
Assets of consolidated VIEs/VOEs86 390 5 481 
Swaps— (286)— (286)
Credit default swaps— 12 — 12 
Futures8 — — 8 
Options— 2,310 — 2,310 
Total other invested assets94 2,800 5 2,899 
Cash equivalents2,199 561 — 2,760 
Segregated securities— 1,335 — 1,335 
Amounts due from reinsurer (6)— — 4,312 4,312 
GMIB reinsurance contracts asset— — 1,289 1,289 
Separate Accounts assets (4)106,565 2,374 1 108,940 
Total Assets$109,404 $71,652 $8,027 $189,083 
Liabilities
Notes issued by consolidated VIE’s, at fair value using the fair value option (5)$— $1,398 $— $1,398 
GMxB derivative features’ liability— — 5,825 5,825 
SCS, SIO, MSO and IUL indexed features’ liability— 2,086 — 2,086 
Liabilities of consolidated VIEs and VOEs17 5 — 22 
Contingent payment arrangements— — 273 273 
Total Liabilities$17 $3,489 $6,098 $9,604 
______________
(1)Corporate fixed maturities includes both public and segregatedprivate issues.
(2)Includes publicly traded agency pass-through securities and collateralized obligations.
(3)Includes credit-tranched securities collateralized by sub-prime mortgages, credit risk transfer securities and other asset types.
(4)Separate Accounts assets included in the fair value hierarchy exclude investments in entities that calculate NAV per share (or its equivalent) as a practical expedient. Such investments excluded from the fair value hierarchy include investments in real estate. As of September 30, 2022, the fair value of such investments was $452 million.

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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

(5)Includes CLO short-term debt of $248 million, which is inclusive as fair valued within Notes issued by consolidated VIE’s, at fair value using the fair value option. Accrued interest payable of $15 million is reported in Notes issued by consolidated VIE’s, at fair value using the fair value option in the consolidated balance sheets, which is not required to be measured at fair value on a recurring basis.

(6)This represents GMIB NLG ceded reserves related to the Venerable Transaction. See Note 1 of the Notes to these Consolidated Financial Statements for details of the Venerable Transaction.
(7)Includes short position equity securities of $23 million that are reported in other liabilities.
Fair Value Measurements as of December 31, 2021

Level 1Level 2Level 3Total
 (in millions)
Assets
Investments
Fixed maturities, AFS:
Corporate (1)$— $51,007 $1,504 $52,511 
U.S. Treasury, government and agency— 15,385 — 15,385 
States and political subdivisions— 627 35 662 
Foreign governments— 1,152 — 1,152 
Residential mortgage-backed (2)— 98 — 98 
Asset-backed (3)— 5,926 8 5,934 
Commercial mortgage-backed (2)— 2,401 20 2,421 
Redeemable preferred stock— 53 — 53 
Total fixed maturities, AFS— 76,649 1,567 78,216 
Fixed maturities, at fair value using the fair value option1,440 201 1,641 
Other equity investments322 457 5 784 
Trading securities340 226 65 631 
Other invested assets:

Short-term investments— 30 — 30 
Assets of consolidated VIEs/VOEs166 450 11 627 
Swaps— (473)— (473)
Credit default swaps— (1)— (1)
Futures(1)— — (1)
Options— 6,959 — 6,959 
Swaptions— — — — 
Total other invested assets165 6,965 11 7,141 
Cash equivalents3,275 293 — 3,568 
Segregated securities— 1,504 — 1,504 
Amounts due from reinsurer— — 5,813 5,813 
GMIB reinsurance contracts asset— — 1,848 1,848 
Separate Accounts assets (4)144,124 2,572 1 146,697 
Total Assets$148,226 $90,106 $9,511 $247,843 
Liabilities
Notes issued by consolidated VIE’s, at fair value using the fair value option (5)$— $1,277 $— $1,277 
GMxB derivative features’ liability— — 8,525 8,525 
SCS, SIO, MSO and IUL indexed features’ liability— 6,773 — 6,773 
Liabilities of consolidated VIEs and VOEs16 2 — 18 
Contingent payment arrangements— — 38 38 
Total Liabilities$16 $8,052 $8,563 $16,631 
______________


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNotes to Consolidated Financial Statements (Unaudited), Continued
(UNAUDITED)

(1)Corporate fixed maturities includes both public and private issues.
(2)Includes publicly traded agency pass-through securities and collateralized obligations.
(3)Includes credit-tranched securities collateralized by sub-prime mortgages and other asset types and credit tenant loans.
(4)Separate Accounts assets included in the fair value hierarchy exclude investments in entities that calculate NAV per share (or its equivalent) as a practical expedient. Such investments excluded from the fair value hierarchy include investments in real estate and commercial mortgages. As of December 31, 2021, the fair value of such investments was $404 million.
(5)Includes CLO short-term debt of $92 million, which is inclusive as fair valued within Notes issued by consolidated VIE’s, at fair value using the fair value option Accrued interest payable of $6 million is reported in Notes issued by consolidated VIE’s, at fair value using the fair value option in the consolidated balance sheets, which is not required to be measured at fair value on a recurring basis). basis.
Public Fixed Maturities
The fair values of the Company’s public fixed maturity securitiesmaturities, including those accounted for using the fair value option are generally based on prices obtained from independent valuation service providers and for which the Company maintains a vendor hierarchy by asset type based on historical pricing experience and vendor expertise. Although each security generally is priced by multiple independent valuation service providers, the Company ultimately uses the price received from the independent valuation service provider highest in the vendor hierarchy based on the respective asset type, with limited exception. To validate reasonableness, prices also are internally reviewed by those with relevant expertise through comparison with directly observed recent market trades. Consistent with the fair value hierarchy, public fixed maturity securitiesmaturities validated in this manner generally are reflected within Level 2, as they are primarily based on observable pricing for similar assets and/or other market observable inputs. If the pricing information received from independent valuation service providers is not reflective of market activity or other inputs observable in the market, the Company may challenge the price through a formal process in accordance with the terms of the respective independent valuation service provider agreement. If as a result it is determined that the independent valuation service provider is able to reprice the security in a manner agreed as more consistent with current market observations, the security remains within Level 2. Alternatively, a Level 3 classification may result if the pricing information then is sourced from another vendor, non-binding broker quotes, or internally-developed valuations for which the Company’s own assumptions about market-participant inputs would be used in pricing the security.
At March 31, 2018 and December 31, 2017, respectively, the fair value of private fixed maturities is approximately $8,353 million and $8,179 million or approximately 4.4% and 4.2% of the Company’s total assets measured at fair value on a recurring basis. Private Fixed Maturities
The fair values of the Company’s private fixed maturities, including those accounted for using the fair value option are determined from prices obtained from independent valuation service providers. Prices not obtained from an independent valuation service provider are determined by using a discounted cash flow model or a market comparable company valuation technique. In certain cases, these models use observable inputs with a discount rate based upon the average of spread surveys collected from private market intermediaries who are active in both primary and secondary transactions, taking into account, among other factors, the credit quality and industry sector of the issuer and the reduced liquidity associated with private placements. Generally, these securities have been reflected within Level 2. For certain private fixed maturities, the discounted cash flow model or a market comparable company valuation technique may also incorporate unobservable inputs, which reflect the Company’s own assumptions about the inputs market participants would use in pricing the asset. To the extent management determines that such unobservable inputs are significant to the fair value measurement of a security, a Level 3 classification generally is made.
Notes issued by consolidated VIE’s, at fair value using the fair value option
These notes are based on the fair values of corresponding fixed maturity collateral. The CLO liabilities are also reduced by the fair value of the beneficial interests the Company retains in the CLO and the carrying value of any beneficial interests that represent compensation for services. As disclosed in Note 3, at March 31, 2018 and December 31, 2017, respectively, the notes are valued based on the reference collateral, they are classified as Level 2 or 3. See “Fair Value Option” below for additional information.
Freestanding Derivative Positions
The net fair value of the Company’s freestanding derivative positions is approximately 44.8% and 42.9% of Other invested assets measured at fair value on a recurring basis, with a value of $2,324 million and $2,258 million. The fair valuesas disclosed in Note 4 of the Company’s derivative positionsNotes to these Consolidated Financial Statements are generally based on prices obtained either from independent valuation service providers or derived by applying market inputs from recognized vendors into industry standard pricing models. The majority of these derivative contracts are traded in the OTC derivative market and are classified in Level 2. The fair values of derivative assets and liabilities traded in the OTC market are determined using quantitative models that require use of the contractual terms of the derivative instruments and multiple market inputs, including interest rates, prices, and indices to generate continuous yield or pricing curves, including overnight index swap (“OIS”) curves, and volatility factors, which then are applied to value the positions. The predominance of market inputs is actively quoted and can be validated through external sources or reliably interpolated if less observable. If the pricing information received from independent valuation service providers is not reflective of market activity or other inputs observable in the market, the Company may challenge the price through a formal process in accordance with the terms
Level Classifications of the respective independent valuation service provider agreement. IfCompany’s Financial Instruments
Financial Instruments Classified as a result it is determined that the independent valuation service provider is able to reprice the derivative instrument in a manner agreed as more consistent with current market observations, the position remains within Level 2. Alternatively, a Level 3 classification may result if the pricing information then is sourced from another vendor, non-binding broker quotes, or internally-developed valuations for which the Company’s own assumptions about market-participant inputs would be used in pricing the security.1
At March 31, 2018 and December 31, 2017, respectively, investmentsInvestments classified as Level 1 comprise approximately 66.1% and 64.9% of assets measured at fair value on a recurring basis and primarily include redeemable preferred stock, trading securities, cash equivalents and Separate AccountAccounts assets. Fair value measurements classified as Level 1


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

include exchange-traded prices of fixed maturities, equity securities and derivative contracts, and net asset values for transacting subscriptions and redemptions

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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

of mutual fund shares held by Separate Accounts. Cash equivalents classified as Level 1 include money market accounts, overnight commercial paper and highly liquid debt instruments purchased with an original maturity of three months or less and are carried at cost as a proxy for fair value measurement due to their short-term nature.
At March 31, 2018 and December 31, 2017, respectively, investmentsFinancial Instruments Classified as Level 2
Investments classified as Level 2 comprise approximately 32.7% and 34.0% of assetsare measured at fair value on a recurring basis and primarily include U.S. government and agency securities, and certain corporate debt securities and financial assets and liabilities accounted for using the fair value option, such as public and private fixed maturities. As market quotes generally are not readily available or accessible for these securities, their fair value measures are determined utilizing relevant information generated by market transactions involving comparable securities and often are based on model pricing techniques that effectively discount prospective cash flows to present value using appropriate sector-adjusted credit spreads commensurate with the security’s duration, also taking into consideration issuer-specific credit quality and liquidity. Segregated securities classified as Level 2 are U.S. Treasury bills segregated by AB in a special reserve bank custody account for the exclusive benefit of brokerage customers, as required by Rule 15c3-3 of the Exchange Act and for which fair values are based on quoted yields in secondary markets.
Observable inputs generally used to measure the fair value of securities classified as Level 2 include benchmark yields, reported secondary trades, issuer spreads, benchmark securities and other reference data. Additional observable inputs are used when available, and as may be appropriate, for certain security types, such as prepayment, default, and collateral information for the purpose of measuring the fair value of mortgage- and asset-backed securities. At March 31, 2018 and December 31, 2017, respectively, approximately $641 million and $875 million ofThe Company’s AAA-rated mortgage- and asset-backed securities are classified as Level 2 for which the observability of market inputs to their pricing models is supported by sufficient, albeit more recently contracted, market activity in these sectors.
Certain Company products, such as the SCS, and EQUI-VEST variable annuity product,products, IUL and in the MSO fund available in some life contracts, offer investment options which permit the contract owner to participate in the performance of an index, ETF or commodity price. These investment options, which depending on the product and on the index selected, can currently have 1, 3, 5,one, three, five or 6six year terms, provide for participation in the performance of specified indices, ETF or commodity price movement up to a segment-specific declared maximum rate. Under certain conditions that vary by product, e.g., holding these segments for the full term, these segments also shield policyholders from some or all negative investment performance associated with these indices, ETF or commodity prices. These investment options have defined formulaic liability amounts, and the current values of the option component of these segment reserves are accounted forclassified as Level 2 embedded derivatives. The fair values of these embedded derivatives are based on data obtained from independent valuation service providers.
At March 31, 2018 and December 31, 2017, respectively,Financial Instruments Classified as Level 3
The Company’s investments classified as Level 3 comprise approximately 1.2% and 1.1% of assets measured at fair value on a recurring basis and primarily include corporate debt securities and financial assets and liabilities accounted for using the fair value option, such as private fixed maturities.maturities and asset-backed securities. Determinations to classify fair value measures within Level 3 of the valuation hierarchy generally are based upon the significance of the unobservable factors to the overall fair value measurement. Included in the Level 3 classification at March 31, 2018 and December 31, 2017, respectively, were approximately $95 million and $97 million ofare fixed maturities with indicative pricing obtained from brokers that otherwise could not be corroborated to market observable data. The Company applies various due diligence procedures, as considered appropriate, to validate these non-binding broker quotes for reasonableness, based on its understanding of the markets, including use of internally-developed assumptions about inputs a market participant would use to price the security. In addition, approximately $540 million and $598 million of mortgage- and asset-backed securities are classified as Level 3 at March 31, 2018 and December 31, 2017, respectively.
The Company also issues certain benefits on its variable annuity products that are accounted for as derivatives and are also considered Level 3. The GMIBNLGGMIB NLG feature allows the policyholder to receive guaranteed minimum lifetime annuity payments based on predetermined annuity purchase rates applied to the contract’s benefit base if and when the contract account value is depleted and the NLG feature is activated. The GMWB feature allows the policyholder to withdraw at minimum, over the life of the contract, an amount based on the contract’s benefit base. The GWBL feature allows the policyholder to withdraw, each year for the life of the contract, a specified annual percentage of an amount


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

based on the contract’s benefit base. The GMAB feature increases the contract account value at the end of a specified period to a GMAB base. The GIB feature provides a lifetime annuity based on predetermined annuity purchase rates if and when the contract account value is depleted. This lifetime annuity is based on predetermined annuity purchase rates applied to a GIB base.
Level 3 also includes the GMIB reinsurance contract asset’sassets, which are accounted for as derivative contracts. The GMIB reinsurance contract asset and liabilities’ fair value reflects the present value of reinsurance premiums, andnet of recoveries, and risk margins over a range of market consistent economic scenarios while GMxB derivative features liability reflects the present value of expected future payments (benefits) less fees, adjusted for risk margins and

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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

nonperformance risk, attributable to GMxB derivative features’ liability over a range of market-consistent economic scenarios.
Also included are the Amounts due from Reinsurers related to the GMIB NLG product features (GMIB NLG Reinsurance). The fair value reflects the present value of reinsurance premiums, net of recoveries, adjusted for risk margins and nonperformance risk over a range of market consistent economic scenarios.
The valuations of the GMIB reinsurance contract asset, GMIB NLG Reinsurance and GMxB derivative features liability incorporate significant non-observable assumptions related to policyholder behavior, risk margins and equity projections of equity separate accountSeparate Account funds. The credit risks of the counterparty and of the Company are considered in determining the fair values of its GMIB reinsurance contract asset, GMIB NLG Reinsurance and GMxB derivative features liability positions, respectively, after taking into account the effects of collateral arrangements. Incremental adjustment to the swapU.S. Treasury curve for non-performance risk is made to the fair values of the GMIB reinsurance contract asset, GMIB NLG Reinsurance and liabilities and GMIBNLGGMIB NLG feature to reflect the claims-paying ratings of counterparties and the Company. Equity and fixed income volatilities were modeled to reflect current market volatilities. Due to the unique, long duration of the GMIBNLGGMIB NLG feature adjustments were made to the equity volatilities to remove the illiquidity bias associated with the longer tenors and GMIB NLG Reinsurance, risk margins were applied to the non-capital markets inputs to the GMIBNLGGMIB NLG valuations.
After giving consideration to collateral arrangements, the Company reducedimpact to the fair value of its GMIB reinsurance contract asset by $12was a decrease of $112 million and $8$107 million at March 31, 2018as of September 30, 2022 and December 31, 2017,2021, respectively, to recognize incremental counterparty non-performance risk and reducedrisk.
After giving consideration to collateral arrangements, the impact to the fair value of its GMIB reinsurance contract liabilities by $24Amounts due from Reinsurers was a decrease of $199 million and $24$210 million at March 31, 2018September 30, 2022 and December 31, 2017, respectively2021 to recognize its own incremental counterparty non-performance risk.
Lapse rates are adjusted at the contract level based on a comparison of the actuariallyactuarial calculated guaranteed values and the current policyholder account value, which include other factors such as considering surrender charges. Generally, lapse rates are assumed to be lower in periods when a surrender charge applies. A dynamic lapse function reduces the base lapse rate when the guaranteed amount is greater than the account value as in the moneyin-the-money contracts are less likely to lapse. For valuing the embedded derivative, lapse rates vary throughout the period over which cash flows are projected.
The Company’s Level 3 liabilities include contingent payment arrangements associated with acquisitions in 2010, 2013, 20142016 and 20162019 by AB. At each reporting date, AB estimates the fair values of the contingent consideration expected to be paid based upon probability-weighted AUMrevenue and revenuediscount rate projections, using unobservable market data inputs, which are included in Level 3 of the valuation hierarchy. The Company’s Level 3 liabilities also include contingent payment arrangements associated with a Renewal Rights Agreement (the “Renewal Rights Agreement”) that transitions certain group employee benefits policies beginning January 1, 2017 from an insurer exiting such business to MONY Life Insurance Company of America (“MLOA”). The fair value of the contingent payments liability associated with this transaction is measured and adjusted each reporting period through final settlement using projected premiums from these policies, net of potential surrenders and terminations, and applying a risk-adjusted discount factor (7.0% at March 31, 2018) to the resulting cash flows.
As of March 31, 2018 and December 31, 2017, the Company’s consolidated VIEs/VOEs hold $32 million and $27 million, respectively of investments that are classified as Level 3, primarily consist of corporate bonds that are vendor priced with no ratings available, bank loans, non-agency collateralized mortgage obligations and asset-backed securities.
InTransfers of Financial Instruments Between Levels 2 and 3
During the first threenine months of 2018, AFSended September 30, 2022, fixed maturities with fair values of $16$150 million were transferred out of Level 3 and into Level 2 principally due to the availability of trading activity and/or market observable inputs to measure and validate their fair values. In addition, AFS fixed maturities with fair value of $67$191 million were transferred from Level 2 into the Level 3 classification. These transfers in the aggregate represent approximately 0.5%7.1% of total equity at March 31, 2018.as of September 30, 2022.


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

InDuring the first threenine months of 2017, $0 million AFSended September 30, 2021, fixed maturities with fair values of $782 million were transferred out of Level 3 and into Level 2 principally due to the availability of trading activity and/or market observable inputs to measure and validate their fair values. In addition, AFS fixed maturities with fair value of $24$1 million were transferred from Level 2 into the Level 3 classification. These transfers in the aggregate represent approximately 0.2%5.9% of total equity at March 31, 2017.as of September 30, 2021.


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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

The tabletables below presents a reconciliationpresent reconciliations for all Level 3 assets and liabilities for the three months ended March 31, 2018 and 2017, respectively:
Level 3 Instruments
Fair Value Measurements
 Corporate State and
Political
Sub-
divisions		 Commercial
Mortgage-
backed		 Asset-
backed
 (in millions)
Balance, January 1, 2018$1,150
 $40
 $—
 $541
Total gains (losses), realized and unrealized, included in:       
Income (loss) as:       
Net investment income (loss)1
 —
 —
 —
Investment gains (losses), net—
 —
 —
 —
Subtotal1
 —
 —
 —
Other comprehensive income (loss)(21) (1) —
 —
Purchases189
 —
 —
 —
Sales(117) —
 —
 (1)
Settlements—
 —
 —
 —
Transfers into Level 3(1)
67
 —
 —
 —
Transfers out of Level 3(1)
(16) —
 —
 —
Balance, March 31, 2018$1,253
 $39
 $—
 $540
Balance, January 1, 2017$857
 $42
 $373
 $120
Total gains (losses), realized and unrealized, included in:       
Income (loss) as:       
Net investment income (loss)1
 —
 —
 —
Investment gains (losses), net—
 —
 (23) —
Subtotal1
 —
 (23) —
Other comprehensive income (loss)45
 —
 25
 5
Purchases171
 —
 —
 195
Sales(67) —
 (35) (3)
Transfers into Level 3(1)
18
 —
 —
 6
Transfers out of Level 3(1)
—
 —
 —
 —
Balance, March 31, 2017$1,025
 $42
 $340
 $323


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

 Redeemable
Preferred
Stock		 
Other
Equity
Investments(2)
 GMIB
Reinsurance
Contract Asset		 Separate
Accounts
Assets		 GMxB derivative features liability Contingent
Payment
Arrangement
 (in millions)
Balance, January 1, 2018$1
 $99
 $1,894
 $349
 $(4,358) $(15)
Total gains (losses), realized and unrealized, included in:           
Income (loss) as:           
Net investment income (loss)—
 —
 —
 —
 —
 —
Investment gains (losses), net—
 —
 —
 7
 —
 —
Net derivative gains (losses)—
 —
 (159) —
 460
 —
Subtotal—
 —
 (159) 7
 460
 —
Other comprehensive income (loss)—
 1
 —
 —
 —
 —
Purchases(2)
—
 4
 10
 3
 (84) —
Sales(3) 
(1) —
 (11) (1) 5
 —
Settlements(4)
—
 —
 —
 (1) —
 1
Activity related to consolidated VIEs—
 1
 —
 —
 —
 —
Transfers into Level 3(1)
—
 5
 —
 —
 —
 —
Transfers out of Level 3(1)
—
 —
 —
 —
 —
 —
Balance, March 31, 2018$—
 $110
 $1,734
 $357
 $(3,977) $(14)
Balance, January 1, 2017$1
 $88
 $1,735
 $313
 $(5,580) $(25)
Total gains (losses), realized and unrealized, included in:           
Income (loss) as:           
Net investment income (loss)—
 —
 —
 —
 —
 —
Investment gains (losses), net—
 (9) —
 10
 —
 —
Net derivative gains (losses)—
 —
 (71) 

 507
 —
Subtotal—
 (9) (71) 10
 507
 —
Other comprehensive income (loss)—
 —
 —
 —
 —
 —
Purchases(2)
—
 4
 9
 3
 (81) —
Sales(3) 
—
 (1) (14) (1) 8
 —
Settlements(4)
—
 

 —
 (1) —
 1
Activity related to consolidated VIEs—
 (9) —
 —
 —
 —
Transfers into Level 3(1)
—
 1
 —
 1
 —
 —
Transfers out of Level 3(1)
—
 

 —
 —
 —
 —
Balance, March 31, 2017$1
 $74
 $1,659
 $325
 $(5,146) $(24)
(1)Transfers into/out of Level 3 classification are reflected at beginning-of-period fair values.


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(2)For the GMIB reinsurance contract asset, and GMxB derivative features liability, represents attributed fee.
(3)For the GMIB reinsurance contract asset, represents recoveries from reinsurers and for GMxB derivative features liability represents benefits paid.
(4)For contingent payment arrangements, it represents payments under the arrangement.

The table below details changes in unrealized gains (losses) for the three and nine months ended March 31, 2018September 30, 2022 and 2017 by category for2021, respectively.

CorporateState and Political SubdivisionsAsset-backedCMBSTrading Securities, at Fair ValueFixed maturities, at FVO
Balance, July 1, 2022$1,767 $30 $18 $25 $52 $423 
Total gains and (losses), realized and unrealized, included in:
Net income (loss) as:
Net investment income (loss)1 — — — — (20)
Investment gains (losses), net(3)— — — — — 
Subtotal(2)— — — — (20)
Other comprehensive income (loss)(71)(1)1 — — — 
Purchases218 — (3)7 — 6 
Sales(34)— — — — 17 
Activity related to consolidated VIEs/VOEs— — — — — — 
Transfers into Level 3 (1)25 — — — — (84)
Transfers out of Level 3 (1)8 — (6)— — 32 
Balance, September 30, 2022$1,911 $29 $10 $32 $52 $374 
Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period (2)$— $— $— $— $— $(20)
Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period (2)$(70)$(1)$— $— $— $— 
Balance, July 1, 2021$1,261 $37 $128 $10 $39 $148 
Total gains and (losses), realized and unrealized, included in:
Net income (loss) as:
Net investment income (loss)1 — — — — (7)
Investment gains (losses), net(2)— — — — — 
Subtotal(1)— — — — (7)
Other comprehensive income (loss)4 (1)— — — — 
Purchases262 — (121)— — 62 
Sales(71)— (2)— — (17)
Activity related to consolidated VIEs/VOEs— — — — — — 
Transfers into Level 3 (1)(2)— — — — (14)
Transfers out of Level 3 (1)— — — — — 10 
Balance, September 30, 2021$1,453 $36 $5 $10 $39 $182 
Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period (2)$— $— $— $— $— $9 
Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period (2)$4 $(1)$— $— $— $— 

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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

_____
CorporateState and Political SubdivisionsAsset-backedCMBSTrading Securities, at Fair ValueFixed maturities, at FVO
Balance, January 1, 2022$1,504 $35 $8 $20 $65 $201 
Total gains and (losses), realized and unrealized, included in:
Net income (loss) as:
Net investment income (loss)3 — — — — (20)
Investment gains (losses), net(3)— — — (13)— 
Subtotal— — — — (13)(20)
Other comprehensive income (loss)(152)(5)— (2)— — 
Purchases777 — 9 14 — 159 
Sales(195)(1)(1)— — (36)
Activity related to consolidated VIEs/VOEs— — — — — — 
Transfers into Level 3 (1)90 — — — — 101 
Transfers out of Level 3 (1)(113)— (6)— — (31)
Balance, September 30, 2022$1,911 $29 $10 $32 $52 $374 
Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period (2)$— $— $— $— $(13)$(9)
Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period (2)$(149)$(5)$— $(2)$— $— 
Balance, January 1, 2021$1,702 $39 $20 $— $39 $80 
Total gains and (losses), realized and unrealized, included in:
Net income (loss) as:
Net investment income (loss)4 — — — — 4 
Investment gains (losses), net(14)— — — — — 
Subtotal(10)— — — — 4 
Other comprehensive income (loss)30 (2)— — — — 
Purchases721 — 3 10 — 192 
Sales(277)(1)(18)— — (26)
Activity related to consolidated VIEs/VOEs— — — — — — 
Transfers into Level 3 (1)— — — — — 1 
Transfers out of Level 3 (1)(713)— — — — (69)
Balance, September 30, 2021$1,453 $36 $5 $10 $39 $182 
Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period (2)$— $— $— $— $— $4 
Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period (2)$30 $(2)$— $— $— $— 
________
(1)Transfers into/out of the Level 3 assetsclassification are reflected at beginning-of-period fair values.
(2)For instruments held as of September 30, 2022 or September 30, 2021, amounts are included in net investment income or net derivative gains (losses) in the consolidated statements of income (loss) or unrealized gains (losses) on investments in the consolidated statements of comprehensive income.


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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

Other Equity Investments (7)GMIB Reinsurance Contract AssetAmounts Due from ReinsurersSeparate Accounts AssetsGMxB Derivative Features LiabilityContingent Payment Arrangement
Balance, July 1, 2022$67 $1,498 $4,681 $1 $(6,180)$(42)
Realized and unrealized gains (losses), included in Net income (loss) as:
Investment gains (losses), reported in net investment income(1)— — — — — 
Net derivative gains (losses) (1)— (196)(364)— 429 — 
Total realized and unrealized gains (losses)(1)(196)(364)— 429 — 
Other comprehensive income (loss)— — — — — — 
Purchases (2)(49)10 28 — (111)(228)
Sales (3)— (23)(33)— 37 — 
Activity related to consolidated VIEs/VOEs— — — — — (3)
Transfers into Level 3 (4)— — — — — — 
Transfers out of Level 3 (4)— — — — — — 
Balance, September 30, 2022$17 $1,289 $4,312 $1 $(5,825)$(273)
Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period (6)$(1)$(196)$(364)$— $428 $— 
Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period (6)$— $— $— $— $— $— 
Balance, July 1, 2021$103 $2,026 $5,510 $1 $(8,455)$(38)
Realized and unrealized gains (losses), included in Net income (loss) as:
Investment gains (losses), reported in net investment income1 — — — — — 
Net derivative gains (losses) (1) (5)— (84)344 — (395)— 
Total realized and unrealized gains (losses)1 (84)344 — (395)— 
Other comprehensive income (loss)— — — — — — 
Purchases (2)1 11 31 (1)(108)1 
Sales (3)(91)(16)(16)— 20 — 
Activity related to consolidated VIEs/VOEs1 — — — — (1)
Transfers into Level 3 (4)— — — — — — 
Transfers out of Level 3 (4)— — — — — — 
Balance, September 30, 2021$15 $1,937 $5,869 $— $(8,938)$(38)
Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period (6)$1 $(84)$344 $— $(395)$— 
Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period (6)$— $— $— $— $— $— 



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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

Other Equity Investments (7)GMIB Reinsurance Contract AssetAmounts Due from ReinsurersSeparate Accounts AssetsGMxB Derivative Features LiabilityContingent Payment Arrangement
Balance, January 1, 2022$16 $1,848 $5,815 $1 $(8,525)$(38)
Realized and unrealized gains (losses), included in Net income (loss) as:
Investment gains (losses), reported in net investment income(1)— — — — — 
Net derivative gains (losses) (1)— (535)(1,506)— 2,943 — 
Total realized and unrealized gains (losses)(1)(535)(1,506)— 2,943 — 
Other comprehensive income (loss)— — — — — — 
Purchases (2)8 31 89 — (347)(230)
Sales (3)— (55)(86)— 104 — 
Activity related to consolidated VIEs/VOEs(3)— — — — (5)
Transfers into Level 3 (4)— — — — — — 
Transfers out of Level 3 (4)(3)— — — — — 
Balance, September 30, 2022$17 $1,289 $4,312 $1 $(5,825)$(273)
Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period (6)$(1)$(535)$(1,506)$— $2,943 $— 
Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period (6)$— $— $— $— $— $— 
Balance, January 1, 2021$84 $2,488 $— $1 $(11,131)$(28)
Realized and unrealized gains (losses), included in Net income (loss) as:
Investment gains (losses), reported in net investment income20 — — — — — 
Net derivative gains (losses) (1) (5)— (542)586 — 2,340 — 
Total realized and unrealized gains (losses)20 (542)586 — 2,340 — 
Other comprehensive income (loss)— — — — — — 
Purchases (2)4 32 41 — (348)(7)
Sales (3)(92)(41)(17)— 61 — 
Other— — 5,259 — — — 
Activity related to consolidated VIEs/VOEs(1)— — — — (3)
Transfers into Level 3 (4)— — — — — — 
Transfers out of Level 3 (4)— — — (1)140 — 
Balance, September 30, 2021$15 $1,937 $5,869 $— $(8,938)$(38)
Change in unrealized gains or losses for the period included in earnings for instruments held at the end of the reporting period (6)$2 $(542)$586 $— $2,340 $— 
Change in unrealized gains or losses for the period included in other comprehensive income for instruments held at the end of the reporting period (6)$— $— $— $— $— $— 
______________
(1)For the three and liabilities stillnine months ended September 30, 2022 and 2021, the Company’s non-performance risk impact of $(41) million , $(92) million, $837 million and $(72) million for the GMxB Derivative Features Liability, $8 million ,$5 million, $(66) million and $6 million for the GMIB Reinsurance Contract Asset, and $(16) million, $(19) million, $(93) million and $(7) million for the Amounts due from Reinsurers is recorded through Net derivative gains (losses), respectively.

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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

(2)For the GMIB reinsurance contract asset, Amounts Due from Reinsurers and GMxB derivative features liability, represents attributed fee.
(3)For the GMIB reinsurance contract asset and Amounts Due from Reinsurers, represents recoveries from reinsurers and for GMxB derivative features liability represents benefits paid.
(4)Transfers into/out of the Level 3 classification are reflected at beginning-of-period fair values.
(5)For the nine months ended September 30, 2021, GMxB Derivative Features Liability excludes settlement fees on CS Life reinsurance contract of $45 million.
(6)For instruments held at March 31, 2018as of September 30, 2022 or September 30, 2021, amounts are included in net investment income or net derivative gains (losses) in the consolidated statements of income (loss) or unrealized gains (losses) on investments in the consolidated statements of comprehensive income.
(7)Other Equity Investments include other invested assets.

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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

Quantitative and 2017, respectively:
 Income (Loss) 
 Investment
Gains
(Losses),
Net		 Net Derivative Gains (losses) OCI        
 (in millions)
Level 3 Instruments     
First Quarter of 2018     
Held at March 31, 2018:     
Change in unrealized gains (losses):     
Fixed maturities, available-for-sale:     
Corporate$—
 $—
 $(19)
State and political subdivisions—
 —
 (1)
Asset-backed—
 —
 —
Subtotal$—
 $—
 $(20)
GMIB reinsurance contracts—
 (159) —
Separate Accounts’ assets(1)
7
 —
 —
GMxB derivative features’ liability—
 460
 —
Total$7
 $301
 $(20)
Level 3 Instruments     
First Quarter of 2017     
Held at March 31, 2017:     
Change in unrealized gains (losses):     
Fixed maturities, available-for-sale:     
Corporate$—
 $—
 $45
Commercial mortgage-backed—
 —
 13
Asset-backed—
 —
 5
Subtotal$—
 $—
 $63
GMIB reinsurance contracts—
 (71) —
Separate Accounts’ assets(1)
10
 —
 —
GMxB derivative features’ liability—
 507
 —
Total$10
 $436
 $63

(1)There is an investment expense that offsets this investment gain (loss).

Qualitative Information about Level 3 Fair Value Measurements
The following tables disclose quantitative information about Level 3 fair value measurements by category for assets and liabilities as of March 31, 2018September 30, 2022 and December 31, 2017,2021, respectively.


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Quantitative Information about Level 3 Fair Value Measurements as of September 30, 2022
March 31, 2018

 Fair
Value		 Valuation
Technique		 Significant
Unobservable Input		 Range Weighted Average
 (in millions)  
Assets:         
Investments:         
Fixed maturities, available-for-sale:         
Corporate$52
 Matrix pricing model Spread over the industry-Specific benchmark yield curve 0 - 565 bps 112 bps
 788
 Market comparable 
companies		 EBITDA multiples
Discount rate
Cash flow multiples		 6.2x - 30.7x
7.2% - 17.0%
9.0x - 17.7x		 13x
11.3%
13.1x
Other equity investments38
 Discounted cash flow Earnings Multiple
Discounts factor
Discount years		 10.8x
10.0%
12		  
Separate Accounts’ assets332
 Third party appraisal Capitalization Rate
Exit capitalization Rate
Discount Rate		 4.6%
5.6%
6.6%		  
 1
 Discounted cash flow Spread over U.S. Treasury curve
Discount factor		 228 bps
4.624%		  
GMIB reinsurance contract asset1,734
 Discounted cash flow Lapse Rates
Withdrawal Rates
Utilization Rates
Non-performance risk
Volatility rates - Equity		 1% - 6.27% 0.63% -13.94% 0% - 16% 6 - 14 bps 11%-30%  
Liabilities:         
GMIBNLG3,715
 Discounted cash flow Non-performance risk
Lapse Rates
Withdrawal Rates
Annuitization
NLG Forfeiture Rates
Long-term equity Volatility		 1.0%
0.8% - 26.2%
0.0% - 12.4%
0.0% - 16.0%
0.55% - 2.1%
20.0%		  
Assumed GMIB Reinsurance Contracts173
 Discounted cash flow Lapse Rates
Withdrawal Rates (Age 0-85)
Withdrawal Rates (Age 86+)
Utilization Rates
Non-performance risk
Volatility rates - Equity		 1.1% - 13.3%
0.7% - 22.2%
1.3% - 100%
0% - 30%
1.47%
11%-30%		  
GWBL/GMWB121
 Discounted cash flow Lapse Rates
Withdrawal Rates
Utilization Rates
Volatility rates - Equity		 0.5%-5.7% 0.0%-7.0% 100% after delay 11%-30%  
GIB(36) Discounted cash flow Lapse Rates
Withdrawal Rates
Utilization Rates
Volatility rates - Equity		 0.5%-5.7% 0%-8% 0% - 16% 11%-30%  
GMAB4
 Discounted cash flow Lapse Rates
Volatility rates - Equity		 0.5%-11.0% 11%-30%  

Fair
Value
Valuation
Technique
Significant
Unobservable Input
RangeWeighted Average (2)
(in millions)
Assets:
Investments:
Fixed maturities, AFS:
Corporate$241Matrix pricing modelSpread over Benchmark20 bps - 797 bps174 bps
917Market comparable 
companies
EBITDA multiples
Discount rate
Cash flow multiples
Loan to value
5.7x - 38.5x
5.5% - 41.5%
0.5x - 12.0x
0.0% - 46.7%
14.1x
8.3%
6.4x
26.3%
Trading Securities, at Fair Value52Discounted Cash Flow
Earnings multiple
Discount factor
Discount years
7.3x
10.0%
11
Other equity investments4Market comparable companiesRevenue multiple0.5x - 9.9x2.8x
GMIB reinsurance contract asset1,289Discounted cash flow
Lapse rates
Withdrawal Rates
GMIB Utilization Rates
Non-performance risk
Volatility rates - Equity
Mortality: Ages 0-40
Ages 41-60
Ages 61-115

0.38%-22.66%
0.14%-10.02%
0.04%-60.54%
101 bps - 167 bps
14%-35%
0.01%-0.17%
0.06%-0.52%
0.32%-40.00%
2.92%
1.02%
5.61%
103 bps
25%
3.09%
(same for all ages)
(same for all ages)
Amount Due from Reinsurers4,312Discounted Cash Flow
Lapse rates
Withdrawal Rates
GMIB Utilization Rates
Non-performance risk (bps)
Volatility rates - Equity
Mortality: Ages 0-40
Ages 41-60
Ages 61-115
0.38%-22.66%
0.14%-10.02%
0.04%-60.54%
63 bps
14%-35%
0.01%-0.17%
0.06%-0.52%
0.32%-40.00%


1.93%
1.38%
8.27%
63 bps
25%
2.28%
(same for all ages)
(same for all ages)
Liabilities:


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNotes to Consolidated Financial Statements (Unaudited), Continued
(UNAUDITED)

Fair
Value
Valuation
Technique
Significant
Unobservable Input
RangeWeighted Average (2)
AB Contingent Consideration Payable273Discounted cash flow
Expected revenue growth rates
Discount rate
2.0% - 83.9%
1.9% - 10.4%
11.5%
4.5%
GMIB NLG5,817Discounted cash flow
Non-performance risk
Lapse rates
Withdrawal rates
Annuitization rates
Mortality rates (1):
Ages 0 - 40
Ages 41-60
Ages 61-115
186 bps
0.38%-28.79%
0.14%-10.02%
0.04%-100.00%

0.01%-0.18%
0.07%-0.56%
0.44%-43.60%
186 bps
4.23%
1.27%
6.10%

1.71%
(same for all ages)
(same for all ages)
GWBL/GMWB73Discounted cash flow
Lapse rates
Withdrawal Rates
Utilization Rates

Volatility rates - Equity
Non-performance risk(bps)
0.50%-22.66%
0.00%-8.00%
100% once starting
14%-35%
186 bps
2.92%
1.02%


25%
GIB(64)Discounted cash flow
Lapse rates
Withdrawal Rates
Utilization Rates
Volatility rates - Equity
Non-performance risk(bps)
0.50%-22.66%
0.26%-2.10%
0.04%-100.00%
14% - 35%
186 bps
2.92%
1.02%
5.61%
25%
GMAB(1)Discounted cash flow
Lapse rates
Volatility rates - Equity
Non-performance risk(bps)
0.50%-22.66%
14%-35%
186 bps
2.92%
25%
______________
(1)Mortality rates vary by age and demographic characteristic such as gender. Mortality rate assumptions are based on a combination of company and industry experience. A mortality improvement assumption is also applied. For any given contract, mortality rates vary throughout the period over which cash flows are projected for purposes of valuating the embedded derivatives.
(2)For lapses, withdrawals, and utilizations the rates were weighted by counts; for mortality weighted average rates are shown for all ages combined; and for withdrawals the weighted averages were based on an estimated split of partial withdrawal and dollar-for-dollar withdrawals.
Quantitative Information about Level 3 Fair Value Measurements
as of December 31, 20172021

Fair
Value		Valuation
Technique		Significant
Unobservable Input		RangeWeighted Average (2)
(in millions)
Assets:
Investments:
Fixed maturities, AFS:
Corporate$258 Matrix pricing modelSpread over benchmark20 bps - 270 bps144 bps
888 Market comparable companies
EBITDA multiples
 Discount rate
 Cash flow multiples
Loan to value
4.9x - 62.3x
6.2% - 21.5%
0.5x-10.0x
3.1%-63.4%
13.0x
9.1%
5.5x
30.8%
Trading Securities, at Fair Value65 Discounted cash flow
Earnings multiple
Discounts factor
Discount years
7.3x
10.00%
11
Other equity investments4 Market comparable companiesRevenue multiple7.8x - 10.3x9.5x

  Fair
Value		 Valuation
Technique		 Significant
Unobservable Input		 Range Weighted Average
  (in millions)  
Assets:          
Investments:          
Fixed maturities, available-for-sale:          
Corporate $53
 Matrix pricing model Spread over the industry-specific benchmark yield curve 0 bps-565 bps 125 bps
  789
 Market comparable companies EBITDA multiples
Discount Rate
Cash flow Multiples		 5.3x-27.9x
7.2% - 17.0%
9.0x - 17.7x		 12.9x
11.1%
13.1x
Other equity investments 38
 Discounted cash flow Earnings Multiple
Discounts factor
Discount years		 10.8x 10.0% 12  
Separate Accounts’ assets 326
 Third party appraisal Capitalization Rate
Exit capitalization Rate
Discount Rate		 4.6% 5.6% 6.6%  
  1
 Discounted cash flow Spread over U.S. Treasury curve
Discount factor		 243 bps 4.409%  
GMIB reinsurance contract asset 1,894
 Discounted Cash flow Lapse Rates
Withdrawal Rates
Utilization Rates
Non-performance risk
Volatility rates - Equity		 1.0% - 6.3% 0.0% - 8.0% 0.0% - 16.0% 5bps - 10bps 9.9% - 30.9%  
Liabilities:          
GMIBNLG 4,056
 Discounted cash flow Non-performance risk
Lapse Rates
Withdrawal Rates
Utilization Rates
NLG Forfeiture Rates
Long -term Equity Volatility		 1.0% 0.8% - 26.2% 0.0% - 12.4% 0.0% - 16.0% 0.55% - 2.1% 20.0%  
Assumed GMIB Reinsurance Contracts 194
 Discounted cash flow Lapse Rates
Withdrawal Rates (Age 0-85)
Withdrawal Rates (Age 86+)
Utilization Rates
Non-performance risk
Volatility rates - Equity		 1.1% - 13.3% 0.7% - 22.2% 1.3% - 100%
0 - 30% 1.3% 9.9% - 30.9%		  
GWBL/GMWB 130
 Discounted cash flow Lapse Rates
Withdrawal Rates
Utilization Rates
Volatility rates - Equity		 0.9% - 5.7% 0.0% - 7.0% 100% after delay 9.9% - 30.9%  
GIB (27) Discounted cash flow Lapse Rates
Withdrawal Rates
Utilization Rates
Volatility rates - Equity		 0.9% - 5.7% 0.0% - 7.0% 0.0% - 16.0% 9.9% - 30.9%  
GMAB 5
 Discounted cash flow Lapse Rates
Volatility rates - Equity		 0.5% - 11.0% 9.9% - 30.9%  
53


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNotes to Consolidated Financial Statements (Unaudited), Continued
(UNAUDITED)

Fair
Value		Valuation
Technique		Significant
Unobservable Input		RangeWeighted Average (2)
(in millions)
GMIB reinsurance contract asset1,848 Discounted cash flow
Non-performance risk
Lapse rates
Withdrawal rates
Utilization rates
Volatility rates - Equity
Mortality rates (1):
Ages 0 - 40
Ages 41 - 60
Ages 60 - 115
57 bps - 93 bps
0.45% - 20.86%
0.27% - 8.66%
0.04% - 60.44%
11% - 31%

0.01% - 0.17%
0.06% - 0.53%
0.31% - 40.00%
60 bps
2.65%
0.93%
5.27%
24%

2.79%
(same for all ages)
(same for all ages)
Amount Due from Reinsurers5,813 Discounted Cash Flow
Lapse rates
Withdrawal Rates
GMIB Utilization Rates
Non-performance risk (bps)
Volatility rates - Equity
Mortality: Ages 0-40
Ages 41-60
Ages 61-115

0.45%-20.86%
0.27%-8.66%
0.04%-60.44%
37 bps
11%-31%
0.01%-0.17%
0.06%-0.53%
0.31%-40.00%



1.70%
1.18%
7.20%
37 bps
24%
2.17%
(same for all ages)
(same for all ages)
Liabilities:
AB Contingent Consideration Payable38 Discounted cash flow
Expected revenue growth rates
Discount rate
2.0% - 83.9%
1.9% - 10.4%
11.9%
7.0%
GMIB NLG8,503 Discounted cash flow
Non-performance risk
Lapse rates
Withdrawal rates
Annuitization rates
Mortality rates (1):
Ages 0 - 40
Ages 41 - 60
Ages 60 - 115
111 bps
1.04% - 23.57%
0.27% - 8.66%
0.03% -100.00%

0.01% - 0.19%
0.07% - 0.57%
0.44% - 43.60%
111 bps
3.55%
1.04%
5.24%

1.62%
(same for all ages)
(same for all ages)
GWBL/GMWB99 Discounted cash flow
Non-performance risk
Lapse rates
Withdrawal rates
Utilization rates

Volatility rates - Equity
111 bps
0.60%-20.86%
0.00%-8.00%
100% once starting
11%-31%

2.65%
0.93%


24%
GIB(75)Discounted cash flow
Non-performance risk
Lapse rates
Withdrawal rates
Utilization rates
Volatility rates - Equity
111 bps
0.60%-20.86%
0.13%-8.66%
0.04%-100.00%
11%-31%

2.65%
0.93%
5.27%
24%
GMAB(3)Discounted cash flow
Non-performance risk
Lapse rates
Volatility rates - Equity
111 bps
0.60%-20.86%
11%-31%

2.65%
24%
______________
(1)Mortality rates vary by age and demographic characteristic such as gender. Mortality rate assumptions are based on a combination of company and industry experience. A mortality improvement assumption is also applied. For any given contract, mortality rates vary throughout the period over which cash flows are projected for purposes of valuating the embedded derivatives.
(2)For lapses, withdrawals, and utilizations the rates were weighted by counts; for mortality weighted average rates are shown for all ages combined; and for withdrawals the weighted averages were based on an estimated split of partial withdrawal and dollar-for-dollar withdrawals.

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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

Level 3 Financial Instruments for which Quantitative Inputs are Not Available
Certain Privately Placed Debt Securities with Limited Trading Activity
Excluded from the tables above at March 31, 2018as of September 30, 2022 and December 31, 2017,2021, respectively, are approximately $1,087 million$1.2 billion and $948$635 million of Level 3 fair value measurements of investments for which the underlying quantitative inputs are not developed by the Company and are not readily available. The fair value measurements of these Level 3 investments comprise approximately 47.3% and 44.0% of total assets classified as Level 3 and represent only 0.6% and 0.5% of total assets measured at fair value on a recurring basis at March 31, 2018 and December 31, 2017, respectively. These investments primarily consist of certain privately placed debt securities with limited trading activity, including residential mortgage- and asset-backed instruments, and their fair values generally reflect unadjusted prices obtained from independent valuation service providers and indicative, non-binding quotes obtained from third-party broker-dealers recognized as market participants. Significant increases or decreases in the fair value amounts received from these pricing sources may result in the Company’s reporting significantly higher or lower fair value measurements for these Level 3 investments.
Included in the tables above at March 31, 2018 and December 31, 2017, respectively, are approximately $840 million and $842 million fair value of loans classified as Level 3. •The fair value of private placement securities is determined by application of a matrix pricing model or a market comparable company value technique, representing approximately 67.0% and 73.2% of the total fair value of Level 3 securities in the corporate fixed maturities asset class.technique. The significant unobservable input to the matrix pricing model valuation technique is the spread over the industry-specific benchmark yield curve. Generally, an increase or decrease in spreads would lead to directionally inverse movement in the fair value measurements of these securities. The significant unobservable input to the market comparable company valuation technique is the discount rate. Generally, a significant increase (decrease) in the discount rate would result in significantly lower (higher) fair value measurements of these securities.
•Residential mortgage-backed securities classified as Level 3 primarily consist of non-agency paper with low trading activity. Included in the tables above at March 31, 2018as of September 30, 2022 and December 31, 2017,2021, there were no Level 3 securities that were determined by application of a matrix pricing model and for which the spread over the U.S. Treasury curve is the most significant unobservable input to the pricing result. Generally, a change in spreads would lead to directionally inverse movement in the fair value measurements of these securities.
•Asset-backed securities classified as Level 3 primarily consist of non-agency mortgage loan trust certificates, including subprime and Alt-A paper, credit tenant loans,risk transfer securities, and equipment financings. Included in the tables above at March 31, 2018as of September 30, 2022 and December 31, 2017,2021, there were no securities that were determined by the application of matrix-pricing for which the spread over the U.S. Treasury curve is the most significant unobservable input to the pricing result. Significant increases (decreases) in spreads would resulthave resulted in significantly lower (higher) fair value measurements.
Other Equity Investments
Included in other equity investments classified as Level 3 are reporting entities’ venture capital securities in the Technology, Media and Telecommunications industries. The fair value measurements of these securities include significant unobservable inputs including an enterprise value to revenue multiples and a discount rate to account for liquidity and various risk factors. Significant increases (decreases) in the enterprise value to revenue multiple inputs in isolation would resulthave resulted in a significantly higher (lower) fair value measurement. Significant increases (decreases) in the discount rate would resulthave resulted in a significantly lower (higher) fair value measurement.
Separate Account assets classified as Level 3 in the table at March 31, 2018GMIB Reinsurance Contract Asset, Amounts Due from Reinsurers and December 31, 2017, primarily consist of a private real estate fund with a fair value of approximately $332 million and $326 millionand mortgage loans with fair value of approximately $1 million and $1 million, respectively. A third party appraisal valuation technique is used to measure the fair value of the private real estate investment fund, including consideration of observable replacement cost and sales comparisons for the underlying commercial properties, as well as the results from applying a discounted cash flow approach. Significant increase (decrease) in isolation in the capitalization rate and exit capitalization rate assumptions used in the discounted cash flow approach to the appraisal value would result in a higher (lower) measure of fair value. With respect to the fair value measurement of mortgage loans a discounted cash flow approach is applied, a significant increase (decrease) in the assumed spread over U.S. Treasury securities would produce a lower (higher) fair value measurement. Changes in the discount rate or factor used in the valuation techniques to determine the fair values of these private equity investments and mortgage loans generally are not correlated to changes in the other significant unobservable inputs. Significant increase (decrease) in isolation in the discount rate or factor would result in significantly lower (higher) fair value measurements. The remaining Separate Account investments classified as Level


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

3 excluded from the table consist of mortgage- and asset-backed securities with fair values of approximately $15 million and $9 million at March 31, 2018 and $14 million and $8 million at December 31, 2017, respectively. These fair value measurements are determined using substantially the same valuation techniques as earlier described above for the Company’s General Account investments in these securities.GMxB Derivative Features
Significant unobservable inputs with respect to the fair value measurement of the Level 3 GMIB reinsurance contract asset and the Level 3 liabilities identified in the table above are developed using the Company data. Validations of unobservable inputs are performed to the extent the Company has experience. When an input is changed the model is updated and the results of each step of the model are analyzed for reasonableness.
The significant unobservable inputs used in the fair value measurement of the Company’s GMIB reinsurance contract asset are lapse rates, withdrawal rates, and GMIB utilization rates. Significant increases in GMIB utilization rates or decreases in lapse or withdrawal rates in isolation would tend to increase the GMIB reinsurance contract asset.
Fair value measurement of the GMIB reinsurance contract asset, GMIB NLG Reinsurance and liabilities includes dynamic lapse and GMIB utilization assumptions whereby projected contractual lapses and GMIB utilization reflect the projected net amount of risks of the contract. As the net amount of risk of a contract increases, the assumed lapse rate decreases and the GMIB utilization increases. Increases in volatility would increase the asset and liabilities.
The significant unobservable inputs used in the fair value measurement of the Company’s GMIBNLGGMIB NLG liability and GMIB NLG Reinsurance are lapse rates, withdrawal rates, GMIB utilization rates, adjustment for Non-performancenon-performance risk and NLG forfeiture rates. NLG forfeiture rates are caused by excess withdrawals above the annual GMIB accrual rate that cause the NLG to expire. Significant decreases in lapse rates, NLG forfeiture rates, adjustment for non-performancenon-

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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

performance risk and GMIB utilization rates would tend to increase the GMIBNLGGMIB NLG liability and GMIB NLG Reinsurance, while decreases in withdrawal rates and volatility rates would tend to decrease the GMIBNLG liability.GMIB NLG liability and GMIB NLG Reinsurance.
The significant unobservable inputs used in the fair value measurement of the Company’s GMWB and GWBL liability are lapse rates and withdrawal rates. Significant increases in withdrawal rates or decreases in lapse rates in isolation would tend to increase these liabilities. Increases in volatility would increase these liabilities.
During 2017, AB madeCarrying Value of Financial Instruments Not Otherwise Disclosed in Note 3 and Note 4 of the final contingent consideration payment relatingNotes to its 2014 acquisition and recorded a change in estimate and wrote off the remaining contingent consideration payable relating to its 2010 acquisition. As of March 31, 2018 and December 31, 2017, one acquisition-related contingent consideration liability of $11 million remains relating to AB’s 2016 acquisition, which was valued using a revenue growth rate of 31.0% and a discount rate ranging from 1.4% to 2.3%.
The MLOA contingent payment arrangements associated with the Renewal Rights Agreement (with a fair value of $3 million as of March 31, 2018 is measured using projected premiums from these policies, net of potential surrenders and terminations, and applying a risk-adjusted discount factor (7% at March 31, 2018) to the resulting cash flows.


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Consolidated Financial Statements
The carrying values and fair values at March 31, 2018as of September 30, 2022 and December 31, 20172021 for financial instruments not otherwise disclosed in Note 3 and Note 4 of the Notes to these Consolidated Financial Statements are presented in the table below. Certain financial instruments are exempt from the requirements
Carrying Values and Fair Values for Financial Instruments Not Otherwise Disclosed

 Carrying
Value		Fair Value
 Level 1Level 2Level 3Total
(in millions)
September 30, 2022:
Mortgage loans on real estate$15,688 $— $— $13,946 $13,946 
Policy loans$4,018 $— $— $4,963 $4,963 
Policyholders’ liabilities: Investment contracts$2,023 $— $— $1,838 $1,838 
FHLB funding agreements$7,830 $— $7,709 $— $7,709 
FABN funding agreements$6,613 $— $5,914 $— $5,914 
Short-term and long-term debt (1)$3,840 $— $3,559 $— $3,559 
Separate Accounts liabilities$9,806 $— $— $9,806 $9,806 
December 31, 2021:
Mortgage loans on real estate$14,033 $— $— $14,308 $14,308 
Policy loans$4,024 $— $— $5,050 $5,050 
Policyholders’ liabilities: Investment contracts$2,035 $— $— $2,103 $2,103 
FHLB funding agreements$6,647 $— $6,679 $— $6,679 
FABN funding agreements$6,689 $— $6,626 $— $6,626 
Short-term and long-term debt (1)$3,839 $— $4,544 $— $4,544 
Separate Accounts liabilities$11,620 $— $— $11,620 $11,620 
_____________
(1)As of September 30, 2022 and December 31, 2021 excludes CLO short-term debt of $248 million and $92 million, which is inclusive as fair valued within Notes issued by consolidated VIE’s, at fair value disclosure, such as insurance liabilities other than financial guarantees and investment contracts, limited partnerships accounted for underusing the equity method and pension and other postretirement obligations.fair value option.

 Carrying Value Fair Value
  Level 1 Level 2 Level 3 Total
 (in millions)
March 31, 2018:        
Mortgage loans on real estate$11,333
 $—
 $—
 $11,128
 $11,128
Loans to affiliates885
 —
 885
 —
 885
Policyholders’ liabilities: Investment contracts2,222
 —
 —
 2,283
 2,283
FHLBNY Funding Agreements3,014
 —
 2,962
 —
 2,962
Short term and long-term debt2,373
 —
 2,449
 —
 2,449
Loans from affiliates2,530
 —
 2,530
 —
 2,530
Policy loans3,776
 —
 —
 4,330
 4,330
Separate Account Liabilities7,647
 —
 —
 7,647
 7,647
December 31, 2017:         
Mortgage loans on real estate$10,952
 $—
 $—
 $10,912
 $10,912
Loans to affiliates1,230
 —
 1,230
 —
 1,230
Policyholders’ liabilities: Investment contracts2,224
 —
 —
 2,329
 2,329
FHLBNY Funding Agreements3,014
 —
 3,020
 —
 3,020
Short term and long-term debt2,408
 —
 2,500
 —
 2,500
Loans from affiliates3,622
 —
 3,622
 —
 3,622
Policy loans3,819
 —
 —
 4,754
 4,754
Separate Account Liabilities7,537
 —
 —
 7,537
 7,537
Mortgage Loans on Real Estate
Fair values for commercial and agricultural mortgage loans on real estate are measured by discounting future contractual cash flows to be received on the mortgage loan using interest rates at which loans with similar characteristics and credit quality would be made. The discount rate is derived from takingbased on the appropriate U.S. Treasury rate with a like term to the remaining term of the loan and addingto which a spread reflective of the risk premium associated with the specific loan.loan is added. Fair values for mortgage loans anticipated to be foreclosed and problem mortgage loans are limited to the fair value of the underlying collateral, if lower.
Fair values for the Company’s long-term debt related

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EQUITABLE HOLDINGS, INC.
Notes to real estate joint ventures are determined by a third party appraisal and assessed for reasonableness. The Company’s short-term debt primarily includes commercial paper with short term maturities and book value approximates fair value. The fair values of the Company’s borrowing and lending arrangements with AXA affiliated entities are determined in the same manner as for such transactions with third parties, including matrix pricing models for debt securities and discounted cash flow analysis for mortgage loans.Consolidated Financial Statements (Unaudited), Continued

Policy Loans
The fair value of policy loans is calculated by discounting expected cash flows based upon the U.S. treasuryTreasury yield curve and historical loan repayment patterns.
Fair values for FHLBNY funding agreements are determined from a matrix pricing modelShort-term and are internally assessed for reasonableness. Long-term Debt
The matrix pricing model for FHLBNY funding agreements utilizes an independently sourced U.S. Treasury curve which is separately sourced from the Barclays’ suite of curves.


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Company’s short-term debt primarily includes commercial paper with short-term maturities and carrying value approximates fair value. The fair values for the Company’s association plans contracts, supplementary contracts not involving life contingencies (“SCNILC”),long-term debt are determined by Bloomberg’s evaluated pricing service, which uses direct observations or observed comparables.
FHLB Funding Agreements
The fair values of the Company’s FHLB funding agreements are determined by discounted cash flow analysis based on the indicative funding agreement rates published by the FHLB.
FABN Funding Agreements
The fair values of Equitable Financial’s FABN funding agreements are determined by Bloomberg’s evaluated pricing service, which uses direct observations or observed comparables.
Policyholder Liabilities - Investment Contracts and Separate Accounts Liabilities
The fair values for deferred annuities and certain annuities, which are included in Policyholders’ account balances, and liabilities for investment contracts with fund investments in Separate Accounts, are estimated using projected cash flows discounted at rates reflecting current market rates. Significant unobservable inputs reflected in the cash flows include lapse rates and withdrawal rates. Incremental adjustments may be made to the fair value to reflect non-performance risk. Certain other products such as the Company’s association plans contracts, supplementary contracts not involving life contingencies, Access Accounts and Escrow Shield Plus product reserves are held at book value.

Financial Instruments Exempt from Fair Value Disclosure or Otherwise Not Required to be Disclosed
Exempt from Fair Value Disclosure Requirements
8)    REVENUE RECOGNITIONCertain financial instruments are exempt from the requirements for fair value disclosure, such as insurance liabilities other than financial guarantees and investment contracts, limited partnerships accounted for under the equity method and pension and other postretirement obligations.
Otherwise Not Required to be Included in the Table Above
The Company’s investment in COLI policies are recorded at their cash surrender value and are therefore not required to be included in the table above. See Note 2 Significant Accounting Policies, Revenue Recognition, for descriptions of revenues presented in the table below and subject to contracts with customers determined to be in-scope of the new guidance.Notes to these Consolidated Financial Statements for further description of the Company’s accounting policy related to its investment in COLI policies.
The table below presents the revenues recognized during the three months ended March 31, 2018 and 2017, disaggregated by category:
 Three Months Ended March 31,
 2018 2017
 (in millions)
Investment management, advisory and service fees:   
Base fees$724
 $643
Performance-based fees6
 6
Research services114
 113
Distribution services180
 166
Other revenues:   
Shareholder services20
 18
Other6
 4
Total investment management and service fees$1,050
 $950
    
Other income$112
 $101

9)8)    EMPLOYEE BENEFIT PLANS
AXA Financial and AXA Equitable LifePension Plans
AXAHoldings and Equitable Life sponsors the AXA Equitable 401(k) Plan, a qualified defined contribution plan for eligible employees and financial professionals. The plan provides for both a company contribution and a discretionary profit-sharing contribution. Expenses associated with this 401(k) Plan were $9 million and $7 million in the three months ended March 31, 2018 and 2017, respectively.Financial Retirement Plans
AXA FinancialHoldings sponsors the MONY Life Retirement Income Security Plan for Employees and AXA Equitable LifeFinancial sponsors the AXA Equitable Retirement Plan (the “AXA Equitable Life“Equitable Financial QP”), both of which are frozen qualified defined benefit plans covering eligible employees and financial professionals. These pension plans are non-contributory, and their benefits are generally based on a cash balance formula and/or, for certain participants, years of service and average


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earnings over a specified period in the plans. AXAperiod. Holdings and Equitable Financial and AXA Equitable Life also sponsor certain nonqualified defined benefit plans.
On March 13, 2018,plans, including the Company signed a binding agreement with a third party insurer to purchase two single premium, non-participating group annuity contracts withEquitable Excess Retirement Plan, that provide retirement benefits in excess of the intent of settling certain retiree liabilitiesamount permitted under the MONY Life Retirement Income Security Plan for Employees and the AXA Equitable QP.  Payment of the preliminary contribution amountstax law for the group annuity contracts was funded from plan assets on March 20, 2018, securingqualified plans. Holdings has assumed primary liability for both plans. Equitable Financial remains secondarily liable for its obligations under the third party insurer’s irrevocable assumption of certain benefits obligationsEquitable Financial QP and commitment to issue the group annuity contracts.  The annuity purchase transaction and consequent transfer of approximately $254 million of the plans’ obligations to retirees or 10% of the aggregate pension benefit obligations resulted in a partial settlement of the plans. Following remeasurement of the plans’ assets and obligations on March 20, 2018, as requiredwould recognize such liability in the event Holdings does not perform.

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Table of an accounting settlement, the Company recognized a pre-tax settlement loss of approximately $100 million, largely attributableContents
EQUITABLE HOLDINGS, INC.
Notes to recognition of a pro-rata portion of the plans’ unamortized net actuarial losses accumulated in other comprehensive income.Consolidated Financial Statements (Unaudited), Continued
AB
AB maintains the Profit Sharing Plan for Employees of AB, a tax-qualified retirement plan for U.S. employees. Employer contributions under this plan are discretionary and generally are limited to the amount deductible for Federal income tax purposes.Retirement Plans
AB also maintains a qualified, non-contributory, defined benefit retirement plan covering current and former employees who were employed by AB in the United States prior to October 2, 2000 (the “AB Plan”). Benefits under the AB Plan are based on years of credited service, and average final base salary.salary, and primary Social Security benefits. Service and compensation after December 31, 2008 are not taken into account in determining participants’ retirement benefits.
In the three months ended March 31, 2018, a $5 million cash contribution was made by AB to the AB Plan. Based on the funded status of the AB plan at March 31, 2018, no minimum contribution is required to be made in 2018 under ERISA, as amended by theNet Periodic Pension Act, but management is currently evaluating if it will make contributions for the remainder of 2018.
Funding Policy
The Company’s funding policy for its qualified pension plans is to satisfy its funding obligations each year in an amount not less than the minimum required by the ERISA, as amended by the Pension Act, and not greater than the maximum it can deduct for Federal income tax purposes.


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Expense
Components of certain benefit costsnet periodic pension expense for the CompanyCompany’s plans were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
 (in millions)
Service cost$2 $2 $6 $7 
Interest cost21 13 49 40 
Expected return on assets(40)(40)(119)(116)
Prior Period Svc Cost Amortization(1)1 (2)— 
Actuarial (gain) loss— — 1 1 
Net amortization15 23 55 81 
Impact of settlement— 2 — 2 
Net Periodic Pension Expense$(3)$1 $(10)$15 

Three Months Ended March 31,
 2018 2017
 (in millions)
Net Periodic Pension Expense:   
(Qualified and Non-qualified Plans)   
Service cost$2
 $3
Interest cost25
 26
Expected return on assets(45) (43)
Net amortization29
 32
Partial settlement100
 —
Total$111
 $18
Net Postretirement Benefits Costs:   
Service cost$—
 $—
Interest cost4
 4
Net amortization2
 2
Total$6
 $6
Net Postemployment Benefits Costs:   
Service cost$1
 $1
Interest cost—
 —
Net amortization—
 —
Total$1
 $1

10)    SHARE-BASED COMPENSATION PROGRAMS
AXA and the Company sponsor various share-based compensation plans for eligible employees, financial professionals and non-officer directors of Holdings and its subsidiaries. AB also sponsors its own equity compensation plan for certain of its employees.
Compensation costs for the three months ended March 31, 2018 and 2017 for share-based payment arrangements as further described herein are as follows:
 Three Months Ended
March 31,
 2018 2017
 (in thousands)
Performance Shares$55
 $5,710
Stock Options (Other than AB stock options)114
 19
Restricted Awards12,484
 7,693
Other compensation plans(1)
(904) 293
Total Compensation Expenses$11,749
 $13,715
(1)Other compensation plans include Restricted Stock and Stock Appreciation Rights.


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Performance Shares
Settlement of second tranche of the 2014 Grant in 2018. On March 26, 2018, share distributions totaling approximately $21 million were made to active and former employees of in settlement of 0.8 million Performance Shares earned under the terms of the AXA Performance Share Plan 2014. On April 6, 2018, cash distributions of approximately $6 million were made to active and former financial professionals in settlement of 0.2 million Performance Units earned under the terms of the AXA Advisor Performance Unit Plan 2014.
AB Long-term Incentive Compensation Plans. During the three months ended March 31, 2018 and 2017, respectively, AB purchased 0.1 million and 1.3 million units representing assignments of beneficial ownership of limited partnership interests in AB Holding (“AB Holding Units”) for $2 million and $31 million, respectively (on a trade date basis). There were no open-market purchases during the three months ended March 31, 2018. The three months ended March 31, 2017 amount reflects open-market purchases of 1.2 million AB Holding Units for $28 million, with the remainder relating to purchases of AB Holding Units from employees to allow them to fulfill statutory tax withholding requirements at the time of distribution of long-term incentive compensation awards.
During the three months ended March 31, 2018 and 2017, AB granted to employees and eligible Directors 1.1 million and 1.1 million restricted Holding awards, respectively. In the three months ended March 31, 2018 and 2017, AB used AB Holding Units repurchased during the period and newly issued AB Holding Units to fund the restricted AB Holding Unit awards.
During the three months ended March 31, 2018 and 2017, AB Holding issued 0.2 million and 0.3 million, respectively, upon exercise of options to buy AB Holding Units. AB Holding used the proceeds of $4 million and $5 million, respectively, received from employees as payment in cash for the exercise price to purchase the equivalent number of newly-issued AB Units.

11)9)    INCOME TAXES
Income tax expense for the three and nine months ended March 31, 2018September 30, 2022 and 20172021 was computed using an estimated annual effective tax rate (“ETR”)., with discrete items recognized in the period in which they occur. The estimated ETR is revised, as necessary, at the end of successive interim reporting periods.
10)    EQUITY
Preferred Stock
Preferred stock authorized, issued and outstanding was as follows:
September 30, 2022December 31, 2021
SeriesShares AuthorizedShares
 Issued		Shares OutstandingShares AuthorizedShares
 Issued		Shares Outstanding
Series A32,000 32,000 32,000 32,000 32,000 32,000 
Series B20,000 20,000 20,000 20,000 20,000 20,000 
Series C12,000 12,000 12,000 12,000 12,000 12,000 
Total64,000 64,000 64,000 64,000 64,000 64,000 

Dividends declared per share were as follows for the periods indicated:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Series A dividends declared$328 $328 $984 $984 
Series B dividends declared$— $— $619 $619 
Series C dividends declared$269 $269 $806 $738 
Common Stock
Dividends declared per share of common stock were as follows for the periods indicated:

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EQUITABLE HOLDINGS, INC.
Notes to Consolidated Financial Statements (Unaudited), Continued

Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Dividends declared$0.20 $0.18 $0.58 $0.53 

Share Repurchase

On February 9, 2022, the Company’s Board of Directors authorized a new $1.2 billion share repurchase program. Under this program, the Company may, from time to time purchase shares of its common stock through various means. The Company adopted revised goodwill impairment guidancemay choose to suspend or discontinue the repurchase program at any time. The repurchase program does not obligate the Company to purchase any particular number of shares. As of September 30, 2022, Holdings had authorized capacity of approximately $578 million remaining in its share repurchase program.
Holdings repurchased a total of 7.0 million, 15.6 million, 23.2 million and 38.2 million shares of its common stock at an average price of $28.67, $29.50, $30.17, and $30.56 per share, respectively through open market repurchases, ASRs and privately negotiated transactions during the first quarterthree and nine months ended September 30, 2022 and 2021.
Holdings purchased 4.7 million and 0 shares of 2017. Income tax expense forits common stock through open market purchases in the three months ended March 31, 2017 includesSeptember 30, 2022 and 2021. During the nine months ended September 30, 2022 and 2021, Holdings repurchased 12.6 million and 3.2 million shares of its common stock through open market repurchases.
In April 2022, Holdings entered into an expenseASR with a third-party financial institution to repurchase an aggregate of $129$100 million relatedof Holdings’ common stock. Pursuant to the impairmentASR, Holdings made a prepayment of non-deductible goodwill.

12)    RELATED PARTY TRANSACTIONS
The Company participates in certain cost sharing and service agreements with AXA and other non-consolidated affiliates, including technology, professional development and investment management agreements. The costs related to the cost sharing and service agreements are allocated based on methods that management believes are reasonable, including a review of the nature of such costs and the activities performed to support each company. There have been no material changes in these service agreements from those disclosed in the 2017 annual financial statements.
In October 2012, AXA Financial issued a note denominated in Euros in the amount of €300 million or $391 million to AXA Belgium S.A. (“AXA Belgium”). This note had an interest rate of Europe Interbank Offered Rate (“EURIBOR”) plus 1.15% and a maturity date of October 23, 2017. Concurrently, AXA Financial entered into a swap with AXA covering the exchange rate on both the interest and principal payments related to this note. The interest rate on the swap was 6-month LIBOR plus 1.475%. In October 2017, the note was extended to March 30, 2018. The extended note has a floating interest rate of 1-month EURIBOR plus 0.06% with a minimum rate of 0%. Concurrently, AXA Financial entered into a swap with AXA covering the exchange rate on both the interest and principal payments related to the extended note until March 30, 2018. Both the loan and the swap were repaid on March 29, 2018.
In 2017, Holdings repaid a $56 million 1.39% loan from AXA America Corporate Solutions, Inc. (“AXA CS”) originally made in 2015. In 2017, Holdings received a $100 million and $10initially received 2.6 million loan from AXA CS.shares. The loans had interest rates of 1.86% and 1.76%, respectively, and were repaid on their maturity date of February 5, 2018.
Holdings formerly held 78.99% of theASR terminated during April 2022, at which time 684,700 additional shares of AXA CS, which holds certain AXA U.S. P&C business. AXA CS and its subsidiaries have been excluded fromcommon stock were received.
In May 2022, Holdings entered into an ASR with a third-party financial institution to repurchase an aggregate of $150 million of Holdings’ common stock. Pursuant to the historical Consolidated Financial Statements since they were operated independently from the otherASR, Holdings subsidiaries. In March 2018, the legal transfermade a prepayment of the AXA CS shares to AXA was executed for $630$150 million and is presented as an increase to Total equity attributable to Holdings. To anticipate this transfer, in the fourth quarterinitially received 4.3 million shares. The ASR terminated during July 2022, at which time 1.2 million additional shares of 2017, AXA made a short-term loan of $622 million, 3-month LIBOR plus 0.439%


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

margin to Holdings (the “$622 Million Loan”). Holdings’ repayment obligation to AXA in respect of this loan was set off against AXA’s payment obligation to Holdings with respect to the transfer of AXA CS shares, and AXA paid Holdings the $8 million balance in cash.common stock were received.
In September 2007, AXA2022, Holdings entered into an ASR contract with a third-party financial institution to repurchase an aggregate of $37.5 million of Holdings’ common stock. Pursuant to the ASR, Holdings made a prepayment of $37.5 million and received a $700initial delivery of 1.1 million 5.40% Senior Unsecured Note from AXA Equitable.shares. The note pays interest semi-annually and wasASR is scheduled to matureterminate on September 30, 2012. In March 2011,November 4, 2022, at which time additional shares may be delivered or returned depending on the maturity date of the note was extended to December 30, 2020 and the interest rate was increased to 5.70%. In January 2018, AXA pre-paid $50 million of the $700 million note.
In December 2008, AXA received a $500 million term loan from AXA Financial. In December 2014, AXA repaid $300 million on this term loan to AXA Financial plus accrued interest. This term loan has an interest rate of 5.40% payable semi-annually with a maturity date of December 15, 2020. In January 2018, AXA pre-paid $150 million of the $500 million term loan.
In December 2013, Colisée Re issued a $145 million 4.75% Senior Unsecured Note to Holdings. The loan was scheduled to mature on December 19, 2028. This loan was repaid on March 26, 2018.
In March 2018, AXA Equitable Life sold its interest in two consolidated real estate joint ventures to AXA France for a total purchasedaily volume weighted average price of approximately $143 million, which resulted in a pre-tax loss of $0.2 million and the reduction of $203 million of long-term debt on the Company’s balance sheet for the first quarter of 2018.Holdings’ common stock.
In March 2018, AXA contributed the 0.5% noncontrolling interest in AXA Financial to Holdings, reflected as a $66 million capital contribution, resulting in AXA Financial being 100% owned by Holdings.

13)    ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)Accumulated Other Comprehensive Income (Loss)
AOCI represents cumulative gains (losses) on items that are not reflected in Netnet income (loss). The balances as of MarchSeptember 30, 2022 and December 31, 2018 and 20172021 follow:
 September 30,December 31,
 20222021
 (in millions)
Unrealized gains (losses) on investments$(7,210)$2,684 
Defined benefit pension plans(608)(669)
Foreign currency translation adjustments(120)(45)
Total accumulated other comprehensive income (loss)(7,938)1,970 
Less: Accumulated other comprehensive income (loss) attributable to noncontrolling interest(62)(34)
Accumulated other comprehensive income (loss) attributable to Holdings$(7,876)$2,004 
 March 31,
 2018 2017
 (in millions)
Unrealized gains (losses) on investments$(130) $244
Foreign currency translation adjustments(40) (69)
Defined benefit pension plans(822) (1,030)
Total accumulated other comprehensive income (loss)(992) (855)
Less: Accumulated other comprehensive (income) loss attributable to noncontrolling interest46
 64
Accumulated other comprehensive income (loss) attributable to Holdings$(946) $(791)





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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNotes to Consolidated Financial Statements (Unaudited), Continued
(UNAUDITED)

The components of OCI, net of taxes for the three and nine months ended March 31, 2018September 30, 2022 and 20172021 follow:

Three Months Ended September 30,

Nine Months Ended September 30,
Three Months Ended March 31, 2022202120222021
2018 2017 (in millions)
(in millions)
Foreign currency translation adjustments:   
Foreign currency translation gains (losses) arising during the period$(5) $8
(Gains) losses reclassified into net income (loss) during the period—
 —
Foreign currency translation adjustment(5) 8
Net unrealized gains (losses) on investments:   
Change in net unrealized gains (losses) on investments:Change in net unrealized gains (losses) on investments:
Net unrealized gains (losses) arising during the period(86) 155
Net unrealized gains (losses) arising during the period$(3,195)$(310)$(12,929)$(2,547)
(Gains) losses reclassified into net income (loss) during the period(1)
(1,223) (23)(Gains) losses reclassified into net income (loss) during the period (1)245 (131)678 (617)
Net unrealized gains (losses) on investments(1,309) 132
Net unrealized gains (losses) on investments(2,950)(441)(12,251)(3,164)
Adjustments for policyholders’ liabilities, DAC, insurance liability loss recognition and other349
 (28)Adjustments for policyholders’ liabilities, DAC, insurance liability loss recognition and other624 318 2,357 1,108 
Change in unrealized gains (losses), net of adjustments (net of deferred income tax expense (benefit) of $(255) and $56)(960) 104
Change in unrealized gains (losses), net of adjustments (net of deferred income tax expense (benefit) of $(619), $(32), $(2,630) and $(546))Change in unrealized gains (losses), net of adjustments (net of deferred income tax expense (benefit) of $(619), $(32), $(2,630) and $(546))(2,326)(123)(9,894)(2,056)
Change in defined benefit plans:   Change in defined benefit plans:
Less: reclassification adjustments to net income (loss) for:   
Amortization of net actuarial (gains) losses included in:   
Amortization of net prior service cost included in net periodic cost133
 25
Change in defined benefit plans (net of deferred income tax expense (benefit) of $35 and $12)133
 25
Reclassification to Net income (loss) of amortization of net prior service credit included in net periodic costReclassification to Net income (loss) of amortization of net prior service credit included in net periodic cost16 22 61 77 
Change in defined benefit plans (net of deferred income tax expense (benefit) of $(4), $6, $(13), and $20)Change in defined benefit plans (net of deferred income tax expense (benefit) of $(4), $6, $(13), and $20)16 22 61 77 
Foreign currency translation adjustments:Foreign currency translation adjustments:
Foreign currency translation gains (losses) arising during the periodForeign currency translation gains (losses) arising during the period(30)(9)(75)(13)
Foreign currency translation adjustmentForeign currency translation adjustment(30)(9)(75)(13)
Total other comprehensive income (loss), net of income taxes(832) 137
Total other comprehensive income (loss), net of income taxes(2,340)(110)(9,908)(1,992)
Less: Other comprehensive (income) loss attributable to noncontrolling interest(6) (7)
Less: Other comprehensive income (loss) attributable to noncontrolling interestLess: Other comprehensive income (loss) attributable to noncontrolling interest(12)(3)(28)(5)
Other comprehensive income (loss) attributable to Holdings$(838) $130
Other comprehensive income (loss) attributable to Holdings$(2,328)$(107)$(9,880)$(1,987)
(1)See “Reclassification adjustments” in Note 3. Reclassification amounts presented net of income tax expense (benefit) of $(325) million and $(13) million, for the three months ended March 31, 2018 and 2017, respectively.

_______________
(1)See “Reclassification adjustment” in Note 3 of the Notes to these Consolidated Financial Statements. Reclassification amounts presented net of income tax expense (benefit) of $(65) million, $35 million, $(180) million, and $164 million for the three and nine months ended September 30, 2022 and 2021, respectively.
Investment gains and losses reclassified from AOCI to net income (loss) primarily consist of realized gains (losses) on sales and OTTIcredit losses of AFS securities and are included in Totaltotal investment gains (losses), net on the consolidated statements of income (loss). Amounts reclassified from AOCI to net income (loss) as related to defined benefit plans primarily consist of amortizationsamortization of net (gains) losses and net prior service cost (credit) recognized as a component of net periodic cost and reported in Compensationcompensation and benefit expensesbenefits in the consolidated statements of income (loss). Amounts presented in the table above are net of tax.

11)    REDEEMABLE NONCONTROLLING INTEREST
14)The changes in the components of redeemable noncontrolling interests are presented in the table that follows:
Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
(in millions)
Balance, beginning of period$348 $42 $468 $143 
Net earnings (loss) attributable to redeemable noncontrolling interests(9)— (65)4 
Purchase/change of redeemable noncontrolling interests15 101 (49)(4)
Balance, end of period$354 $143 $354 $143 

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Notes to Consolidated Financial Statements (Unaudited), Continued

12)    COMMITMENTS AND CONTINGENT LIABILITIES
Litigation and Regulatory Matters
Litigation, regulatory and other loss contingencies arise in the ordinary course of the Company’s activities as a diversified financial services firm. The Company is a defendant in a number of litigation matters arising from the conduct of its business. In some of these matters, claimants seek to recover very large or indeterminate amounts, including compensatory, punitive, treble and exemplary damages. Modern pleading practice in the U.S. permits considerable


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

variation in the assertion of monetary damages and other relief. Claimants are not always required to specify the monetary damages they seek, or they may be required only to state an amount sufficient to meet a court’s jurisdictional requirements. Moreover, some jurisdictions allow claimants to allege monetary damages that far exceed any reasonably possible verdict. The variability in pleading requirements and past experience demonstrates that the monetary and other relief that may be requested in a lawsuit or claim often bears little relevance to the merits or potential value of a claim. Litigation against the Company includes a variety of claims including, among other things, insurers’ sales practices, alleged agent misconduct, alleged failure to properly supervise agents, contract administration, product design, features and accompanying disclosure, cost of insurance increases, the use of captive reinsurers, payments of death benefits and the reporting and escheatment of unclaimed property, alleged breach of fiduciary duties, alleged mismanagement of client funds and other matters.
As with other financial services companies, the Company periodically receives informal and formal requests for information from various state and federal governmental agencies and self-regulatory organizations in connection with inquiries and investigations of the products and practices of the Company or the financial services industry. It is the practice of the Company to cooperate fully in these matters.
The outcome of a litigation or regulatory matter is difficult to predict, and the amount or range of potential losses associated with these or other loss contingencies requires significant management judgment. It is not possible to predict the ultimate outcome or to provide reasonably possible losses or ranges of losses for all pending regulatory matters, litigation and other loss contingencies. While it is possible that an adverse outcome in certain cases could have a material adverse effect upon the Company’s financial position, based on information currently known, management believes that neither the outcome of pending litigation and regulatory matters, nor potential liabilities associated with other loss contingencies, are likely to have such an effect. However, given the large and indeterminate amounts sought in certain litigation and the inherent unpredictability of all such matters, it is possible that an adverse outcome in certain of the Company’s litigation or regulatory matters, or liabilities arising from other loss contingencies, could, from time to time, have a material adverse effect upon the Company’s results of operations or cash flows in a particular quarterly or annual period.
For some matters, the Company is able to estimate a possible range of loss. For such matters in which a loss is probable, an accrual has been made. For matters where the Company however, believes a loss is reasonably possible, but not probable, no accrual is required. For matters for which an accrual has been made, but there remains a reasonably possible range of loss in excess of the amounts accrued or for matters where no accrual is required, the Company develops an estimate of the unaccrued amounts of the reasonably possible range of losses. As of March 31, 2018,September 30, 2022, the Company estimates the aggregate range of reasonably possible losses, in excess of any amounts accrued for these matters as of such date, to be up to approximately $90$250 million.
For other matters, the Company is currently not able to estimate the reasonably possible loss or range of loss. The Company is often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from plaintiffs and other parties, investigation of factual allegations, rulings by a court on motions or appeals, analysis by experts and the progress of settlement discussions. On a quarterly and annual basis, the Company reviews relevant information with respect to litigation and regulatory contingencies and updates the Company’s accruals, disclosures and reasonably possible losses or ranges of loss based on such reviews.
In July 2011, a derivative action was filed in the United States District Court for the District of New Jersey entitled Mary Ann Sivolella v. AXA Equitable Life Insurance Company and AXA Equitable Funds Management Group, LLC (“Sivolella Litigation”) and a substantially similar action was filed in January 2013 entitled Sanford et al. v. AXA Equitable FMG (“Sanford Litigation”). These lawsuits were filed on behalf of a total of twelve mutual funds and, among other things, seek recovery under (i) Section 36(b) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), for alleged excessive fees paid to AXA Equitable Life and AXA Equitable FMG for investment management services and administrative services and (ii) a variety of other theories including unjust enrichment. The Sivolella Litigation and the Sanford Litigation were consolidated and a 25-day trial commenced in January 2016 and concluded in February 2016. In August 2016, the District Court issued its decision in favor of AXA Equitable Life and AXA Equitable FMG, finding that the plaintiffs had failed to meet their burden to demonstrate that


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

AXA Equitable Life and AXA Equitable FMG breached their fiduciary duty in violation of Section 36(b) of the Investment Company Act or show any actual damages. In September 2016, the plaintiffs filed a motion to amend the District Court’s trial opinion and to amend or make new findings of fact and/or conclusions of law. In December 2016, the District Court issued an order denying the motion to amend and plaintiffs filed a notice to appeal the District Court’s decision to the U.S. Court of Appeals for the Third Circuit. We are vigorously defending this matter.
In April 2014, a lawsuit was filed in the United States District Court for the Southern District of New York, now entitled Ross v. AXA Equitable Life Insurance Company. The lawsuit is a putative class action on behalf of all persons and entities that, between 2011 and March 11, 2014, directly or indirectly, purchased, renewed or paid premiums on life insurance policies issued by AXA Equitable Life (the “Policies”). The complaint alleges that AXA Equitable Life did not disclose in its New York statutory annual statements or elsewhere that the collateral for certain reinsurance transactions with affiliated reinsurance companies was supported by parental guarantees, an omission that allegedly caused AXA Equitable Life to misrepresent its “financial condition” and “legal reserve system.” The lawsuit seeks recovery under Section 4226 of the New York Insurance Law of all premiums paid by the class for the Policies during the relevant period. In July 2015, the Court granted AXA Equitable Life’s motion to dismiss for lack of subject matter jurisdiction. In April 2015, a second action in the United States District Court for the Southern District of New York was filed on behalf of a putative class of variable annuity holders with “Guaranteed Benefits Insurance Riders,” entitled Calvin W. Yarbrough, on behalf of himself and all others similarly situated v. AXA Equitable Life Insurance Company. The new action covers the same class period, makes substantially the same allegations, and seeks the same relief as the Ross action. In October 2015, the Court, on its own, dismissed the Yarbrough litigation on similar grounds as the Ross litigation. In December 2015, the Second Circuit denied the plaintiffs motion to consolidate their appeals but ordered that the appeals be heard together before a single panel of judges. In February 2017, the Second Circuit affirmed the decisions of the district court in favor of AXA Equitable Life, and that decision is now final because the plaintiffs failed to file a further appeal.
In November 2014, a lawsuit was filed in the Superior Court of New Jersey, Camden County entitled Arlene Shuster, on behalf of herself and all others similarly situated v. AXA Equitable Life Insurance Company. This lawsuit is a putative class action on behalf of all AXA Equitable Life variable life insurance policyholders who allocated funds from their policy accounts to investments in AXA Equitable Life’s Separate Accounts, which were subsequently subjected to the volatility management strategy and who suffered injury as a result thereof. The action asserts that AXA Equitable Life breached its variable life insurance contracts by implementing the volatility management strategy. In February 2016, the Court dismissed the complaint. In March 2016, the plaintiff filed a notice of appeal. In April 2018, the Superior Court of New Jersey Appellate Division affirmed the trial court’s decision. In August 2015, another lawsuit was filed in Connecticut Superior Court Judicial Division of New Haven entitled Richard T. O’Donnell, on behalf of himself and all others similarly situated v. AXA Equitable Life Insurance Company. This lawsuit iswas a putative class action on behalf of all persons who purchased variable annuities from AXA Equitable Life,Financial, in which were subsequently subjected to the volatility management strategytool was subsequently implemented and who claimed to have suffered injury as a result thereof. Plaintiff assertsasserted a claim for breach of contract alleging that AXA Equitable LifeFinancial implemented the volatility management strategy in violation of applicable law. In November 2015, the Connecticut Federal District Court transferredSeptember 2022, this action to the United States District Court for the Southern District of New York. In March 2017, the Southern District of New York granted AXA Equitable Life’s motion to dismiss the complaint. In April 2017, the plaintiff filed a notice of appeal. In April 2018, the United States Court of Appeals for the Second Circuit reversed the trial court’s decisionlawsuit was withdrawn with instructions to remand the case to Connecticut state court. We are vigorously defending these matters.prejudice.
In February 2016, a lawsuit was filed in the United States District Court for the Southern District of New York entitled Brach Family Foundation, Inc. v. AXA Equitable Life Insurance Company. This lawsuit is a putative class action brought on behalf of all owners of universal life UL policies subject to AXA Equitable Life’sFinancial’s COI rate increase. In early 2016, AXA Equitable LifeFinancial raised COI rates for certain UL policies issued between 2004 and 2007,2008, which had both issue ages 70 and above and a current face value amount of $1 million and above. In March 2018, plaintiffA second putative class action was filed in the District of Arizona in 2017 and consolidated with the Brach matter in federal court in New York. The consolidated amended itsclass action complaint
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Notes to add two new plaintiffs, including the individual Malcolm Currie. The current complaint Consolidated Financial Statements (Unaudited), Continued

alleges the following claims: breach of contract; misrepresentations by AXA in violation of Section 4226 of the New York Insurance Law; violations of New York General Business Law Section 349; and violations of the California Unfair Competition Law, and the California Elder Abuse Statute. Plaintiffs seekseek: (a) compensatory damages, costs, and, pre- and post-judgment interest,interest; (b) with


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

respect to their claim concerning Section 4226, a penalty in the amount of premiums paid by the plaintiffs and the putative class,class; and (c) injunctive relief and attorneys’ fees in connection with their statutory claims. Seven individualIn August 2020, the federal district court issued a decision certifying nationwide breach of contract and Section 4226 classes, and a New York State Section 349 class. Owners of a substantial number of policies opted out of the Brach class action. Most opt-out policies are not yet the subject of litigation. Others filed suit previously including three federal actions challengingthat have been coordinated with the COI increase are also pending against AXA Equitable Life in federal or state courts. TheyBrach action and contain similar allegations as those in Brach as well asalong with additional allegations for violations of various states’state consumer protection statutes and common law fraud. PursuantIn March 2022, the federal district court issued a summary judgment decision, denying in significant part but granting in part Equitable Financial’s motion and denying the motion filed by plaintiffs in the coordinated actions. In July 2022, the federal district court granted Equitable Financial’s motion to an October 2017 order,reconsider its summary judgment decision in part and granted summary judgment as to a portion of the putativeSection 4226 class. The federal district court also agreed to consider whether it should decertify the Section 4226 class and set a briefing schedule. Equitable Financial has commenced settlement discussions with the Brach class action plaintiffs and plaintiffs in the fourcoordinated actions. No assurances can be given about the outcome of those settlement discussions. Equitable Financial has settled actual and threatened litigations challenging the COI increase by individual federalpolicyowners and one entity that invested in numerous policies purchased in the life settlement market. Two actions are consolidatedalso pending against Equitable Financial in New York state court. In July 2022, the trial court in one of the New York state court actions, Hobish v. AXA Equitable Life Insurance Company, granted in significant part Equitable Financial’s motion for the purposessummary judgment and denied plaintiff’s cross motion. That plaintiff filed a notice of coordinating pre-trial activities. We are in various stagesappeal and Equitable filed a notice of motion practice, and arecross-appeal. Equitable Financial is vigorously defending each of these matters.
RestructuringAs with other financial services companies, Equitable Financial periodically receives informal and formal requests for information from various state and federal governmental agencies and self-regulatory organizations in connection with inquiries and investigations of the products and practices of the Company or the financial services industry. It is the practice of the Company to cooperate fully in these matters. In July 2022, the SEC issued an order with findings that daily separate account and portfolio operating expenses disclosed in customer prospectuses for the EQUI-VEST variable annuity product and incorporated in the calculation of net investment portfolio results in EQUI-VEST quarterly account statements were not properly presented or referenced in those account statements. The Company neither admitted nor denied the findings but agreed to prospectively modify the relevant account statements and cross-reference the relevant prospectus disclosures, and pay a civil monetary penalty of $50 million, to be distributed to plan participants. The Company has fully accrued for the cost of the settlement and its implementation.
Obligations under Funding Agreements
Pre-Capitalized Trust Securities (“P-Caps”)
In April 2019, pursuant to separate Purchase Agreements among Holdings, Credit Suisse Securities (USA) LLC, as representative of the several initial purchasers, and the Trusts (as defined below), Pine Street Trust I, a Delaware statutory trust (the “2029 Trust”), completed the issuance and sale of 600,000 of its Pre-Capitalized Trust Securities redeemable February 15, 2029 (the “2029 P-Caps”) for an aggregate purchase price of $600 million and Pine Street Trust II, a Delaware statutory trust (the “2049 Trust” and, together with the 2029 Trust, the “Trusts”), completed the issuance and sale of 400,000 of its Pre-Capitalized Trust Securities redeemable February 15, 2049 (the “2049 P-Caps” and, together with the 2029 P-Caps, the “P-Caps”) for an aggregate purchase price of $400 million in each case to qualified institutional buyers in reliance on Rule 144A that are also “qualified purchasers” for purposes of Section 3(c)(7) of the Investment Company Act of 1940, as amended.
The restructuringP-Caps are an off-balance sheet contingent funding arrangement that, upon Holdings’ election, gives Holdings the right over a ten-year period (in the case of the 2029 Trust) or over a thirty-year period (in the case of the 2049 Trust) to issue senior notes to these Trusts. The Trusts each invested the proceeds from the sale of their P-Caps in separate portfolios of principal and/or interest strips of U.S. Treasury securities. In return, Holdings will pay a semi-annual facility fee to the 2029 Trust and 2049 Trust calculated at a rate of 2.125% and 2.715% per annum, respectively, which will be applied to the unexercised portion of the contingent funding arrangement and Holdings will reimburse the Trusts for certain expenses. The facility fees are recorded in Other operating costs and liabilities associated withexpenses in the Company’s initiatives were as follows:Consolidated Statements of Income (Loss).
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Notes to Consolidated Financial Statements (Unaudited), Continued

 Three Months Ended March 31, Twelve Months Ended December 31,
 2018 2017
 (in millions)
Severance   
Balance, beginning of year$23
 $22
Additions7
 17
Cash payments(3) (14)
Other reductions—
 (2)
Balance, end of Year$27
 $23
 Three Months Ended March 31, Twelve Months Ended December 31,
 2018 2017
 (in millions)
Leases   
Balance, beginning of year$165
 $170
Expense incurred—
 29
Deferred rent2
 10
Payments made(11) (48)
Interest accretion1
 4
Balance, end of year$157
 $165
Obligation under funding agreementsFederal Home Loan Bank (“FHLB”)
As a member of the FHLBNY, AXAFHLB, Equitable LifeFinancial has access to collateralized borrowings. It also may issue funding agreements to the FHLBNY.FHLB. Both the collateralized borrowings and funding agreements would require AXA Equitable LifeFinancial to pledge qualified mortgage-backed assets and/or government securities as collateral. AXA Equitable LifeFinancial issues short-term funding agreements to the FHLBNYFHLB and uses the funds for asset, liability, and cash management purposes. AXA Equitable LifeFinancial issues long-term funding agreements to the FHLBNYFHLB and uses the funds for spread lending purposes.
Entering into FHLB membership, borrowings and funding agreements requires the ownership of FHLB stock and the pledge of assets as collateral. Equitable Financial has purchased FHLB stock of $364 million and pledged collateral with a carrying value of $11.0 billion as of September 30, 2022.
Funding agreements are reported in policyholders’ account balances in the consolidated balance sheets. For other instruments used for asset asset/liability and cash management purposes, see “Derivative and offsetting assets and


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

liabilities” included in Note 3.4 of the Notes to these Consolidated Financial Statements. The table below summarizes the Company’s activity of funding agreements with the FHLB.
Change in FHLB Funding Agreements during the Nine Months Ended September 30, 2022
Outstanding Balance at December 31, 2021Issued During the PeriodRepaid During the PeriodLong-term Agreements Maturing Within One YearLong-term Agreements Maturing Within Five YearsOutstanding Balance at September 30, 2022
(in millions)
Short-term funding agreements:
Due in one year or less$5,353 $40,964 $(41,132)$153 $— $5,338 
Long-term funding agreements:
Due in years two through five1,290 647 — (153)— 1,784 
Due in more than five years— 705 — — — 705 
Total long-term funding agreements1,290 1,352 — (153)— 2,489 
Total funding agreements (1)$6,643 $42,316 $(41,132)$— $— $7,827 
_____________
(1)The $4 million and $4 million difference between the funding agreements carrying value shown in fair value table for September 30, 2022 and December 31, 2021, respectively, reflects the remaining amortization of a hedge implemented and closed, which locked in the funding agreements borrowing rates.
Funding Agreement-Backed Notes Program (“FABN”)
Under the FABN program, Equitable Financial may issue funding agreements in U.S. dollar or other foreign currencies to a Delaware special purpose statutory trust (the “Trust”) in exchange for the proceeds from issuances of fixed and floating rate medium-term marketable notes issued by the Trust from time to time (the “Trust Notes”). The funding agreements have matching interest, maturity and currency payment terms to the applicable Trust Notes. The Company hedges the foreign currency exposure of foreign currency denominated funding agreements using cross currency swaps as discussed in Note 4 of the Notes to these Consolidated Financial Statements. As of September 30, 2022, the maximum aggregate principal amount of Trust Notes permitted to be outstanding at any one time is $10 billion. Funding agreements issued to the Trust, including any foreign currency transaction adjustments, are reported in Policyholders’policyholders’ account balances in the consolidated balance sheets. Foreign currency transaction adjustments to policyholder’s account balances are recognized in net income (loss) as an adjustment to interest credited to policyholders’ account balances and are offset in interest credited to policyholders’ account balances by a release of AOCI from deferred changes in fair value of designated and qualifying cross currency swap cash flow hedges. The table below summarizes Equitable Financial’s activity of funding agreements under the FABN program.
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Notes to Consolidated Financial Statements (Unaudited), Continued

 Outstanding balance at end of period Maturity of Outstanding balance Issued during the period Repaid during the period
March 31, 2018:(in millions)
Short-term FHLBNY funding agreements$500
 less than one month $1,500
 $1,500
Long-term FHLBNY funding agreements1,417
 less than 4 years —
 —
 204
 Less than 5 years —
 —
 879
 greater than five years —
 —
Total long-term funding agreements2,500
   —
 —
Total FHLBNY funding agreements at March 31, 2018$3,000
   $1,500
 $1,500
December 31, 2017:       
Short-term FHLBNY funding agreements$500
 Less than one month $6,000
 $6,000
Long-term FHLBNY funding agreements1,244
 Less than 4 years 324
 —
 377
 Less than 5 years 303
 —
 879
 Greater than five years 135
 —
Total long-term funding agreements2,500
   762
 —
Total FHLBNY funding agreements at December 31, 2017$3,000
   $6,762
 $6,000
Change in FABN Funding Agreements during the Nine Months Ended September 30, 2022
Letters
Outstanding Balance at December 31, 2021Issued During the PeriodRepaid During the PeriodLong-term Agreements Maturing Within One YearLong-term Agreements Maturing Within Five YearsForeign Currency Transaction AdjustmentOutstanding Balance at September 30,
2022
(in millions)
Short-term funding agreements:
Due in one year or less$— $— $— $1,000 $— $— $1,000 
Long-term funding agreements:
Due in years two through five4,600 — — (1,000)500 — 4,100 
Due in more than five years2,119 — — — (500)(79)1,540 
Total long-term funding agreements6,719 — — (1,000)— (79)5,640 
Total funding agreements (1)$6,719 $— $— $— $— $(79)$6,640 
_____________
(1)The $28 million and $70 million difference between the funding agreements notional value shown and carrying value table as of CreditSeptember 30, 2022 and December 31, 2021, respectively, reflects the remaining amortization of the issuance cost of the funding agreements and the foreign currency transaction adjustment.
Holdings had $4,489 million of undrawn letters of credit issued in favor of third party beneficiaries, including $4,260 million at AXA Arizona RE relating to reinsurance assumed from AXA Equitable Life, USFL and MLOA at March 31, 2018.Revolving Credit Facility
Credit Facilities and Notes
All existing credit facilities at December 31, 2017 with AXA or guaranteed by AXA have been terminated prior to the IPO settlement. In February 2018, Holdings entered into the following credit facilities: (i) a $3.9 billion two-year senior unsecured delayed draw term loan agreement; (ii) a $500 million three-year senior unsecured delayed draw term loan agreement; and (iii) a $2.5 billion five-year senior unsecured revolving credit facility with a syndicate of banks. In addition to the credit facilities,June 2021, Holdings entered into an amended and restated revolving credit agreement, which lowered the facility amount to $1.5 billion and extended the maturity date to June 24, 2026, among other changes. The revolving credit facility has a sub-limit of $1.5 billion for the issuance of letters of credit to support the life insurance business reinsured by EQ AZ Life Re. As of September 30, 2022, the Company had $210 million undrawn letters of credit issued out of the $1.5 billion sub-limit for Equitable Financial as beneficiary.
Bilateral Letter of Credit Facilities
In February 2018, the Company entered into bilateral letter of credit facilities, each guaranteed by Holdings, with an aggregate principal amount of approximately $1.9 billion, primarilywith multiple counterparties. In June 2021, Holdings entered into amendments with each of the issuers of its bilateral letter of credit facilities to be usedeffect changes similar to those effected in the amended and restated revolving credit agreement. The respective facility limits of the bilateral letter of credit facilities remained unchanged. These facilities support ourthe life insurance business reinsured toby EQ AZ Life Re followingRe. The HSBC facility matures on February 16, 2024 and the unwindrest of the reinsurance provided to AXA Equitable Life by AXA RE Arizona for certain variable annuities with GMxB features (the “GMxB Unwind”). As of March 31, 2018, there were no outstanding balancesfacilities mature on these credit facilities.February 16, 2026.
Guarantees and Other Commitments
The Company provides certain guarantees or commitments to affiliates and others. As of September 30, 2022, these arrangements include commitments by the Company to provide equity financing of $1.3 billion to certain limited partnerships and real estate joint ventures under certain conditions. Management believes the Company will not incur material losses as a result of these commitments.
The Company had $812$17 million (including $262 million with affiliates) and $712of undrawn letters of credit related to reinsurance as of September 30, 2022. The Company had $880 million of commitments under equity financing arrangements to certain limited partnership and existing mortgage loan agreements respectively, at March 31, 2018.as of September 30, 2022.

The Company is the obligor under certain structured settlement agreements it had entered into with unaffiliated insurance companies and beneficiaries. To satisfy its obligations under these agreements, the Company owns single premium annuities issued by previously wholly-owned life insurance subsidiaries. The Company has directed payment under these annuities to be made directly to the beneficiaries under the structured settlement agreements. A contingent liability exists with respect to these agreements should the previously wholly-owned subsidiaries be unable to meet their obligations. Management believes the need for the Company to satisfy those obligations is remote.

13)    INSURANCE GROUP STATUTORY FINANCIAL INFORMATION
Prescribed and Permitted Accounting Practices

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNotes to Consolidated Financial Statements (Unaudited), Continued
(UNAUDITED)

As of September 30, 2022, the following three prescribed and permitted practices resulted in net income (loss) and capital and surplus that is different from the statutory surplus that would have been reported had NAIC statutory accounting practices been applied.
15)Equitable Financial was granted a permitted practice by the NYDFS to apply SSAP 108, Derivatives Hedging Variable Annuity Guarantees on a retroactive basis from January 1, 2021 through June 30, 2021, after reflecting the impacts of our reinsurance transaction with Venerable. The permitted practice was amended to also permit Equitable Financial to adopt SSAP 108 prospectively as of July 1, 2021 and to consider the impact of both the interest rate derivatives and the general account assets used to fully hedge the interest rate risk inherent in its variable annuity guarantees when determining the amount of the deferred asset or liability under SSAP 108. Application of the permitted practice partially mitigates the New York Insurance Regulation 213 (“Reg 213”) impact of the Venerable Transaction on Equitable Financial’s statutory capital and surplus and enables Equitable Financial to more effectively neutralize the impact of interest rates on its statutory surplus and to better align with our economic hedging program. The impact of applying this permitted practice relative to SSAP 108 as written was an increase of approximately $128 million in statutory special surplus funds and a decrease of $332 million and $1.2 billion in statutory net income as of and for the three and nine months ended September 30, 2022, respectively, which will be amortized over five years for each of the retrospective and prospective components. The permitted practice also reset Equitable Financial’s unassigned surplus to zero as of June 30, 2021 to reflect the transformative nature of the Venerable Transaction.
The NAIC Accounting Practices and Procedures manual (“NAIC SAP”) has been adopted as a component of prescribed or permitted practices by the State of New York. However, Reg 213 adopted in May of 2019 and as amended in February 2020 and March 2021, differs from the NAIC variable annuity reserve and capital framework. Reg 213 requires Equitable Financial to carry statutory basis reserves for its variable annuity contract obligations equal to the greater of those required under (i) the NAIC standard or (ii) a revised version of the NYDFS requirement in effect prior to the adoption of the first amendment for contracts issued prior to January 1, 2020, and for policies issued after that date a new standard that in current market conditions imposes more conservative reserving requirements for variable annuity contracts than the NAIC standard.
The impact of the application of Reg 213 was a decrease of approximately $2.2 billion in statutory surplus as of September 30, 2022 compared to statutory surplus under the NAIC variable annuity framework. Our hedging program is designed to hedge the economics of our insurance liabilities and largely offsets Reg 213 and NAIC framework reserve movements due to interest rates and equities. The NYDFS allows domestic insurance companies a five year phase-in provision for Reg 213 reserves. As of September 30, 2022, Equitable Financial’s Reg 213 reserves are 100% phased-in. As of September 30, 2022, given the prevailing market conditions and business mix, there are no Reg 213 redundant reserves over the US RBC CTE 98 total asset requirement (“TAR”). Finally, the continued application of Reg 213 resulted in a corresponding increase of $0.8 billion and a decrease of $0.9 billion in statutory net income for the three and nine months ended September 30, 2022, which was largely offset by net income gains on our hedging program during the same period as noted.
During the fourth quarter 2020, Equitable Financial received approval from NYDFS for its proposed amended Plan of Operation for Separate Account No. 68 (“SA 68”) for our Structured Capital Strategies product and Separate Account No. 69 (“SA 69”) for our Equi-Vest product Structured Investment Option, to change the accounting basis of these two non-insulated Separate Accounts from fair value to book value in accordance with Section 1414 of the Insurance Law to align with how we manage and measure our overall general account asset portfolio. In order to facilitate this change and comply with Section 4240(a)(10), the Company also sought approval to amend the Plans to remove the requirement to comply with Section 4240(a)(5)(iii) and substitute it with a commitment to comply with Section 4240(a)(5)(i). Similarly, the Company updated the reserves section of each Plan to reflect the fact that Regulation 128 would no longer be applicable upon the change in accounting basis. We applied this change effective January 1, 2021. The impact of the application is an increase of approximately $2.3 billion in statutory surplus and an increase in statutory net income as of and for the three and nine months ended September 30, 2022 of $426 million and $2.4 billion, respectively.
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Notes to Consolidated Financial Statements (Unaudited), Continued

14)    BUSINESS SEGMENT INFORMATION
The Company has four reportable segments: Individual Retirement, Group Retirement, Investment Management and Research and Protection Solutions.
The Company changed its segment presentation in the fourth quarter 2017. The segment disclosures are based on the intention to provide the users of the financial statements with a view of the business from the Company’s perspective. As a result, the Company determined that it is more useful for a user of the financial statements to assess the historical performance on the basis which management currently evaluates the business. The reportable segments are based on the nature of the business activities, as they exist as of the initial filing date.
These segments reflect the manner by which the Company’s chief operating decision maker views and manages the business. A brief description of these segments follows:
•The Individual Retirement segment offers a diverse suite of variable annuity products which are primarily sold to affluent and high net worth individuals saving for retirement or seeking retirement income.
•The Group Retirement segment offers tax-deferred investment and retirement plansservices or products to beplans sponsored by educational entities, municipalities and not-for-profit entities, as well as small and medium-sized businesses.
•The Investment Management and Research segment provides diversified investment management, research and related solutions globally to a broad range of clients through three main client channels-channels - Institutional, Retail and Private Wealth Management-and- and distributes its institutional research products and solutions through Bernstein Research Services.
•The Protection Solutions segment includes our life insurance and group employee benefits businesses. Our life insurance business offers a variety of variable universal life, universal lifeVUL, UL and term life products to help affluent and high net worth individuals, as well as small and medium-sized business owners, with their wealth protection, wealth transfer and corporate needs. Our group employee benefits business offers a suite of dental, vision, life, and short- and long-term disability and other insurance products to small and medium-size businesses across the United States.
Measurement
Operating earnings (loss) is the financial measure which primarily focuses on the Company’s segments’ results of operations as well as the underlying profitability of the Company’s core business. By excluding items that can be distortive and unpredictable such as investment gains (losses) and investment income (loss) from derivative instruments, the Company believes operating earnings (loss) by segment enhances the understanding of the Company’s underlying drivers of profitability and trends in the Company’s segments.
In the first quarter of 2018, the Company revised its Operating earnings definition as it relates to the treatment of certain elements of the profitability of its variable annuity products with indexed-linked features to align to the treatment of its variable annuity products with GMxB features. In addition, adjustments for variable annuity products with index-linked features previously included within Other adjustments in the calculation of Non-GAAP Operating Earnings are now included with the adjustments for variable annuity products with GMxB features in the broader adjustment category, Variable annuity product features. In order to improve the consistency and comparability of the financial statements, management revised the Notes to the Consolidated Financial Statements for the six months ended June 30, 2017, nine months ended September 30, 2017 and the year ended December 31, 2017 to include the revisions discussed herein. See Note 17 to the Notes to Consolidated Financial Statements for details of the revisions.
Operating earnings is calculated by adjusting each segment’s Netnet income (loss) attributable to Holdings for the following items:


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

•Items related to Variablevariable annuity product features, which includeinclude: (i) certain changes in the fair value of the derivatives and other securities we use to hedge these features andfeatures; (ii) the effect of benefit ratio unlock adjustments, including extraordinary economic conditions or events such as COVID-19; (iii) changes in the fair value of the embedded derivatives of our GMxB riders reflected within Variablevariable annuity products’ net derivative results;results and the impact of these items on DAC amortization on our SCS product; and (iv) DAC amortization for the SCS variable annuity product arising from near-term fluctuations in index segment returns;
•Investment (gains) losses, which includes other-than-temporarycredit loss impairments of securities,securities/investments, sales or disposals of securities/investments, realized capital gains/losses and valuation allowances;
Goodwill impairment, which includes a write-down of goodwill in first quarter of 2017.
•Net actuarial (gains) losses, which includes actuarial gains and losses as a result of differences between actual and expected experience on pension plan assets or projected benefit obligation during a given period related to pension, other postretirement benefit obligations, and one timethe one-time impact of the settlement of gains and losses;the defined benefit obligation;
•Other adjustments, which includesprimarily include restructuring costs related to severance lease write-offsand separation, COVID-19 related impacts, net derivative gains (losses) on certain Non-GMxB derivatives, net investment income from certain items including consolidated VIE investments, seed capital mark-to-market adjustments, unrealized gain/losses associated with equity securities, certain legal accruals; and a bespoke deal to repurchase UL policies from one entity that had invested in numerous policies purchased in the life settlement market, which disposed of the risk of additional COI litigation by that entity related to non-recurring restructuring activitiesthose UL policies; and separation costs; and
•Income tax expense (benefit) related to the above items and non-recurring tax items, which includes the effect of uncertain tax positions for a given audit period,period.
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Notes to Consolidated Financial Statements (Unaudited), Continued

In the first quarter 2022, the Company updated its Operating earnings measure to exclude the DAC amortization impact of near-term fluctuations in indexed segment returns on the SCS variable annuity product to reflect the impact of market fluctuations consistently with the long term duration of the product. Operating earnings was favorably impacted by this change in the amount of $24 million and permanent differences due$94 million for the three and nine months ended September 30, 2022, respectively. The presentation of Operating earnings in prior periods was not revised to goodwill impairmentreflect this modification, however, the Company estimated that had the treatment in the Company’s Operating earnings measure of the Amortization of DAC for SCS been modified in 2020, the pre-tax impact on Operating earnings of excluding the SCS-related DAC amortization from Operating earnings would have been an increase of $7 million for the three months ended September 30, 2021, and a decrease of $7 million, $16 million and $34 million for the Tax Reform Act.nine months ended September 30, 2021, and years ended December 31, 2021 and 2020, respectively.
The General Account investment portfolio is used to support the insurance and annuity liabilities of our Individual Retirement, Group Retirement and Protection Solutions businesses segments. In the first quarter 2022, the Company changed its methodology for allocating its General Account investment portfolio, which resulted in a change in the asset and net investment income allocation amongst the Company’s business segments. Following this change the segmentation of the general account investments is now more closely aligned with the liability characteristics of the product groups. Management determined that the change in the allocation methodology allows for improved flexibility and infuses an active asset liability management practice into the segmentation process. Additionally, the Company also changed its basis for allocating the spread earned from our FHLB investment borrowing and FABN programs. The spread earned from our FHLB investment borrowing and FABN programs includes the investment income on the assets less interest credited on the funding agreements. The net spread as reflected in net investment income is allocated to the segments based on the percentage of the individual segment insurance liabilities over the combined segments insurance liabilities.
This change in measurement only impacts our segment disclosures, and thus it has no impact on our overall consolidated financial statements. Historical segment operating income (loss), revenues and assets have not been recast in the tables as the impact was immaterial.
Revenues derived from any customer did not exceed 10% of revenues for the three and nine months ended March 31, 2018September 30, 2022 and 2017.2021.
The table below presents operating earnings (loss) by segment and Corporate and Other and a reconciliation to Netnet income (loss) attributable to Holdings for the three and nine months ended March 31, 2018September 30, 2022 and 2017,2021, respectively:
 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
(in millions)
Net income (loss) attributable to Holdings$273 $672 $2,574 $(693)
Adjustments related to:
Variable annuity product features(114)172 (2,639)3,632 
Investment (gains) losses333 (164)890 (767)
Net actuarial (gains) losses related to pension and other postretirement benefit obligations19 27 57 87 
Other adjustments (1) (2) (3)39 141 407 672 
Income tax expense (benefit) related to above adjustments(59)(35)270 (761)
Non-recurring tax items7 5 13 6 
Non-GAAP Operating Earnings$498 $818 $1,572 $2,176 
Operating earnings (loss) by segment:
Individual Retirement$270 $316 $837 $1,093 
Group Retirement$134 $192 $415 $514 
Investment Management and Research$94 $134 $330 $381 
Protection Solutions$72 $160 $208 $264 
Corporate and Other (4)$(72)$16 $(218)$(76)
 Three Months Ended March 31,
 2018 2017
 (in millions)
Net income (loss) attributable to Holdings$168
 $(290)
Adjustments related to:   
Variable annuity product features212
 291
Investment (gains) losses(102) 24
Goodwill impairment—
 369
Net actuarial (gains) losses related to pension and other postretirement benefit obligations131
 34
Other adjustments90
 (21)
Income tax expense (benefit) related to above adjustments(63) (235)
Non-recurring tax items28
 132
Non-GAAP Operating Earnings$464
 $304
Operating earnings (loss) by segment:   
Individual Retirement$360
 $202
Group Retirement76
 59
Investment Management and Research81
 32
Protection Solutions23
 39
Corporate and Other(1)
(76) (28)

______________

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNotes to Consolidated Financial Statements (Unaudited), Continued
(UNAUDITED)

(1)Includes separation costs of $25 million and $62 million for the three and nine months ended September 30, 2021, respectively. Separation costs were completed during 2021.
(1)Includes interest expense of $44 million and $31 million, for the three months ended March 31, 2018 and 2017, respectively.

(2)Includes certain gross legal expenses related to the COI litigation of $2 million, $0 million, $168 million and $180 million for the three and nine months ended September 30, 2022 and 2021, respectively. Includes policyholder benefit costs of $0 million and $75 million for the three and nine months ended September 30, 2022 stemming from a deal to repurchase UL policies from one entity that had invested in numerous policies purchased in the life settlement market.
(3)Includes Non-GMxB related derivative hedge gains and losses of ($28) million, ($4) million, ($68) million and $140 million for the three and nine months ended September 30, 2022 and 2021, respectively.
(4)Includes interest expense and financing fees of $51 million, $65 million, $156 million and $180 million for the three and nine months ended September 30, 2022 and 2021, respectively.

Segment revenues areis a measure of the Company’s revenue by segment as adjusted to exclude certain items. The following table reconciles segment revenues to Totaltotal revenues by excluding the following items:
•Items related to variable annuity product features, which include certain changes in the fair value of the derivatives and other securities we use to hedge these features and changes in the fair value of the embedded derivatives reflected within the net derivative results of variable annuity product features;
•Investment gains (losses),(gains) losses, which include other-than-temporaryincludes credit loss impairments of securities,securities/investments, sales or disposals of securities/investments, realized capital gains/losses and valuation allowances; and
•Other adjustments, which primarily includes the impact of adoption of revenue recognition standard ASC 606.net derivative gains (losses) on certain Non-GMxB derivatives and net investment income from certain items including consolidated VIE investments, seed capital mark-to-market adjustments and unrealized gain/losses associated with equity securities.
The table below presents segment revenues for the three and nine months ended March 31, 2018September 30, 2022 and 2017:2021.
 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
(in millions)
Segment revenues:
Individual Retirement (1)$1,017 $998 $3,061 $2,957 
Group Retirement (1)289 343 924 1,018 
Investment Management and Research (2)996 1,093 3,134 3,169 
Protection Solutions (1)791 838 2,478 2,496 
Corporate and Other (1)363 479 1,087 1,199 
Adjustments related to:
Variable annuity product features(107)(256)2,468 (3,750)
Investment gains (losses), net(333)164 (890)767 
Other adjustments to segment revenues(7)(44)(141)(138)
Total revenues$3,009 $3,615 $12,121 $7,718 
 Three Months Ended March 31,
 2018 2017
 (in millions)
Segment revenues:   
Individual Retirement(1)
$729
 $1,019
Group Retirement(1)
238
 227
Investment Management and Research(2)
909
 743
Protection Solutions(1)
809
 789
Corporate and Other(1)
288
 340
Adjustments related to:   
Variable annuity product features(197) (287)
Investment gains (losses)102
 (24)
Other adjustments to segment revenues(43) 23
Total revenues$2,835
 $2,830
(1)Includes investment expenses charged by AB of approximately $18 million and $17 million for the three months ended March 31, 2018 and 2017, respectively, for services provided to the Company.
(2)Inter-segment investment management and other fees of approximately $25 million and $24 million for the three months ended March 31, 2018 and 2017, respectively, are included in total revenues of the Investment Management and Research segment.

______________

(1)Includes investment expenses charged by AB of $33 million, $20 million, $77 million and $59 million for the three and nine months ended September 30, 2022 and 2021, respectively, for services provided to the Company.

(2)Inter-segment investment management and other fees of $41 million $32 million, $101 million and $94 million for the three and nine months ended September 30, 2022 and 2021, respectively, are included in segment revenues of the Investment Management and Research segment.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


The table below presents Totaltotal assets by segment as of March 31, 2018September 30, 2022 and December 31, 2017:2021:
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Notes to Consolidated Financial Statements (Unaudited), Continued

March 31,
2018		 December 31,
2017		 September 30, 2022December 31, 2021
(in millions)(in millions)
Total assets by segment:   Total assets by segment:
Individual Retirement$103,786
 $121,723
Individual Retirement$119,883 $143,663 
Group Retirement43,615
 38,578
Group Retirement38,908 55,368 
Investment Management and Research11,809
 8,297
Investment Management and Research12,370 11,602 
Protection Solutions51,457
 43,116
Protection Solutions36,998 50,686 
Corporate and Other21,627
 23,934
Corporate and Other37,441 30,943 
Total assets$232,294
 $235,648
Total assets$245,600 $292,262 


16)15)    EARNINGS PER COMMON SHARE
Basic earnings per share (“EPS”) is calculated by dividing net income (loss) attributable to Holdings common shareholders by the weighted-average number of common shares outstanding during the period. Diluted EPS is calculated by dividing the net income (loss) attributable to Holdings common shareholders adjusted for the incremental dilution from AB by the weighted-average number of common shares used in the basic EPS calculation.
The following table presents the weighted averagea reconciliation of Net income (loss) and Weighted-average common shares used in calculating basic and diluted earningsEarnings per common share:
 Three Months Ended March 31,
 2018 2017
 (in millions)
Weighted Average Shares:   
Weighted average common stock outstanding for basic and diluted earnings per common share561
 561
The following table presents the reconciliation of the numeratorshare for the basic and dilutedperiods indicated:
 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
(in millions)
Weighted-average common shares outstanding:
Weighted-average common shares outstanding — basic
374.5 411.3 380.6 423.2 
Effect of dilutive potential common shares:
Employee share awards (1)2.3 3.3 2.3 — 
Weighted-average common shares outstanding — diluted (2)376.8 414.6 382.9 423.2 
Net income (loss):
Net income (loss)$327 $765 $2,739 $(412)
Less: Net income (loss) attributable to the noncontrolling interest54 93 165 281 
Net income (loss) attributable to Holdings273 672 2,574 (693)
Less: Preferred stock dividends14 14 54 53 
Net income (loss) available to Holdings’ common shareholders$259 $658 $2,520 $(746)
Earnings per common share:
Basic$0.69 $1.60 $6.62 $(1.76)
Diluted$0.69 $1.59 $6.58 $(1.76)
_____________
(1)Calculated using the treasury stock method.
(2)Due to net income per share calculations:
 Three Months Ended March 31,
 2018 2017
 (in millions)
Net income (loss) attributable to Holdings common shareholders:   
Net income (loss) attributable to Holdings common shareholders (basic)$168
 $(290)
Less: Incremental dilution from AB(1)
—
 1
Net income (loss) attributable to Holdings common shareholders (diluted)$168
 $(291)
(1)The incremental dilution from AB represents the impact of AB’s dilutive units on the Company’s diluted earnings per share and is calculated based on the Company’s proportionate ownership interest in AB.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


The following table presents both basic and diluted income (loss) per share for each period presented:
 Three Months Ended March 31,
 2018 2017
 (dollars per share)
Net income (loss) attributable to Holdings per common share:   
Basic$0.30
 $(0.52)
Diluted$0.30
 $(0.52)

17)     REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS
During the first quarter of 2018, management identified an error in its previously issued financial statements related to a misclassification between interest credited and net derivative gains/losses. The impact of this error to the consolidated financial statementsloss for the six months ended June 30, 2017, nine months ended September 30, 20172021 approximately 3.7 million share awards were excluded from the diluted EPS calculation.
For the three and the years ended December 31, 2017 and 2016 was not considered to be material. In order to improve the consistency and comparability of the financial statements, management revised the consolidated statements of income (loss) and statements of cash flows to include the revisions discussed herein.


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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

The following tables present line items for prior period financial statements that have been affected by the revisions. For these items, the tables detail the amounts as previously reported, the impact upon those line items due to the revisions, and the amounts as currently revised within the financial statements.
Effects of the revision to the Company’s previously reported Consolidated Statements of Income (Loss) and Cash Flows for the six months ended June 30, 2017
  Six Months Ended
June 30, 2017
  As Previously Reported Impact of Revisions As Revised
 (in millions)
Consolidated Statement of Income (Loss):      
Revenues:      
Net derivative gains (losses) $528
 $(34) $494
Total revenues 6,746
 $(34) 6,712
Benefits and other deductions:      
Interest credited to policyholders’ account balances $522
 $(34) $488
Total benefits and other deductions 6,299
 $(34) 6,265
 Six Months Ended
June 30, 2017
 As Previously Reported Impact of Revisions As Revised
 (in millions)
Consolidated Statement of Cash Flows:     
Cash flow from operating activities:     
Interest credited to policyholders’ account balances$522
 $(34) $488
Net derivative (gains) loss(528) 34
 (494)
Net cash provided by (used in) operating activities666
 $—
 666



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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Effects of the revision to the Company’s previously reported Consolidated Statements of Income (Loss) and Cash Flows for the nine months ended September 30, 20172022 and 2021, 2.9 million, 4.5 million, 3.5 million and 8.3 million of outstanding stock awards, respectively, were not included in the computation of diluted earnings per share because their effect was anti-dilutive.
16)     SUBSEQUENT EVENTS
EQUI-VEST Reinsurance Transaction

69
  Nine Months Ended
September 30, 2017
  As Previously Reported Impact of Revisions As Revised
 (in millions)
Consolidated Statement of Income (Loss):      
Revenues:      
Net derivative gains (losses) $172
 $(44) $128
Total revenues 9,529
 $(44) 9,485
Benefits and other deductions:      
Interest credited to Policyholders’ account balances $787
 $(44) $743
Total benefits and other deductions 9,070
 $(44) 9,026
 Nine Months Ended
September 30, 2017
 As Previously Reported Impact of Revisions As Revised
 (in millions)
Consolidated Statement of Cash Flows:     
Cash flow from operating activities:     
Interest credited to policyholders’ account balances$787
 $(44) $743
Net derivative (gains) loss(172) 44
 (128)
Net cash provided by (used in) operating activities1,044
 $—
 1,044



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AXA EQUITABLE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

On October 3, 2022, Equitable Financial completed the transactions (the “EQUI-VEST Transaction”) contemplated by the previously announced Master Transaction Agreement, dated August 16, 2022, by and between Equitable Financial and First Allmerica Financial Life Insurance Company, a Massachusetts-domiciled insurance company (the “Reinsurer”), a wholly owned subsidiary of Global Atlantic Financial Group.
EffectsAt the closing of the revisionEQUI-VEST Transaction, Equitable Financial and the Reinsurer entered into a Coinsurance and Modified Coinsurance Agreement (the “EQUI-VEST Reinsurance Agreement”), pursuant to which Equitable Financial ceded to the Company’s previously reported Consolidated StatementsReinsurer, on a combined coinsurance and modified coinsurance basis, a 50% quota share of Income (Loss)approximately 360,000 legacy Group EQUI-VEST deferred variable annuity contracts issued by Equitable Financial between 1980 and 2008, which predominately include Equitable Financial’s highest guaranteed general account crediting rates of 3%, supported by general account assets of approximately $4 billion and Cash Flows for the year ended December 31, 2017$5 billion of separate account value (the “Reinsured Contracts”).
70
 December 31, 2017
 As Previously Reported Impact of Revisions As Revised
 (in millions)
Consolidated Statement of Income (Loss):  
Revenues:     
Net derivative gains (losses)$228
 $(113) $115
Total revenues12,514
 $(113) 12,401
Benefits and other deductions:     
Interest credited to Policyholder’s account balances1,108
 $(113) 995
Total benefits and other deductions11,200
 $(113) 11,087
 December 31, 2017
 As Previously Reported Impact of Revisions As Revised
 (in millions)
Consolidated Statement of Cash Flows:     
Cash flow from operating activities:     
Interest credited to policyholders’ account balances$1,108
 $(113) $995
Net derivative (gains) loss(228) 113
 (115)
Net cash provided by (used in) operating activities1,021
 $—
 1,021

Effects of the revision to the Company’s previously reported Consolidated Statements of Income (Loss), and Cash Flows for the year ended December 31, 2016
 December 31, 2016
 As Previously Reported Impact of Revisions As Revised
 (in millions)
Consolidated Statement of Income (Loss):  
Revenues:     
Net derivative gains (losses)$(1,722) $(121)—
$(1,843)
Total revenues11,922
 $(121) 11,801
Benefits and other deductions:     
Interest credited to Policyholder’s account balances1,091
 $(121) 970
Total benefits and other deductions9,868
 $(121) 9,747


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

 December 31, 2016
 As Previously Reported Impact of Revisions As Revised
 (in millions)
Consolidated Statement of Cash Flows:     
Cash flow from operating activities:     
Interest credited to policyholders’ account balances$1,091
 $(121) $970
Net derivative (gains) loss1,722
 121
 1,843
Net cash provided by (used in) operating activities(236) $—
 (236)

18)    SUBSEQUENT EVENTS
In April 2018, Holdings entered into letter agreements with the lenders under each of its credit facilities and letter of credit facilities, and AXA Equitable Life entered into waiver letter agreements with certain of its derivative counterparties, waiving defaults caused by the restatement of certain financial statements.  Holdings and AXA Equitable Life each restated their annual financial statements for the year ended December 31, 2016 and Holdings restated its interim financial statements for the nine months ended September 30, 2017 and the six months ended June 30, 2017.  All required waivers were received and we do not consider this to have a material impact on our business, results of operations or financial condition.
In April 2018, Colisee Re S.A.’s promise to the Delaware Department of Insurance to maintain the minimum RBC level for AXA Corporate Solutions Life Reinsurance Company at the company action level was terminated and replaced with a similar guarantee from Holdings.
As a result of the completion of the GMxB Unwind on April 12, 2018, we were released from regulatory letter of credit requirements, and accordingly no longer benefit from the $1.5 billion revolving credit facility with AXA.
On April 20, 2018, Holdings:
issued $800 million aggregate principal amount of 3.900% Senior Notes due 2023, $1.5 billion aggregate principal amount of 4.350% Senior Notes due 2028 and $1.5 billion aggregate principal amount of 5.000% Senior Notes due 2048 (together, the “Notes”);
delivered a termination notice, effective April 23, 2018, for its $3.9 billion two-year senior unsecured delayed draw term loan agreement; and
settled certain loans issued to or received from AXA and its affiliates resulting in a net payment to AXA and its affiliates of $2,530 million in principal and $11 million of accrued interest.
On April 20, 2018, AXA pre-paid the remaining $650 million of a $700 million note and $50 million of a $500 million term loan and related accrued interest from the Company.
On April 23, 2018, Holdings used a portion of the net proceeds from the sale of the Notes, together with available cash, to (i) purchase 100% of the shares of AXA IM Holdings US and (ii) purchase the AB Units held by Coliseum Re. The Company’s $185 million loan to AXA IM Holding US was settled as part of the purchase of AXA IM Holding US, which wholly owns AB units. The remaining net proceeds, together with the $300 million of borrowings drawn on May 4th, 2018 under our three-year term loan agreement, was used to fully repay the outstanding commercial paper program of AXA Financial currently guaranteed by AXA. By the time of the IPO, all the credit facilities Holdings and its subsidiaries previously had with AXA or guaranteed by AXA were terminated.
On April 24, 2018, a 459.4752645-for-1 stock split of the common stock of Holdings was effected. All applicable share data, per share amounts and related information in the consolidated financial statements and notes thereto have been adjusted retroactively to give effect to the stock split.
On April 25, 2018, Holdings adopted the AXA Equitable Holdings, Inc. Short-Term Incentive Compensation Plan (the “STIC Plan”). Although the STIC Plan is not a share-based compensation plan, awards payable under the STIC Plan may be paid in cash or in awards granted under the AXA Equitable Holdings, Inc. 2018 Omnibus Incentive Plan (the “Omnibus Plan”), a share-based compensation plan. The Omnibus Plan was adopted by Holdings on May 8, 2018.
On May 2, 2018, AB announced that it will establish its corporate headquarters in, and relocate approximately 1,050 jobs currently located in the New York metro area to, Nashville, TN. AB’s Nashville headquarters will house Finance, IT, Operations, Legal, Compliance, Internal Audit, Human Capital, and Sales and Marketing. AB will begin relocating jobs during 2018 and expects this transition to take several years. AB will continue to maintain a principal location in New York City, which will house its Portfolio Management, Sell-Side Research and Trading, and New York-based Private Wealth Management businesses.
On May 4, 2018, Holdings borrowed $300 million under the $500 million three-year senior unsecured delayed draw term loan agreement. On May 9, 2018, Holdings amended and restated its Certificate of Incorporation under which the Board of Directors have the authority, without further action by stockholders, to issue up to 200,000,000 shares of preferred stock, par value $1.00 per share, in one or more series.
On May 14, 2018, Holdings completed an initial public offering in which AXA sold 157,837,500 shares of Holdings’ common stock to the public. Following the initial public offering, AXA owned 423,750,000 shares of Holdings’ common stock.
As of June 12th, there are no longer any amounts outstanding under AXA Financial’s commercial paper program and AXA will no longer provide any related guarantees.




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Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations
AXA Equitable Holdings, Inc. (“Holdings” and, collectively with its consolidated subsidiaries, the “Company”) is a diversified financial services company. Through March 31, 2018, Holdings was a wholly-owned subsidiary of AXA S.A. (“AXA”), a French holding company for the AXA Group, a worldwide leader in life, property and casualty and health insurance and asset management. As used herein, “AXA Equitable Life” refers to AXA Equitable Life Insurance Company, a New York stock life insurance corporation, “AXA Financial” refers to AXA Financial, Inc., an intermediate holding company incorporated in Delaware, “MLOA” refers to MONY Life Insurance Company of America, an Arizona life insurance corporation, “AXA Advisors” refers to AXA Advisors, LLC, a Delaware limited liability company, and “AXA RE Arizona” refers to AXA RE Arizona Company, an Arizona corporation, and “EQ AZ Life Re” refers to EQ AZ Life Re Company, a newly formed captive insurance company organized under the laws of Arizona.
In May 2017, AXA announced its intention to pursue the sale of a minority stake in Holdings through an initial public offering (the “IPO”). On May 14, 2018, Holdings completed the IPO in which AXA sold 157,837,500 shares of Holdings common stock to the public. Following the IPO, AXA owns approximately 71.9% of the outstanding common stock of Holdings.
Management’sThe following discussion and analysis of our financial condition and results of operations for the Company that follows should be read in its entirety and in conjunction with the consolidated financial statements and the related Notes to Consolidated Financial Statements included elsewhere herein, with the information provided under “Forward-looking Statements” included elsewhere herein and thenotes contained in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section contained in our Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 Form 10-K”).
In addition to historical data, this discussion contains forward-looking statements about our business, operations and “Risk Factors” sections includedfinancial performance based on current expectations that involve risks, uncertainties and assumptions. Actual results may differ materially from those discussed in Holdings’ prospectus dated May 9, 2018,the forward-looking statements as a result of various factors. See the Note Regarding Forward-Looking Statements and Information. Investors are directed to consider the risks and uncertainties discussed in Part II, Item 1A of this Quarterly Report on Form 10-Q, as well as in other documents we have filed with the U.S. Securities and Exchange Commission pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, on May 11, 2018 (the “Prospectus”).SEC.
Executive Summary
Overview
We are one of America’s leading financial services companies, providingproviding: (i) advice and solutions for helping Americans set and meet their retirement goals and protect and transfer their wealth across generationsgenerations; and (ii) a wide range of investment management insights, expertise and innovations to drive better investment decisions and outcomes for clients worldwide.
We manage our business through four segments: Individual Retirement, Group Retirement, Investment Management and Research, and Protection Solutions. We report certain activities and items that are not included in these segments in Corporate and Other. See Note 1514 of the Notes to the Consolidated Financial Statements for further information on the Company’sour segments.
We benefit from our complementary mix of businesses. This business mix provides diversity in our earnings sources, which helps offset fluctuations in market conditions and variability in business results, while offering growth opportunities.
EQUI-VEST Reinsurance Transaction
On October 3, 2022, Equitable Financial completed the transactions (the “EQUI-VEST Transaction”) contemplated by the previously announced Master Transaction Agreement, dated August 16, 2022, by and between Equitable Financial and First Allmerica Financial Life Insurance Company, a Massachusetts-domiciled insurance company (the “Reinsurer”), a wholly owned subsidiary of Global Atlantic Financial Group.
At the closing of the EQUI-VEST Transaction, Equitable Financial and the Reinsurer entered into a Coinsurance and Modified Coinsurance Agreement (the “EQUI-VEST Reinsurance Agreement”), pursuant to which Equitable Financial ceded to the Reinsurer, on a combined coinsurance and modified coinsurance basis, a 50% quota share of approximately 360,000 legacy Group EQUI-VEST deferred variable annuity contracts issued by Equitable Financial between 1980 and 2008 supported by general account assets of approximately $4 billion and $5 billion of separate account value (the “Reinsured Contracts”). The Reinsured Contracts predominately include certain of Equitable Financial’s contracts that offer the highest guaranteed general account crediting rates of 3%. At the closing of the EQUI-VEST Transaction, Reinsurer deposited assets supporting the general account liabilities relating to the Reinsured Contracts into a trust account for the benefit of Equitable Financial, which assets will secure its obligations to Equitable Financial under the EQUI-VEST Reinsurance Agreement. Equitable Financial reinsured the separate accounts relating to the Reinsured Contracts on a modified coinsurance basis. Commonwealth Annuity and Life Insurance Company, an insurance company domiciled in the Commonwealth of Massachusetts and affiliate of Reinsurer (“Commonwealth”), provided a guarantee of Reinsurer’s payment obligation to Equitable Financial under the EQUI-VEST Reinsurance Agreement. In addition, the investment of assets in the trust account is subject to investment guidelines, and the EQUI-VEST Reinsurance Agreement requires enhanced funding upon certain capital adequacy related triggers. The EQUI-VEST Reinsurance Agreement also contains additional counterparty risk management and mitigation provisions. At the closing of the EQUI-VEST Transaction, ABLP entered into an investment advisory agreement with Reinsurer pursuant to which ABLP will serve as the preferred investment manager of certain general account assets transferred to the trust account. Equitable Financial will continue to administer the Reinsured Contracts.
Revenues
Our revenues come from three principal sources:
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•fee income derived from our retirement and protection products and our investment management and research services;
•premiums from our traditional life insurance and annuity products; and
•investment income from our General Account investment assets (“GAIA”).portfolio.
Our fee income varies directly in relation to the amount of the underlying account valueAV or benefit base of our retirement and protection products and the amount of AUM of our Investment Management and Research business. AV and AUM, each as defined in “—Key“Key Operating Measures,” are influenced by changes in economic conditions, primarily equity market returns, as well as net flows. Our premium income is driven by the growth in new policies written and the persistency of our in-force policies, both of which are influenced by a combination of factors, including our efforts to attract and retain customers and market conditions that influence demand for our products. Our investment income is driven by the yield on our General Account investment portfolio of


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GAIA and is impacted by the prevailing level of interest rates as we reinvest cash associated with maturing investments and net flows to the portfolio.
Benefits and Other Deductions
Our primary expenses are:
•    policyholders’ benefits and interest credited to policyholders’ account balances;
•    sales commissions and compensation paid to intermediaries and advisors that distribute our products and services; and
•    compensation and benefits provided to our employees and other operating expenses.
Policyholders’ benefits are driven primarily by mortality, customer withdrawals, and benefits which change in response to changes in capital market conditions. In addition, some of our policyholders’ benefits are directly tied to the AV and benefit base of our variable annuity products. Interest credited to policyholders varies in relation to the amount of the underlying AV or benefit base. Sales commissions and compensation paid to intermediaries and advisors vary in relation to premium and fee income generated from these sources, whereas compensation and benefits to our employees are more constant and impacted by market wages and decline with increases in efficiency. Our ability to manage these expenses across various economic cycles and products is critical to the profitability of our company.
Net Income Volatility
We have offered and continue to offer variable annuity products with variable annuity guaranteed benefits (“GMxB”)GMxB features. The future claims exposure on these features is sensitive to movements in the equity markets and interest rates. Accordingly, we have implemented hedging and reinsurance programs designed to mitigate the economic exposure to us from these features due to equity market and interest rate movements. Changes in the values of the derivatives associated with these programs due to equity market and interest rate movements are recognized in the periods in which they occur while corresponding changes in offsetting liabilities not measured at fair value are recognized over time. This results in net income volatility as further described below. See “—Significant Factors Impacting Our Results—Impact of Hedging and GMIBGMxB Reinsurance on Results.”
In addition to our dynamic hedging strategy, we have recently implemented static hedge positions designed to mitigate the adverse impact of changing market conditions on our statutory capital. We believe this program will continue to preserve the economic value of our variable annuity contracts and better protect our target variable annuity asset level. However, these new static hedge positions increase the size of our derivative positions and may result in higher net income volatility on a period-over-period basis.
Due to the impacts on our net income of equity market and interest rate movements and other items that are not part of the underlying profitability drivers of our business, we evaluate and manage our business performance using Non-GAAP Operating Earnings, a non-GAAP financial measure that is intended to remove these impacts from our results. See “—Key Operating Measures—Non-GAAP Operating Earnings.”
COVID-19 Impact
COVID-19 continues to evolve. We continue to closely monitor COVID-19 developments and the impact on our business, operations and investment portfolio. Any future impact of COVID-19 depends on many unknown factors and is highly uncertain, including as to the emergence and spread of COVID-19 variants, the availability, adoption and efficacy of COVID-19 treatments and vaccines, and future actions taken by governmental authorities, central banks and other parties in
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response to COVID-19. Further, as COVID-19 has not yet subsided, it is not possible to predict or estimate the longer-term effects of COVID-19 on the broad economy or on our business, results of operations and financial condition, including the impact on our investment portfolio and the possible need for us revisit or revise targets and/or aspects of our business model previously provided to the markets.For additional information regarding the actual and potential impacts of COVID-19 and action we have taken to mitigate certain impacts, see “Risk Factors—Risks Relating to Conditions in the Financial Markets and Economy—The coronavirus (COVID-19) pandemic”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Summary—COVID-19 Impact” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—General Account Investment Portfolio” in the 2021 Form 10-K.
Significant Factors Impacting Our Results
The following significant factors have impacted, and may in the future impact, our financial condition, results of operations or cash flows.
Impact of Hedging and GMIBGMxB Reinsurance on Results
We have offered and continue to offer variable annuity products with GMxB features. The future claims exposure on these features is sensitive to movements in the equity markets and interest rates. Accordingly, we have implemented hedging and reinsurance programs designed to mitigate the economic exposure to us from these features due to equity market and interest rate movements. These programs include:


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•Variable annuity hedging programs.We use a dynamic hedging program (within this program, generally, we reevaluate our economic exposure at least daily and rebalance our hedge positions accordingly) to mitigate certain risks associated with the GMxB features that are embedded in our liabilities for our variable annuity products. This program utilizes various derivative instruments that are managed in an effort to reduce the economic impact of unfavorable changes in GMxB features’ exposures attributable to movements in the equity markets and interest rates. Although this program is designed to provide a measure of economic protection against the impact of adverse market conditions, it does not qualify for hedge accounting treatment. Accordingly, changes in value of the derivatives will be recognized in the period in which they occur with offsetting changes in reserves partially recognized in the current period, resulting in net income volatility. In addition to our dynamic hedging program, in the fourth quarter of 2017 and the first quarter of 2018, we implementedhave a new hedging program using static hedge positions (derivative positions intended to be held to maturityHTM with less frequent rebalancing)re-balancing) to protect our statutory capital against stress scenarios. The implementation of this newThis program in addition to our dynamic hedge program is expected to increasehas increased the size of our derivative positions, resulting in an increase in net income volatility. The impacts are most pronounced for variable annuity products in our Individual Retirement segment.
GMIB•GMxB reinsurance contracts. Historically, GMIB reinsurance contracts were used to cede to affiliated and non-affiliated reinsurers a portion of our exposure to variable annuity products that offer a GMIB feature. We account for the GMIB reinsurance contracts as derivatives and report them at fair value. Gross reserves for GMIB reserves are calculated on the basis of assumptions related to projected benefits and related contract charges over the lives of the contracts. Accordingly, our gross reserves will not immediately reflect the offsetting impact on future claims exposure resulting from the same capital market or interest rate fluctuations that cause gains or losses on the fair value of the GMIB reinsurance contracts. Because changes in the fair value of the GMIB reinsurance contracts are recorded in the period in which they occur and a majority of the changes in gross reserves for GMIB are recognized over time, net income will be more volatile.
In addition, on June 1, 2021, we ceded legacy variable annuity policies sold by Equitable Financial between 2006-2008 (the “Block”), comprised of non-New York “Accumulator” policies containing fixed rate GMIB and/or GMDB guarantees. As this contract provides full risk transfer and thus has the same risk attributes as the underlying direct contracts, the benefits of this treaty are accounted for in the same manner as the underlying gross reserves.
Effect of Assumption Updates on Operating Results
During the third quarter of each year, we conduct our annual review of the assumptions underlying the valuation of DAC, deferred sales inducement assets, unearned revenue liabilities, liabilities for future policyholder benefits and embedded derivatives for our Individual Retirement, Group Retirement, and Protection Solution segments (assumption reviews are not relevant for the Investment Management and Research segment). Assumptions are based on a combination of Company experience, industry experience, management actions and expert judgment and reflect our best estimate as of the date of the applicable financial statements.
Most of the variable annuity products, variable universal life insurance and universal life insurance products we offer maintain policyholder deposits that are reported as liabilities and classified within either Separate AccountAccounts liabilities or policyholder account balances. Our products and riders also impact liabilities for future policyholder benefits and unearned
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revenues and assets for DAC and deferred sales inducements.DSI. The valuation of these assets and liabilities (other than deposits) areis based on differing accounting methods depending on the product, each of which requires numerous assumptions and considerable judgment. The accounting guidance applied in the valuation of these assets and liabilities includes, but is not limited to, the following: (i) traditional life insurance products for which assumptions are locked in at inception; (ii) universal life insurance and variable life insurance secondary guarantees for which benefit liabilities are determined by estimating the expected value of death benefits payable when the account balance is projected to be zero and recognizing those benefits ratably over the accumulation period based on total expected assessments; (iii) certain product guarantees for which benefit liabilities are accrued over the life of the contract in proportion to actual and future expected policy assessments; and (iv) certain product guarantees reported as embedded derivatives at fair value.
Our actuaries oversee the valuation of these product liabilities and assets and review underlying inputs and assumptions. We review the actuarial assumptions underlying these valuations at least annually and update assumptions when appropriate. Assumptions are based on a combination of company experience, industry experience, management actions and expert judgment and reflect our best estimate as of the date of each financial statement. Changes in assumptions can result in a significant change to the carrying value of product liabilities and assets and, consequently, the impact could be material to earnings in the period of the change. For further details of our accounting policies and related judgments pertaining to assumption updates, see Note 2 of the Notes to the Consolidated Financial Statements.Statements and “—Summary of Critical Accounting Estimates—Liability for Future Policy Benefits” included in the 2021 Form 10-K.
Assumption Updates
We conduct our annual review of our assumptions during the third quarter of each year. We also update our assumptions as needed in the event we become aware of economic conditions or events that could require a change in our assumptions that we believe may have a significant impact to the carrying value of product liabilities and assets and consequently materially impact our earnings in the period of the change.
Impact of Assumption Updates on Income from Continuing Operations before income taxes and Net income (loss)
The table below presents the impact of our actuarial assumption update during the three months ended September 30, 2022 and 2021 to our income (loss) from continuing operations, before income taxes and net income (loss).
Three Months Ended September 30, (1)
20222021
(in millions)
Impact of assumption update on Net income (loss):
Variable annuity product features related assumption update$175 $(91)
Assumption updates for other business7 (17)
Impact of assumption updates on Income (loss) from continuing operations, before income tax182 (108)
Income tax benefit on assumption update(38)23 
Net income (loss) impact of assumption update$144 $(85)
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(1)The amounts for the three months and the nine months ended September 30 of each year represented the same amounts.
2022 Assumption Updates
The impact of the assumption update in the third quarter 2022 was an increase of $182 million to income (loss) from continuing operations, before income taxes and an increase to net income (loss) of $144 million.
The net impact of this assumption update on income (loss) from continuing operations, before income taxes of $182 million consisted of a decrease in policy charges and fee income of $23 million, a decrease in policyholders’ benefits of $243 million, an increase in interest credited to policyholder account balances of $1 million, an increase in net derivative losses of $80 million and a decrease in the amortization of DAC of $43 million.
2021 Assumption Updates
The impact of the economic assumption update in the third quarter 2021 was a decrease of $108 million to income (loss) from continuing operations, before income taxes and a decrease to net income (loss) of $85 million. As part of this annual update the reference interest rate utilized in our GAAP fair value calculations was updated from the LIBOR swap curve to the US Treasury curve to the US Treasury curve due to the impending cessation of LIBOR and our GAAP fair value liability risk margins were increased, resulting in little impact to overall valuation as our view regarding market participant pricing of our guarantees has not changed at this time.
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The net impact of this assumption update on income (loss) from operations, before income taxes of $108 million consisted of a decrease in policy charges and fee income of $28 million, a decrease in policyholders’ benefits of $62 million, an increase in net derivative gains (losses) of $200 million and a decrease in amortization of DAC of $58 million.
Impact of Assumption Updates on Pre-tax Non-GAAP Operating Earnings
The table below presents the impact on pre-tax Non-GAAP Operating Earnings of our actuarial assumption updates during the three months ended September 30, 2022 and 2021 by segment and Corporate and Other.
Three Months Ended September 30, (1)
20222021
(in million)
Impact of assumption updates by segment:
Individual Retirement$(13)$(47)
Group Retirement34 35 
Protection Solutions7 20 
Impact of assumption updates on Corporate and Other— — 
Total impact on pre-tax Non-GAAP Operating Earnings$28 $8 
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(1)The amounts for the three months and the nine months ended September 30 of each year represented the same amounts.
2022 Assumption Updates
The impact of our 2022 annual review on Non-GAAP Operating Earnings was favorable by $28 million before taking into consideration the tax impacts or $22 million after tax. For Individual Retirement segment, the impacts primarily reflect updated mortality on our older payout business. For Group Retirement segment, the impacts reflect updated economic assumptions. The annual update for Protection Solutions segment reflects favorable economic conditions and surrenders primarily on the VUL line. This, in turn, creates future profits and lowers the accrual on our PFBL reserve.
The net impact of assumption changes on Non-GAAP Operating Earnings in the third quarter 2022 decreased policy charges and fee income by $23 million, decreased policyholders’ benefits by $9 million, increased interest credited to policyholder account balances by $1 million and decreased amortization of DAC by $43 million. Non-GAAP Operating Earnings excludes items related to Variable annuity product features, such as changes in the fair value of the embedded derivatives associated with the GMIBNLG liability and the effect of benefit ratio unlock adjustments.
2021 Assumption Updates
The impact of our 2021 annual review on Non-GAAP Operating Earnings was favorable by $8 million before taking into consideration the tax impacts or $6 million after tax. For the Individual Retirement segment, the impacts primarily reflect updated mortality on our older payout business. For Group Retirement segment, the impacts reflect updated economic assumptions. The annual update for Protection Solutions segment reflects favorable economic conditions and surrenders primarily on the VUL line. This, in turn, creates future profits and lowers the accrual on our PFBL reserve.
The net impact of assumption changes on Non-GAAP Operating Earnings in the third quarter 2021 decreased Policy charges and fee income by $28 million, increased Policyholders’ benefits by $22 million and decreased Amortization of DAC by $58 million. Non-GAAP Operating Earnings excludes items related to Variable annuity product features, such as changes in the fair value of the embedded derivatives associated with the GMIBNLG liability and the effect of benefit ratio unlock adjustments.
Macroeconomic and Industry Trends
Our business and consolidated results of operations are significantly affected by economic conditions and consumer confidence, conditions in the global capital markets and the interest rate environment.


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Financial and Economic Conditions and Consumer ConfidenceEnvironment
A wide variety of factors continue to impact financial and economic conditions and consumer confidence.conditions. These factors include, among others, concerns overincreased volatility in the capital markets, equity market declines, rising interest rates, inflationary pressures, plateauing or decreasing economic growth, high fuel and energy costs, changes in fiscal or monetary policy and geopolitical tensions. The
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invasion of Ukraine by Russia and the sanctions and other measures imposed in response to this conflict significantly increased the level of volatility in the United States,financial markets and have increased the level of economic and political uncertainty.
Stressed conditions, volatility and disruptions in the capital markets, particular markets, or financial asset classes can have an adverse effect on us, in part because we have a large investment portfolio. In addition, our insurance liabilities and derivatives are sensitive to changing market factors, including equity market performance and interest rates. During the third quarter 2022, equity markets continued lowtheir decline, while interest rates falling unemployment rates,continued to rise, and are anticipated to continue to rise throughout the U.S. Federal Reserve’s plans to further raise short-term interest rates, fluctuations in the strengthyear based on statements of members of the U.S. dollar, the uncertainty created by what actions the current administration may pursue, changes in tax policy, global economic factors including programs by the European Central Bank and the United Kingdom’s vote to exit from the European Union and other geopolitical issues. Additionally, manyBoard of Governors of the products and solutions we sell are tax-advantaged or tax-deferred. If U.S. tax laws were to change, such that our products and solutions are no longer tax-advantaged or tax-deferred, demand for our products could materially decrease.
Capital Market Conditions
Although extraordinary monetary accommodation has mitigated volatility in interest rate and credit and domestic equity markets for an extended period, global central banks may now be past peak accommodation as the U.S. Federal Reserve continues its gradual pace of policy normalization. As global monetary policy becomes less accommodating, anSystem. An increase in market volatility could continue to affect our business, including through effects on the yields we earn on invested assets, changes in required reserves and capital and fluctuations in the value of our AUM, AV or AUA.AUA from which we derive our fee income. These effects could be exacerbated by uncertainty about future fiscal policy, changes in tax policy, the scope of potential deregulation and levels of global trade.
In the short- to medium-term, theThe potential for increased volatility, coupled with prevailing interest rates remaining below historical averages despite recent increases, could pressure sales and reduce demand for our products as consumers consider purchasing alternative products to meet their objectives. In addition, this environment could make it difficult to consistently develop products that are attractive to customers. Financial performance can be adversely affected by market volatility and equity market declines as fees driven by AV and AUM fluctuate, hedging costs increase and revenues decline due to reduced sales and increased outflows.
We monitor the behavior of our customers and other factors, including mortality rates, morbidity rates, annuitization rates and lapse and surrender rates, which change in response to changes in capital market conditions, to ensure that our products and solutions remain attractive and profitable. For additional information on our sensitivity to interest rates and capital market prices, see “Quantitative and Qualitative Disclosures About Market Risk.”
Interest Rate Environment
We believe the interest rate environment will continue to impact our business and financial performance in the future for several reasons, including the following:
Our GAIA portfolio consists predominantly of fixed income investments. In the near term, and absent further material change in yields available on investments, we expect the yield we earn on new investments will be lower than the yields we earn on maturing investments, which were generally purchased in environments where interest rates were higher than current levels. If interest rates were to rise, we expect the yield on our new money investments would also rise and gradually converge toward the yield of those maturing assets.
•Certain of our variable annuity and life insurance products pay guaranteed minimum interest crediting rates. We are required to pay these guaranteed minimum rates even if earnings on our investment portfolio decline, with the resulting investment margin compression negatively impacting earnings. In addition, we expect more policyholders to hold policies with comparatively high guaranteed rates longer (lower lapse rates) in a low interest rate environment. Conversely, a rise in average yield on our investment portfolio should positively impact earnings. Similarly, we expect policyholders would be less likely to hold policies with existing guaranteed rates (higher lapse rates) as interest rates rise.
•A prolonged low interest rate environment also may subject us to increased hedging costs or an increase in the amount of statutory reserves that our insurance subsidiaries are required to hold for GMxB features, lowering their statutory surplus, which would adversely affect their ability to pay dividends to us. In addition, it may also increase the perceived value of GMxB features to our policyholders, which in turn may lead to a higher rate of annuitization and higher persistency of those products over time. Finally, low interest rates may continue to cause an acceleration of DAC amortization or reserve increase due to loss recognition for interest sensitive products, primarily for our Protection Solutions segment.


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the Notes to the Consolidated Financial Statements in this Form 10-Q.
Regulatory Developments
Our life insurance subsidiaries are regulated primarily at the state level, with some policies and products also subject to federal regulation. OnIn addition, Holdings and its insurance subsidiaries are subject to regulation under the insurance holding company laws of various U.S. jurisdictions. Furthermore, on an ongoing basis, regulators refine capital requirements and introduce new reserving standards. Regulations recently adopted or currently under review can potentially impact our statutory reserve, and capital requirements.
National Association of Insurance Commissioners (“NAIC”). The NAIC is currently considering a proposal, which if adopted, could materially change the sensitivity of variable annuity reserves and capital requirements to capital markets including interest rate, equity markets and volatilityprofitability of the industry and result in increased regulation and oversight for the industry. For additional information on regulatory developments and the risks we face, see “Business—Regulation” and “Risk Factors—Legal and Regulatory Risks.” in the 2021 Form 10-K.
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Inflation Reduction Act. On August 16, 2022, President Biden signed the Inflation Reduction Act into law which introduces a 15% minimum tax based on financial statement income as well as prescribed assumptionsa 1% excise tax on share buybacks, effective for policyholder behavior.tax years beginning in 2023. While neither the minimum tax nor the excise tax on share buybacks are currently expected to have a significant impact on the Company, we continue to monitor developments and regulations associated with the Inflation Reduction Act for any potential future impacts on our business, results of operations and financial condition.
Climate Risks. In addition,March 2022, the NAIC Financial Condition (E) CommitteeSEC released proposed rule changes on climate-related disclosure. The proposed rule changes would require companies to include certain climate-related disclosures including information about climate-related risks that have had or reasonably likely to have a material impact on their business, results of operations, or financial condition, and certain climate-related financial statement metrics in a note to the audited financial statements. Among other things, the required information about climate-related risks also would include disclosure of a company’s greenhouse gas emissions, information about climate-related targets and goals, and if a transition plan, has established a working groupbeen adopted as part of climate-related risk management strategy, and requires extensive attestation requirements. If adopted as proposed, the rule changes are expected to studyresult in additional compliance and address, as appropriate, regulatory issues resulting from variable annuity captive reinsurance transactions,reporting costs.
Privacy and Security of Customer Information and Cybersecurity Regulation. In March 2022, the SEC released proposed rules enhancing cybersecurity risk and management disclosure requirements for companies. If enacted, the proposed rules would, among other things, require disclosure of any material cybersecurity incident on its Form 8-K within four business days of determining that the incident it has experienced is material. They would also require periodic disclosures of, among other things, (i) details on the company’s cybersecurity policies and procedures, (ii) cybersecurity governance, oversight policies and risk management policies, including reforms that would improve the current reserve and capital framework for insurance companies that sell variable annuity products.
Departmentboard of Labor (“DOL”). In April 2016,directors’ oversight of cybersecurity risks, (iii) the DOL issued a final rule (the “Rule”), which significantly expanded the rangerelevant expertise of activities considered to be fiduciary investment advice under the Employee Retirement Income Security Act of 1974 (“ERISA”) when our advisors and our employees provide investment-related information and support to retirement plan sponsors, participants and individual retirement account (“IRA”) holders. In February 2017, the DOL was directed by memorandum (the “President’s Memorandum”) to review the Rule and determine whether the Rule should be rescinded or revised, in lightmembers of the new administration’s policiesboard of directors with respect to cybersecurity issues and orientations. The Rule(iv) details of any cybersecurity incident that was partially implementedpreviously disclosed on June 9, 2017, with a special transition period for certain requirements that took effect on January 1, 2018. On November 29, 2017, the DOL finalized a delay in implementing certain portions of the Rule from January 1, 2018 to July 1, 2019. On March 15, 2018, a federal appeals court issued a decision vacating the Rule and subsequently denied motions by the Attorneys General of three states to intervene in the case. A final mandate has not been issued as of the date of this report, and there is a possibility that the DOL may appeal this decision to the U.S. Supreme Court. At this time, we do not currently plan any immediate changes to our approach to selling products and providing services to ERISA plans and IRAs. If the Rule remains in effect, we may need to make adverse changes to the level and type of services we provideForm 8-K, as well as any undisclosed incidents that were non-material, but have become material in the natureaggregate.
In July 2022, the NYDFS proposed amendments to the New York Cybersecurity Requirements for Financial Services Companies promulgated by the NYDFS in March 2017. The amendments, if adopted, would require new reporting, governance and amountoversight measures be implemented, enhance certain cybersecurity safeguards (e.g., annual audits, vulnerability assessments, and password controls and monitoring), and mandate notifications in the event that a covered entity makes a cyber-ransom payment. The pre-proposal comment period on these draft amendments ended in August 2022, and an additional comment period is expected in the future.
Fiduciary Rules / “Best Interest” Standards of compensationConduct. The NYDFS’ amendments to Regulation 187 - Suitability and fees that weBest Interests in Life Insurance and our affiliated advisorsAnnuity Transactions (“Regulation 187”) incorporate the “best interest” standard for annuity transactions and firms receive for investment-related services to retirement plans and IRAs.
Impactthey expand the scope of the Tax Reform Act
On December 22, 2017, President Trump signed into lawregulation to include sales of life insurance policies to consumers. In April 2021, the Tax Reform Act, a broad overhaulAppellate Division of the U.S. Internal Revenue Code that changes long-standing provisions governingNew York Supreme Court overturned Regulation 187 for being unconstitutionally vague, although the taxationNew York State Court of U.S. corporations, including life insurance companies.Appeals reversed this ruling on October 20, 2022. We cannot predict whether any rules or rule amendments will be adopted by either the SEC or NYDFS, what form any such final rules may take, or what effect adoption of such rules or amendments would have on our business or compliance costs.
The Tax Reform Act reduces the federal corporate income tax rate to 21% beginning in 2018Productivity Strategies
Retirement and repeals the corporate alternative minimum tax (“AMT”) while keeping existing AMT credits. It also contains measures affecting our insurance companies, including changes to the dividends received deduction (“DRD”), insurance reserves and tax DAC, and measures affecting our international operations, such as a one-time transitional tax on some of the accumulated earningsProtection Businesses
As part of our foreign subsidiaries (within our Investment Management and Research Segment).
Ascontinuing efforts to drive productivity improvements, in January 2021, we began a result of the Tax Reform Act, we expect our Non-GAAP Operating Earnings to improve on a recurring basis due to the reduction in the effective tax rate. Our new effective tax rate isprogram expected to be approximately 19%, driven mainlyachieve $80 million of targeted run-rate expense savings by the new federal corporate tax rate2023, of 21% and the DRD benefit.
which $43 million has been achieved as of September 30, 2022. We expect the Tax Reform Act to have both positiveachieve these savings by shifting our workforce into an agile working model, leveraging technology-enabled capabilities, optimizing our real estate footprint, and negative impacts on our balance sheet. On the one hand, ascontinuing to realize a one-time effect, the lower tax rate resulted in a reduction to the valueportion of our deferred tax assets. On the other hand, the Tax Reform Act repeals the corporate AMT and, subject to certain limitations, allows us to use our AMT credits going forward, which we expect will result in a reduction of our tax liability.
In 2017, on a statutory basis, we recorded a moderate increase to our Combined risk-based capital (“RBC”) ratio as a result of the Tax Reform Act. Specifically, this was driven mainly by the benefit of the corporate AMT repeal, but partially offset by a lower statutory deferred tax asset valuation.

COVID-19 related savings.

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We expect the tax liability on the earnings of our foreign subsidiaries will decrease going forward. In 2017, we recorded a one-time decrease to net income of $23 million due to the estimated transitional tax on some of the accumulated earnings of these subsidiaries.
Overall, we expect the Tax Reform Act to have a net positive economic impact on us. We continue to evaluate this new and complicated piece of legislation, assess the magnitude of the various impacts and monitor potential regulatory changes related to this reform.
Separation Costs
In connection with the IPO and operating as a stand-alone public company, we have incurred and expect to continue to incur one-time and recurring expenses. These expenses primarily relate to information technology, compliance, internal audit, finance, risk management, procurement, client service, human resources and other support services. The process of replicating and replacing functions, systems and infrastructure provided by AXA or certain of its affiliates in order to operate on a stand-alone basis is currently underway and we expect that it will continue following the IPO.
We estimate that the aggregate amount of the one-time expenses described above will be between approximately $300 million and $350 million, of which $93 million was incurred in 2017 and approximately $150 million is expected to be incurred in 2018. Of this amount, $61.4 million and $0 million were incurred in the first quarter of 2018 and 2017, respectively. Furthermore, additional one-time expenses will be incurred when AXA ceases to own at least a majority of our outstanding common stock. See “Risk Factors” in the Prospectus for additional information.
Key Operating Measures
In addition to our results presented in accordance with U.S. GAAP, we report Non-GAAP Operating Earnings, Non-GAAP Operating ROC by segment for our Individual Retirement, Group Retirement and Protection Solutions segments,ROE, and Non-GAAP Operating Earnings per share,operating common EPS, each of which is a measure that is not determined in accordance with U.S. GAAP. Management principally uses these non-GAAP financial measures in evaluating performance because they present a clearer picture of our operating performance and they allow management to allocate resources. Similarly, management believes that the use of these non-GAAPNon-GAAP financial measures, together with relevant U.S. GAAP measures, providesprovide investors with a better understanding of our results of operations and the underlying profitability drivers and trends of our business. These non-GAAP financial measures are intended to remove from our results of operations the impact of market changes (where there is mismatch in the valuation of assets and liabilities) as well as certain other expenses which are not part of our underlying profitability drivers or likely to re-occur in the foreseeable future, as such items fluctuate from period-to-period in a manner inconsistent with these drivers. These measures should be considered supplementary to our results that are presented in accordance with U.S. GAAP and should not be viewed as a substitute for the U.S. GAAP measures. Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Consequently, our non-GAAP financial measures may not be comparable to similar measures used by other companies.
We also discuss certain operating measures, including AUM, AUA, AV, Protection Solutions Reserves and certain other operating measures, which management believes provide useful information about our businesses and the operational factors underlying our financial performance.
Non-GAAP Operating Earnings
Non-GAAP Operating Earnings is an after-tax Non-GAAPnon-GAAP financial measure used to evaluate our financial performance on a consolidated basis that is determined by making certain adjustments to our consolidated after-tax net income attributable to Holdings. The most significant of such adjustments relates to our derivative positions, which protect economic value and statutory capital, and are more sensitive to changes in market conditions than the variable annuity product liabilities as valued under U.S. GAAP. This is a large source of volatility in net income.
In the first quarter of 2018, the Company revised its Non-GAAP Operating Earnings definition as it relates to the treatment of certain elements of the profitability of its variable annuity products with indexed-linked features to align to the treatment of its variable annuity products with GMxB features. In addition, adjustments for variable annuity products with index-linked features previously included within Other adjustments in the calculation of Non-GAAP Operating Earnings are now included with the


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adjustments for variable annuity products with GMxB features in the broader adjustment category, Variable annuity product features. The presentations of Non-GAAP Operating Earnings in prior periods were revised to reflect this change in definition.
Non-GAAP Operating Earnings equals our consolidated after-tax net income attributable to Holdings adjusted to eliminate the impact of the following items:
•Items related to Variablevariable annuity product features, which includeinclude: (i) certain changes in the fair value of the derivatives and other securities we use to hedge these features andfeatures; (ii) the effect of benefit ratio unlock adjustments, including extraordinary economic conditions or events such as COVID-19; (iii) changes in the fair value of the embedded derivatives reflected within Variablevariable annuity products’ net derivative results;
results and the impact of these items on DAC amortization on our SCS product; and (iv) DAC amortization for the SCS variable annuity product arising from near-term fluctuations in index segment returns;
•Investment (gains) losses, which includes other-than-temporarycredit loss impairments of securities,securities/investments, sales or disposals of securities/investments, realized capital gains/losses and valuation allowances;
Goodwill impairment, which includes a write-down of goodwill in first quarter of 2017.
•Net actuarial (gains) losses, which includes actuarial gains and losses as a result of differences between actual and expected experience on pension plan assets or projected benefit obligation during a given period related to pension, other postretirement benefit obligations, and the one-time impact of the settlement of the defined benefit obligation;
•Other adjustments, which includesprimarily include restructuring costs related to severance lease write-offsand separation, COVID-19 related impacts, net derivative gains (losses) on certain Non-GMxB derivatives, net investment income from certain items including consolidated VIE investments, seed capital mark-to-market adjustments, unrealized gain/losses associated with equity securities, certain legal accruals; and a bespoke deal to repurchase UL policies from one entity that had invested in numerous policies purchased in the life settlement market, which disposed of the risk of additional COI litigation by that entity related to non-recurring restructuring activities,those UL policies; and separation costs; and
•Income tax expense (benefit) related to the above items and non-recurring tax items, which includes the effect of uncertain tax positions for a given audit period, permanent differences dueperiod.
In the first quarter 2022, the Company updated its Non-GAAP Operating Earnings measure to goodwill impairment,exclude the DAC amortization impact of near-term fluctuations in indexed segment returns on the SCS variable annuity product to reflect the impact of market fluctuations consistently with the long term duration of the product. For the three and nine months ended September 30, 2022, Non-GAAP Operating Earnings was favorably impacted by this change in the Tax Reform Act.amount of $24 million and $94 million for the three and nine months ended September 30, 2022, respectively. The presentation of Non-GAAP Operating Earnings in prior periods was not revised to reflect this modification, however, the Company estimated that had the treatment in
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the Company’s Non-GAAP Operating Earnings measure of the Amortization of DAC for SCS been modified in 2020, the pre-tax impact on Non-GAAP Operating Earnings of excluding the SCS-related DAC amortization from Non-GAAP Operating Earnings would have been an increase of $7 million for the three months ended September 30, 2021, and a decrease of $7 million, $16 million and $34 million for the nine months ended September 30, 2021, and years ended December 31, 2021 and 2020, respectively.
Because Non-GAAP Operating Earnings excludes the foregoing items that can be distortive or unpredictable, management believes that this measure enhances the understanding of the Company’s underlying drivers of profitability and trends in our business, thereby allowing management to make decisions that will positively impact our business.
We use ourthe prevailing corporate federal income tax rate of 21% in 2018 and 35% in 2017, while taking into account any non-recurring differences for events recognized differently in our financial statements and federal income tax returns as well as partnership income taxed at lower rates when reconciling Net income (loss) attributable to Holdings to Non-GAAP Operating Earnings.


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The table below presents a reconciliation of Netnet income (loss) attributable to Holdings to Non-GAAP Operating Earnings for the three and nine months ended March 31, 2018September 30, 2022 and 2017:2021:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Net income (loss) attributable to Holdings$273 $672 $2,574 $(693)
Adjustments related to:
Variable annuity product features(114)172 (2,639)3,632 
Investment (gains) losses333 (164)890 (767)
Net actuarial (gains) losses related to pension and other postretirement benefit obligations19 27 57 87 
Other adjustments (1) (2) (3)39 141 407 672 
Income tax expense (benefit) related to above adjustments(59)(35)270 (761)
Non-recurring tax items7 5 13 6 
Non-GAAP Operating Earnings$498 $818 $1,572 $2,176 
 Three Months Ended
March 31,
 2018 2017
 (in millions)
Net income (loss) attributable to Holdings$168
 $(290)
Adjustments related to:   
Variable annuity product features (1)
212
 291
Investment (gains) losses(102) 24
Goodwill impairment—
 369
Net actuarial (gains) losses related to pension and other postretirement benefit obligations131
 34
Other adjustments90
 (21)
Income tax expense (benefit) related to above adjustments(63) (235)
Non-recurring tax items28
 132
Non-GAAP Operating Earnings$464
 $304
______________
(1)    This reconciling item was previously referred to as “GMxB product features”, but is now referred to more broadly as “Variable annuity product features.” See Note 15Includes Separation Costs of $25 million and $62 million for the three months and nine months ended September 30, 2021, respectively. Separation costs were completed during 2021.
(2)Includes certain gross legal expenses related to the Notescost of insurance litigation of $2 million and $0 million, $168 million and $180 million for the three and nine months ended September 30, 2022 and 2021, respectively. Includes policyholder benefit costs of $0 million and $75 million for the three and nine months ended September 30, 2022 stemming from a deal to Consolidated Financial Statementsrepurchase UL policies from one entity that had invested in numerous policies purchased in the life settlement market.
(3)Includes Non-GMxB related derivative hedge losses of ($28) million, ($4) million, ($68) million and $140 million for details of adjustments related to Variable annuity product features.the three and nine months ended September 30, 2022 and 2021, respectively.


Non-GAAP Operating ROC by SegmentROE
We report Non-GAAP Operating ROC by segment for our Individual Retirement, Group Retirement and Protection Solutions segments, which is a non-GAAP financial measure used to evaluate our recurrent profitability on a consolidated basis and by segment, respectively. We calculate Non-GAAP Operating ROC by segmentROE by dividing operating earnings (loss) on a segment basisNon-GAAP Operating Earnings for the previous twelve calendar months by consolidated average capital on a segment basis,equity attributable to Holdings’ common shareholders, excluding AOCI and NCI, as described below.AOCI. AOCI fluctuates period-to-period in a manner inconsistent with our underlying profitability drivers as the majority of such fluctuation is related to the market volatility of the unrealized gains and losses associated with our available for sale (“AFS”)AFS securities. Therefore, we believe excluding AOCI is more effective infor analyzing the trends of our operations. We do not calculate Non-GAAP Operating ROC by segment for our Investment Management & Research segment because we do not manage that segment from a return of capital perspective. Instead, we use metrics more directly applicable to an asset management business, such as AUM, to evaluate and manage that segment. For Non-GAAP Operating ROC by segment, capital components pertaining directly to specific segments such as DAC along with targeted capital are directly attributed to these segments. Targeted capital for each segment is established using assumptions supporting statutory capital adequacy levels necessary to be considered a going concern. To enhance the ability to analyze these measures across periods, interim periods are annualized. Non-GAAP Operating ROC by segment should not be used as a substitute for ROE.


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The following table sets forthpresents return on average equity attributable to Holdings’ common shareholders, excluding AOCI and Non-GAAP Operating ROC by segment for our Individual Retirement, Group Retirement and Protection Solutions segmentsROE for the trailing twelve months ended March 31, 2018.September 30, 2022.
Trailing Twelve Months Ended September 30, 2022
(in millions)
Net income (loss) available to Holdings’ common shareholders$2,748
Average equity attributable to Holdings’ common shareholders, excluding AOCI$8,844
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 Trailing Twelve Months Ended March 31, 2018
 Individual Retirement Group Retirement Protection Solutions
 (in millions)
Operating earnings$1,483
 $298
 $521
Average capital(1)
6,925
 1,262
 2,674
Non-GAAP Operating ROC21.4% 23.6% 19.5%
Trailing Twelve Months Ended September 30, 2022
(in millions)
Return on average equity attributable to Holdings’ common shareholders, excluding AOCI31.1%
(1)Non-GAAP Operating Earnings available to Holdings’ common shareholdersFor average capital amounts by segment, capital components pertaining directly$2,141
Average equity attributable to specific segments such as DAC along with targeted capital are directly attributed to these segments. Targeted capital for each segment is established using assumptions supporting statutory capital adequacy levels necessary to be considered a going concern.Holdings’ common shareholders, excluding AOCI$8,844
Non-GAAP Operating ROE24.2%
Non-GAAP Operating Earnings per ShareCommon EPS
Non-GAAP Operatingoperating common EPS is calculated by dividing Non-GAAP Operating Earnings by endingdiluted common shares outstanding - diluted.outstanding. The following table sets forth Non-GAAP Operatingoperating common EPS for the three and nine months ended March 31, 2018September 30, 2022 and 2017.2021.
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(per share amounts)
Net income (loss) attributable to Holdings (1)$0.72 $1.62 $6.72 $(1.64)
Less: Preferred stock dividends0.03 0.03 0.14 0.12 
Net income (loss) available to Holdings’ common shareholders0.69 1.59 6.58 (1.76)
Adjustments related to:
Variable annuity product features(0.31)0.41 (6.89)8.58 
Investment (gains) losses0.87 (0.41)2.32 (1.81)
Net actuarial (gains) losses related to pension and other postretirement benefit obligations0.05 0.07 0.15 0.21 
Other adjustments (2) (3) (4)0.12 0.35 1.06 1.59 
Income tax expense (benefit) related to above adjustments(0.16)(0.08)0.71 (1.80)
Non-recurring tax items0.02 0.01 0.03 0.01 
Non-GAAP operating common EPS$1.28 $1.94 $3.96 $5.02 
 Three Months Ended March 31,
 2018 2017
 (per share amounts)
Net income (loss) attributable to Holdings$0.30
 $(0.52)
Adjustments related to:   
Variable annuity product features0.38
 0.52
Investment (gains) losses(0.18) 0.04
Goodwill impairment—
 0.66
Net actuarial (gains) losses related to pension and other postretirement benefit obligations0.23
 0.06
Other adjustments0.16
 (0.04)
Income tax expense (benefit) related to above adjustments(0.11) (0.42)
Non-recurring tax items0.05
 0.24
Non-GAAP Operating Earnings$0.83
 $0.54
______________
(1)For periods presented with a net loss, basic shares are used for EPS .
(2)Includes separation costs of $0.06 and $0.15 for the three months and nine months ended September 30, 2021, respectively.
(3)Includes certain gross legal expenses related to the cost of insurance litigation of $0.01, $0.00, $0.44 and $0.43 for the three and nine months ended September 30, 2022 and2021, respectively. Includes policyholder benefit costs of $0.00 and $0.20 for the three and nine months ended September 30, 2022 stemming from a deal to repurchase UL policies from one entity that had invested in numerous policies purchased in the life settlement market.
(4)Includes Non-GMxB related derivative hedge losses of ($0.07), ($0.01), ($0.18) and $0.31 for the three and nine months ended September 30, 2022 and 2021, respectively.
Assets Under Management (“AUM”)
AUM means investment assets that are managed by one of our subsidiaries and includes: (i) assets managed by AB,AB; (ii) the assets in our GAIA portfolioGeneral Account investment portfolio; and (iii) the Separate AccountAccounts assets of our Individual Retirement, Group Retirement and Protection Solutions businesses. Total AUM reflects exclusions between segments to avoid double counting.
Assets Under Administration (“AUA”)
AUA includes non-insurance client assets that are invested in our savings and investment products or serviced by our AXAEquitable Advisors platform. We provide administrative services for these assets and generally record the revenues received as distribution fees.


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Account Value (“AV”)
AV generally equals the aggregate policy account value of our retirement products. General Account AV refers to account balances in investment options that are backed by the General Account while Separate AccountAccounts AV refers to Separate AccountAccounts investment assets.
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Protection Solutions Reserves
Protection Solutions Reserves equals the aggregate value of Policyholders’policyholders’ account balances and Futurefuture policy benefits for policies in our Protection Solutions segment.
Consolidated Results of Operations
Our consolidated results of operations are significantly affected by conditions in the capital markets and the economy because we offer variable annuity products with GMxB features.market sensitive products. These products have been a significant driver of our results of operations. Because the future claims exposure on these products is sensitive to movements in the equity markets and interest rates, we have in place various hedging and reinsurance programs that are designed to mitigate the economic risksrisk of movements in the equity markets and interest rates. The volatility in Netnet income attributable to Holdings for the periods presented below results from the mismatch betweenbetween: (i) the change in carrying value of the reserves for GMDB and certain GMIB features that do not fully and
immediately reflect the impact of equity and interest market fluctuations andfluctuations; (ii) the change in fair value of products with the GMIB feature that hashave a no-lapse guarantee,guarantee; and (iii) our hedging and reinsurance programs.
AsOwnership and Consolidation of March 31, 2018 and March 31, 2017, our economic interest in AB was approximately 46.5% and 45.8%, respectively. On April 23, 2018, Holdings purchased (i) 8,160,000 AB Units from Coliseum Reinsurance Company and (ii) all of the issued and outstanding shares of common stock of AXA-IM Holding U.S., Inc., which owns directly 41,934,582 AB Units. As a result of these transactions (collectively, the “AB Reorganization Transactions”), at April 30, 2018, the Company’s economic interest in AB was approximately 65%.AllianceBernstein
Our indirect, wholly ownedwholly-owned subsidiary, AllianceBernstein Corporation, is the General Partner of AB. Accordingly, AB is consolidated in our financial statements, and itsAB’s results are fully reflected in our consolidated financial statements.

Our economic interest in AB was approximately 64% and 65% during the three months ended September 30, 2022 and 2021, and approximately 65% during the nine months ended September 30, 2022 and 2021. The slight decrease in economic interest was due to the issuance of AB Units relating to AB’s 100% acquisition of CarVal. On July 1, 2022, AB issued 3.2 million AB Units (with a fair value of $133 million) and recorded a $419 million liability for the issuance of additional AB Units on November 1, 2022. AB also recorded a contingent consideration payable of $227 million (to be paid predominantly in AB Units) based on CarVal achieving certain performance objectives over a six-year period ending December 31, 2027. The issuance of the AB Units is not expected to have a significant impact on Non-GAAP Operating Earnings and Net Income.

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TableConsolidated Results of Contents

Operations
The following table summarizes our consolidated statements of income (loss) for the three and nine months ended March 31, 2018September 30, 2022 and 2017:2021:
Consolidated Statement of Income (Loss)
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions, except per share data)
REVENUES
Policy charges and fee income$796 $867 $2,449 $2,755 
Premiums259 230 744 729 
Net derivative gains (losses)68 (185)3,118 (3,930)
Net investment income (loss)842 997 2,357 2,914 
Investment gains (losses), net:
Credit losses on available-for-sale debt securities and loans(267)(2)(266)4 
Other investment gains (losses), net(65)165 (624)763 
Total investment gains (losses), net(332)163 (890)767 
Investment management and service fees1,179 1,323 3,731 3,898 
Other income197 220 612 585 
Total revenues3,009 3,615 12,121 7,718 
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 Three Months Ended March 31,
 2018 2017
 (in millions, except earnings per share amounts)
REVENUES   
Policy charges and fee income$972
 $956
Premiums279
 281
Net derivative gains (losses)(281) (235)
Net investment income (loss)591
 780
Investment gains (losses), net:   
Total other-than-temporary impairment losses—
 (1)
Other investment gains (losses), net102
 (23)
Total investment gains (losses), net102
 (24)
Investment management and service fees1,055
 954
Other income117
 118
Total revenues2,835
 2,830
BENEFITS AND OTHER DEDUCTIONS   
Policyholders’ benefits608
 1,093
Interest credited to policyholders’ account balances271
 246
Compensation and benefits (includes $40 and $41 of deferred acquisition costs)620
 539
Commissions and distribution related payments (includes $120 and $132 of deferred acquisition costs)411
 395
Interest expense46
 35
Amortization of deferred policy acquisition costs, net (net of capitalization of $160 and $173)15
 (55)
Other operating costs and expenses494
 744
Total benefits and other deductions2,465
 2,997
Income (loss) from continuing operations, before income taxes370
 (167)
Income tax (expense) benefit(79) (30)
Net income (loss)291
 (197)
Less: net (income) loss attributable to the noncontrolling interest(123) (93)
Net income (loss) attributable to Holdings$168
 $(290)
EARNINGS PER SHARE   
Earnings per share - Common stock   
Basic$0.30
 $(0.52)
Diluted$0.30
 $(0.52)
Weighted average common shares outstanding561
 561



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Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions, except per share data)
BENEFITS AND OTHER DEDUCTIONS
Policyholders’ benefits625 751 2,599 2,518 
Interest credited to policyholders’ account balances378 305 1,002 905 
Compensation and benefits566 614 1,679 1,762 
Commissions and distribution-related payments368 436 1,184 1,215 
Interest expense51 59 148 184 
Amortization of deferred policy acquisition costs105 64 446 257 
Other operating costs and expenses497 456 1,617 1,511 
Total benefits and other deductions2,590 2,685 8,675 8,352 
Income (loss) from continuing operations, before income taxes419 930 3,446 (634)
Income tax (expense) benefit(92)(165)(707)222 
Net income (loss)327 765 2,739 (412)
Less: Net income (loss) attributable to the noncontrolling interest54 93 165 281 
Net income (loss) attributable to Holdings273 672 2,574 (693)
Less: Preferred stock dividends14 14 54 53 
Net income (loss) available to Holdings’ common shareholders$259 $658 $2,520 $(746)
EARNINGS PER COMMON SHARE
Net income (loss) applicable to Holdings’ common shareholders per common share:
Basic$0.69 $1.60 $6.62 $(1.76)
Diluted$0.69 $1.59 $6.58 $(1.76)
Weighted average common shares outstanding (in millions):
Basic374.5 411.3 380.6 423.2 
Diluted376.8 414.6 382.9 423.2 
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Non-GAAP Operating Earnings$498 $818 $1,572 $2,176 
 Three Months Ended March 31,
 2018 2017
 (in millions, except earnings per share amounts)
 Non-GAAP Operating Earnings$464
 $304
Non-GAAP Operating Earnings per share, Basic$0.83
 $0.54
Non-GAAP Operating Earnings per share, Diluted$0.83
 $0.54

The following discussion compares the resultstable summarizes our Non-GAAP Operating Earnings per common share for the three and nine months ended March 31, 2018 comparedSeptember 30, 2022 and 2021:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Non-GAAP operating earnings per common share:
Basic$1.29 $1.95 $3.99 $5.02 
Diluted$1.28 $1.94 $3.96 $5.02 

Three Months Ended September 30, 2022 Compared to the comparable 2017 period’s results.
First Quarter 2018 Compared to First Quarter 2017Three Months Ended September 30, 2021
Net Income Attributable to Holdings
The $458 million increase in Net income attributable to Holdings decreased by $399 million, to $168a net income of $273 million for the first quarter of 2018three months ended September 30, 2022 from a Net lossnet income of $290$672 million in the three months ended September 30, 2021. The following notable items were the primary drivers for the first quarterchange in net income (loss):
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Table of 2017, was primarily driven by the following notable items:Contents
Policyholders’ benefitsUnfavorable items included:
•Investment gains decreased by $485$495 million primarilymainly due to a $441AFS fixed maturities in an unrealized loss position in anticipation of the EQUI-VEST Transaction and rebalancing program to reduce duration during 2022.
•Fee-type revenue decreased by $209 million decrease in our Individual Retirement segment's GMxB reserves not carried at fair value, reflecting positive movement in interest rates in the first quarter of 2018 compared to the first quarter of 2017. The net improvement in GMxB margins was primarilymainly driven by lower hedging losses related toaverage Separate Accounts AV within our Individual and Group Retirement segments as a result of lower equity (in the first quarter of 2017 equity market strongly increased while it slightly decreasedmarkets, and lower advisory base fees, Bernstein Research Services revenues and distribution revenues in the first quarter of 2018) and reserve strengthening in 2017. The $41 million decrease in Corporate and Other was mainly driven by favorable claims experience in our Closed Block and assumed reinsurance block.
Other investment gains increased by $125 million, primarily due to the sale of fixed maturity securities, mainly U.S. Treasury securities.
Investment management and service fees increased by $102 million mainly driven by our Investment Management and Research segment mainlyprimarily resulting from lower average AUM due to higher base fees reflecting an increase in average AUM of 13% and a 2% increase in the overall portfolio return rate.
market depreciation.
Policy charges and fee•Net investment income increased by $16 million due to higher average account values from net flows and higher equity markets.
Other operating costs and expenses decreased by $250$155 million mainly due to a $369 million non-recurring goodwill impairment chargelower alternative investment income, lower prepayments, and lower income from seed capital investments (offset by hedging gains in the first quarter of 2017 resulting from the Company’s adoption of new accounting guidance for goodwill on January 1, 2017, partlyderivatives), partially offset by higher IPO related separation costs.income from floating rate securities, higher asset balances and GA optimization.
Partially offsetting this increase were the following notable items:
Decrease in Net investment income of $189 million, mainly due to a change in market value of trading securities primarily driven by an increase in interest rates.
Amortization of deferred acquisition costs, net increased by $70 million, mainly driven by our Protection Solutions and Individual Retirement segments, and Corporate and Other. DAC amortization in the Protection Solutions segment increased by $38 million, due to a $40 million increase in amortization before capitalization as we have remained in a loss recognition position in the first quarter of 2018 (loss recognition position started in the fourth quarter of 2017), which results in higher amortization. DAC amortization in our Individual Retirement segment was $13 million higher mainly due to $15 million lower capitalization due to a shift in sales towards SCS.
•Interest credited to policyholders’ account balances increased by $25$73 million mainly drivendue to growth of SCS AV and increase in interest rates and average outstanding amounts of funding agreements during third quarter of 2022 compared to the third quarter 2021.
•Amortization of DAC increased by $41 million mainly due to equity market depreciation and less favorable assumption updates during the third quarter 2022 compared to the third quarter 2021.
These were partially offset by the following favorable items:
•Net derivative gains increased by $253 million from a $185 million loss from prior period due to equity market depreciation and more favorable assumption updates in the third quarter 2022 versus the prior period quarter partially offset by impacts from rising interest rate increases.
•Policyholders’ benefits decreased by $126 million mainly due to more favorable assumption updates in third quarter 2022 compared to third quarter 2021 partially offset by equity market depreciation during the third quarter 2022 compared to equity market appreciation during the third quarter 2021 (offset in Net Derivative gains) and higher SCSbenefits due to strong growth in Employee Benefits.
•Commissions and distribution-related payments decreased by $68 million mainly due to lower payments to financial intermediaries for the distribution of AB mutual funds in our Investment Management and Research segment and lower AV in our Individual Retirement segment related to equity market depreciation.
•Net income attributable to noncontrolling interest decreased by $39 million mainly due to lower AB pre-tax income and Corporateconsolidated VIE losses during the third quarter 2022.
•Income tax expense decreased by $73 million mainly due to a decrease in pre-tax income in the third quarter 2022, partially offset by a higher effective tax rate.
Non-GAAP Operating Earnings
Non-GAAP Operating Earnings decreased by $319 million to $498 million for the three months ended September 30, 2022 from $818 million in the three months ended September 30, 2021. The following notable items were the primary drivers for the change in Non-GAAP Operating Earnings:
Unfavorable items included:
•Fee-type revenue decreased by $214 million mainly due to lower average Separate Accounts AV within our Individual and Other.
Group Retirement segments as a result of lower equity markets, and lower advisory base fees, Bernstein Research Services revenues and distribution revenues in our Investment Management and Research segment primarily resulting from lower average AUM due to market depreciation.

•Net investment income decreased by $163 million mainly due to lower alternative investment income, lower prepayments and lower income from seed capital investments (offset by hedging gains in derivatives), partially offset by higher income from floating rate securities and higher income from new investment yields.
•Interest credited to policyholders’ account balances increased by $73 million mainly due to growth of SCS AV and increase in interest rates and average outstanding amounts of funding agreements during third quarter 2022 compared to the third quarter 2021.

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Net derivative losses•Policyholders’ benefits increased by $46 million drivenmainly due to equity market depreciation during the third quarter 2022 compared to equity market appreciation during the third quarter 2021 (offset in Net Derivative gains), higher benefits due to strong growth in Employee Benefits partially offset by highermore favorable assumption updates in third quarter 2022 compared to third quarter 2021.
•Amortization of DAC increased by $30 million mainly due to equity market depreciation and less favorable assumption updates during the third quarter 2022 compared to the third quarter 2021.
•Compensation, benefits and other operating costs and expenses increased by $24 million mainly due to unfavorable COLI impacts.
These were partially offset by the following favorable items:
•Net derivative gains increased by $82 million from a $64 million gain in the prior period mainly due to equity market depreciation (offset in Policyholder’s benefits) during third quarter 2022 partially offset by inflation related hedging losses on TIPS.
•Commissions and distribution-related payments decreased by $68 million mainly due to lower AV in our GMxB book carried at fair valueIndividual Retirement segment related to equity market depreciation and a changelower payments to financial intermediaries for the distribution of AB mutual funds within our Investment Management and Research segment,
•Earnings attributable to the noncontrolling interest decreased by $24 million mainly due to lower Operating earnings in market value of our freestanding derivatives.
Investment Management and Research segment.
•Income tax expense increaseddecreased by $49$48 million driven by an increaselower pre-tax earnings,

Nine Months Ended September 30, 2022 Compared to the Nine Months Ended September 30, 2021
Net Income Attributable to Holdings
Net loss attributable to Holdings increased by $3.3 billion to a net income of $2.6 billion for the nine months ended September 30, 2022 from a net loss of $693 million for the nine months ended September 30, 2021. The following notable items were the primary drivers for the change in pre-tax earningsnet income (loss):
Favorable items included:
•Net derivative gains increased $7.0 billion from a $3.9 billion loss in prior period driven by reduced interest rate derivative positions and equity market depreciation during 2022 as compared to 2021.
•Commissions and distribution-related payments decreased by $31 million mainly due to lower AV in our Individual Retirement segment related to equity market depreciation and lower payments to financial intermediaries for the distribution of AB mutual funds within our Investment Management and Research segment, partially offset by agrowth in broker dealer sales and higher sales of Employee Benefits products in our Protection Solutions segment.
•Net income attributable to noncontrolling interest decreased by $116 million mainly due to losses from AB’s consolidated VIEs and lower effective tax rateAB pre-tax income.
These were partially offset by the following unfavorable items:
•Investment gains decreased by $1.7 billion mainly due to AFS fixed maturities in an unrealized loss position in anticipation of the EQUI-VEST Transaction and prior year rebalancing in the General Account portfolio associated with the Venerable Transaction and the rebalancing program to reduce duration during 2022.
•Net investment income decreased by $557 million mainly due to lower alternative investment income, lower prepayments, lower assets due to the Tax Reform Actprior year Venerable Transaction, and lower income from seed capital investments (offset by hedging gains in derivatives), partially offset by higher income from floating rate securities, higher income from TIPS (offset in inflation related hedging losses) and GA optimization.
•Fee-type revenue decreased by $431 million mainly driven by lower fees in our Individual Retirement segment as well as the permanent differencesa result of a one-time goodwill impairmentlower equity markets and fee-income ceded to Venerable partially offset by higher premiums due to growth in the first quarterEmployee Benefits (offset in Policyholder’s benefits).
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•Amortization of DAC increased by $189 million mainly due to equity market depreciation and less favorable assumption updates during 2022 compared to 2021.
Compensation•Interest credited to policyholders’ account balances increased by $97 million mainly due to growth of SCS AV and increase in interest rates and average outstanding amounts of funding agreements during 2022.
•Policyholders’ benefits increased by $81 million mainly due to the settlement of the pension benefit obligation of $100 million.
Non-GAAP Operating Earnings
Non-GAAP Operating Earnings increased by $160 millionequity market depreciation during 2022 compared to $464 millionequity market appreciation during the first quarter of 2018 from $304 million2021 (offset in the first quarter of 2017, primarily driven by the following notable items:
Policyholders’ benefits decreased by $500 million primarily due to a $456 million decreaseNet Derivative gains), higher claims in our Individual Retirement segment partially offset by more favorable assumption updates during 2022 and a $41impact of the Venerable Transaction on GMxB reserve accrual.
•Compensation, benefits and other operating expenses increased by $23 million decrease in Corporate and Other. The improvement in Individual Retirement was mainly driven by a $462 million decrease in GMxB reserves due to higher interest ratesgeneral and administrative expenses in the first quarter of 2018, offset by $384 million higher GMxB derivatives losses included in Investment gains (losses). The net improvement in GMxB margins was primarily driven by reserve strengthening in 2017. The $41 million improvement in Corporate and Other was mainly from favorable claims experience in our Closed Block and assumed reinsurance block.
Investment management and service fees increased by $179 million mainly driven by our Investment Management and Research segment, unfavorable COLI impacts related to 2022 equity markets and higher consulting expenses partially offset by lower fund expenses from lower average assets due to the Venerable Transactions and lower separation expenses and legal reserve accruals.
•Income tax expense increased by $929 million primarily due to pre-tax income in the nine months ended 2022 compared to a pre-tax loss in the nine months ended 2021, partially offset by higher effective tax rate.
See “—Significant Factors Impacting Our Results—Effect of Assumption Updates on Operating Results” for more information regarding assumption updates.
Non-GAAP Operating Earnings
Non-GAAP Operating Earnings decreased by $604 million to $1.6 billion for the nine months ended September 30, 2022 from $2.2 billion in the nine months ended September 30, 2021. The following notable items were the primary drivers for the change in Non-GAAP Operating Earnings.
Unfavorable items included:
•Fee-type revenue decreased by $432 million mainly due to lower fees in our Individual Retirement segment as a result of lower equity markets and fee-income ceded to Venerable partially offset by higher base fees reflecting an increase in average AUM of 13% and a 2% increase in the overall portfolio return rate.
Policy charges, fee income and premiums increased by $13 million, due to higher average AV from net flows and higher equity markets.growth in Employee Benefits (offset in Policyholder’s benefits).
•Net investment income decreased by $415 million mainly due to lower alternative investment income, lower prepayments, lower assets due to the prior year Venerable Transaction, and lower income from seed capital investments (offset by hedging gains in derivatives) partially offset by higher income from floating rate securities and TIPS (offset in inflation related hedging losses) and GA optimization.
•Policyholders’ benefits increased by $13$318 million mainly due to the GA portfolio rebalancing.
Partially offsetting this increase were the following notable items:
Interest expense increased by $14 million, primarily driven by higher cost of borrowings through securities repurchase agreementsequity market depreciation during 2022 compared to equity market appreciation during 2021 (offset in Net Derivative gains) and higher interest ratesclaims in floating rate internal debt.
AmortizationIndividual Retirement segment partially offset by the impact of DAC, net increased by $52 million, mainly due tothe Venerable Transaction on GMxB reserve accrual and lower mortality and lower accrual of PFBL reserves in our Protection Solutions and Individual Retirement segments. DAC amortization in the Protection Solutions segment increased by $42 million, due to a $44 million increase in amortization before capitalization, as we have remained in a loss recognition position in the first quarter of 2018 (loss recognition position started in the fourth quarter of 2017), which results in higher amortization. DAC amortization in our Individual Retirement segment was $7 million higher mainly due to $15 million lower capitalization due to a shift in sales towards SCS.
segment.
Higher •Compensation, benefits and other operating cost of $77costs and expenses increased by $127 million mainly due to an increase of $67 millionhigher general and administrative expenses in theour Investment Management &and Research segment, including $43 millionunfavorable COLI impacts related to the impact of adopting the new revenue recognition standard (ASC 606) in 2018, higher promotion and servicing of $17 million, higher incentive compensation2022 equity market depreciation and higher base compensation, which resultedconsulting expenses partially offset by lower fund expenses from higher fringe benefits and higher commissions. Other operating expenses excludinglower average assets due to the Investment Management & Research segment were slightly lower resulting from productivity programs.
Venerable Transaction.
•Interest credited to policyholders’ account balances increased by $25$97 million mainly from higherdue to an increase in interest rates and average outstanding amounts of funding agreements and the growth of SCS AV during 2022.
•Amortization of DAC increased by $99 million mainly due to equity market depreciation and less favorable assumption updates during 2022 compared to 2021.
These were partially offset by the following favorable items:
•Net derivative gains increased $692 million from a $114 million loss in the prior period mainly due to equity markets depreciation (offset in Policyholders’ benefits) during 2022.
•Earnings attributable to the noncontrolling interest decreased by $43 million mainly due to lower Operating earnings in our Investment Management and Research segment.
•Commissions and distribution-related payments decreased by $31 million mainly due to lower AV in our Individual Retirement segment related to equity market depreciation and from Corporate and Other.lower payments to financial intermediaries for the
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distribution of AB mutual funds within our Investment Management and Research segment, partially offset by growth in broker dealer sales and higher sales of Employee Benefits products in our Protection Solutions segment.
•Income tax expense decreased by $20$103 million mainly driven by a lower pre-tax earnings, partially offset by higher effective tax rate due to the Tax Reform Act.rate.



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Results of Operations by Segment
We manage our business through the following four segments: Individual Retirement, Group Retirement, Investment Management and Research, and Protection Solutions. We report certain activities and items that are not included in our four segments in Corporate and Other. The following section presents our discussion of Operatingoperating earnings (loss) by segment and AUM, AV and AVProtection Solutions Reserves by segment, as applicable. Consistent with U.S. GAAP guidance for segment reporting, operating earnings (loss) is our U.S. GAAP measure of segment performance. See Note 1514 of the Notes to the Consolidated Financial Statements for further information on the Company’sour segments.
For interim reporting periods in 2018 and 2017, the Company calculates income tax expense using an estimated annual effective tax rate (“ETR”), with discrete items recognized in the period in which they occur. The tax expense calculated using the ETR is allocated to the Company’s business segments based on the proportion of each segment’s pre-tax Operating earnings (loss) to Non-GAAP Operating Earnings. Each business segment is also allocated its portion of any permanent tax items.
The following table summarizes Operatingoperating earnings (loss) by segmenton our segments and Corporate and Other for the three and nine months ended March 31, 2018September 30, 2022 and 2017:2021:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Operating earnings (loss) by segment:
Individual Retirement$270 $316 $837 $1,093 
Group Retirement134 192 415 514 
Investment Management and Research94 134 330 381 
Protection Solutions72 160 208 264 
Corporate and Other(72)16 (218)(76)
Non-GAAP Operating Earnings$498 $818 $1,572 $2,176 
Effective Tax Rates by Segment
 Three Months Ended March 31,
 2018 2017
 (in millions)
Operating earnings (loss):   
Individual Retirement$360
 $202
Group Retirement76
 59
Investment Management and Research81
 32
Protection Solutions23
 39
Total segment operating earnings540
 332
Corporate and Other(76) (28)
 Non-GAAP Operating Earnings$464
 $304
Income tax expense is calculated using the ETR and then allocated to our business segments using an 19% ETR for our retirement and protection businesses (Individual Retirement, Group Retirement, and Protection Solutions) and a 27% ETR for Investment Management and Research.



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Individual Retirement
The Individual Retirement segment includes our variable annuity products which primarily meet the needs of individuals saving for retirement or seeking retirement income.
The following table summarizes Operatingoperating earnings of our Individual Retirement segment for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Operating earnings$270 $316 $837 $1,093 


Key components of operating earnings are:
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Three Months Ended September 30,Nine Months Ended September 30,
Three Months Ended March 31,2022202120222021
2018 2017(in millions)
(in millions)
Operating earnings$360
 $202
   
Key components of Operating earnings are:   
   
REVENUES   REVENUES
Policy charges, fee income and premiums$540
 $519
Policy charges, fee income and premiums$385 $439 $1,152 $1,457 
Net investment income228
 177
Net investment income348 296 933 972 
Investment gains (losses), net including derivative gains (losses)(227) 140
Net derivative gains (losses)Net derivative gains (losses)140 77 514 (51)
Investment management, service fees and other income188
 183
Investment management, service fees and other income144 186 462 579 
Segment revenues729
 1,019
Segment revenues$1,017 $998 $3,061 $2,957 
BENEFITS AND OTHER DEDUCTIONS   BENEFITS AND OTHER DEDUCTIONS
Policyholders’ benefits5
 461
Policyholders’ benefits$300 $272 $998 $641 
Interest credited to policyholders’ account balances59
 47
Interest credited to policyholders’ account balances101 70 255 205 
Commissions and distribution related payments(1)
144
 158
Amortization of deferred policy acquisition costs, net(2)
(47) (54)
Compensation, benefits, interest expense and other operating costs and expenses(3)
121
 128
Commissions and distribution-related paymentsCommissions and distribution-related payments61 89 208 245 
Amortization of deferred policy acquisition costsAmortization of deferred policy acquisition costs109 88 292 239 
Compensation, benefits and other operating costs and expensesCompensation, benefits and other operating costs and expenses105 96 272 307 
Interest expenseInterest expense— — — — 
Segment benefits and other deductions$282
 $740
Segment benefits and other deductions$676 $615 $2,025 $1,637 
(1) Includes $72 million and $84 million of deferred policy acquisition costs.
(2) Net of capitalization of $87 million and $102 million.
(3) Includes $15 million and $18 million of deferred policy acquisition costs.


The following table summarizes AV for our Individual Retirement segment as of the dates indicated:
September 30, 2022December 31, 2021
(in millions)
AV (1)
General Account$35,509 $37,698 
Separate Accounts55,013 74,206 
Total AV$90,522 $111,904 
 March 31,
2018		 December 31,
2017
 (in millions)
AV   
General Account$19,480
 $19,059
Separate Accounts82,310
 84,364
Total AV$101,790
 $103,423


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reinsurance.
The following table summarizes a roll forwardroll-forward of AV for our Individual Retirement segment for the periods indicated:presented:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Balance as of beginning of period$94,263 $108,435 $111,904 $117,390 
Gross premiums3,083 2,848 9,065 8,138 
Surrenders, withdrawals and benefits(2,318)(2,835)(7,614)(8,819)
Net flows (1)765 13 1,451 (681)
Investment performance, interest credited and policy charges(4,506)(697)(22,833)7,912 
Ceded to Venerable (2)— — — (16,927)
Other (3) (4)— (38)— 19 
Balance as of end of period$90,522 $107,713 $90,522 $107,713 
______________
(1)For the three and nine months ended September 30, 2022 and 2021, net flows of $(258) million, $(322) million, $(840) million and $(442) million and investment performance, interest credited and policy charges of $(721) million, $(273) million, $(4,108) million and $(125) million, respectively, are excluded as these amounts are related to ceded AV to Venerable.
(2)Effective June 1, 2021, AV excludes activity related to ceded AV to Venerable. In addition, roll-forward reflects the AV ceded to Venerable as of the transaction date. For additional information on the Venerable Transaction see Note 1 of the Notes to Consolidated Financial Statements.
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 March 31,
2018		 March 31,
2017
 (in millions)
Balance as of beginning of period$103,423
 $93,604
Gross premiums1,787
 2,010
Surrenders, withdrawals and benefits(2,249) (1,797)
Net flows(462) 213
Investment performance, interest credited and policy charges(1,171) 2,862
Balance as of end of period$101,790
 $96,679
(3)For the three months and nine months ended September 30, 2021 amounts reflect $(38) million transfer of policyholders account balances to future policyholder benefits and other policyholders liabilities related to structured settlement contracts.
First Quarter(4)For the nine months ended September 30, 2021, amounts reflect $57 million of 2018AV transfer of a closed block of GMxB business from GR to IR.
Three Months Ended September 30, 2022 Compared to First Quarter of 2017the Three Months Ended September 30, 2021 for the Individual Retirement Segment
Operating earnings
Operating earnings increased $158decreased $46 million to $360$270 million during the three months ended September 30, 2022 from $316 million in the first quarterthree months ended September 30, 2021. The following notable items were the primary drivers of 2018 from $202 millionthe change in the first quarter of 2017 primarily attributable to the following:operating earnings:
A net increase in Operating earnings of $78Unfavorable items included:
•Fee-type revenue decreased by $90 million due to lower average Separate Accounts AV as result of equity market depreciation.
•Interest credited to policyholders’ account balances increased by $31 million mainly due to the growth of SCS AV during third quarter 2022.
•Amortization of DAC increased by $21 million mainly driven by equity market depreciation during the third quarter 2022.
•Compensation, benefits and other operating costs and expenses increased by $9 million primarily due to higher performance shares driven by higher equity and restricted stock expense.

•Income tax expense increased by $4 million mainly driven by a higher effective tax rate.

These were partially offset by the following favorable items:
•Net investment income increased by $52 million mainly due to higher income primarily from floating rate securities, higher SCS asset balances and GA optimization, partially offset by lower income from alternative investments and lower prepayments.
•Non-GMxB related Policyholders’ benefits decreased by $39 million due to the non-repeat of Q3 2021 payout assumption update.
•Commissions and distribution-related payments decreased by $28 million mainly due to lower average asset balances as result of equity market performance.
Net Flows and AV
• Total AV as of September 30, 2022 was $90.5 billion, down $3.7 billion, compared to June 30, 2022. The decline in AV was primarily due to a $4.5 billion decrease in equity markets, partially offset by $765 million in net inflows.
•Net inflows of $765 million were $752 million higher than in the three months ended September 30, 2021, mainly driven by $1.3 billion of inflows on our newer, less capital-intensive products, partially offset by $498 million of outflows on our older fixed-rate GMxB resultsblock.
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Nine Months Ended September 30, 2022 Compared to the Nine Months Ended September 30, 2021 for the Individual Retirement Segment
Operating earnings
Operating earnings decreased $256 million to $837 million during the nine months ended September 30, 2022 from reserve strengthening$1.1 billion in 2017. Higher interest ratesthe nine months ended September 30, 2021. The following notable items were the primary driverdrivers of a $462the change in operating earnings:

Unfavorable items included:
•Fee-type revenue decreased by $336 million decrease in GMxB Policyholders’ benefits which wasmainly due to lower average Separate Accounts AV as result of lower equity markets and the impact of AV ceded to Venerable, partially offset by GMxB Net derivative lossescommission reimbursements in Other Income.
•Amortization of $384 million.DAC increased by $53 million mainly due to equity market depreciation during 2022 compared to 2021.
Increase in •Interest credited to policyholders’ account balances increased by $50 million mainly due to the growth of SCS AV during 2022.
•Net investment income of $51decreased by $39 million resultingmainly due to lower alternative investment income, lower prepayments and lower assets due to the Venerable transaction partially offset by higher income from floating rate securities, TIPS, higher SCS asset balances and GA optimization.
These were partially offset by the following favorable items:
•Net GMxB results increased $89 million primarily due to improved GMxB margin from the Venerable Transaction, which mitigated the higher claims in 2022. GMxB results are included in policy charges and fee income, net derivative gains (losses), and policyholders’ benefits.
•Commissions and distribution-related payments decreased by $37 million mainly due to lower AV due to equity market depreciation during 2022.
◦Compensation, benefits and other operating costs and expenses decreased by $35 million primarily due to lower allocated compensation related expenses, primarily associated with lower headcount, and lower subadvisory fees.

•Income tax expense decreased by $28 million mainly driven by SCS sales.
Increase in remaining Revenues of $26 million due to higher average Separate Account AV, primarily due to positive market performance in 2017 and higher premium income from payout annuities.
A decrease in Commissions and distribution related payments of $14 million due to strong sales in the first quarter of 2017 in advance of the implementation of the DOL Rule.
The increase was partially offset by:
An increase in Amortization of DAC, net of $7 million primarily driven by $15 million lower DAC capitalization as a result of lower sales and a product shift towards SCS.
An increase in Income tax expense of $9 million due to higher pre-tax operating earnings partially offset by a lowerhigher effective tax rate due to the Tax Reform Act.in 2022.
Net Flows and AV
•The increasedecline in AV of $5.1$21.4 billion year-over-yearin the nine months ended September 30, 2022 was driven by a decrease in investments performance and interest credited to account balances, net of policy charges of $22.8 billion as a result of equity market appreciation.depreciation in 2022, partially offset by net inflows of $1.5 billion.
•Net outflowsinflows of $1.5 billion were $462 million, primarily$2.1 billion higher than in the nine months ended September 30, 2021, mainly driven by $1.0$3.1 billion of inflows on our newer, less capital-intensive products, partially offset by $1.6 billion of outflows on our older fixedfixed-rate GMxB block which were partially offset by $579 million of inflows on our newer less capital intensive products.block.
Group Retirement
The Group Retirement segment offers tax-deferred investment and retirement services or products to plans sponsored by educational entities, municipalities and not-for-profit entities, as well as small and medium-sized businesses.


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The following table summarizes Operatingoperating earnings of our Group Retirement segment for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Operating earnings$134 $192 $415 $514 
Key components of operating earnings are:
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 Three Months Ended March 31,
 2018 2017
 (in millions)
Operating earnings$76
 $59
    
Key components of Operating earnings are:   
    
REVENUES   
Policy charges, fee income and premiums$64
 $59
Net investment income131
 130
Investment gains (losses), net including derivative gains (losses)(1) (5)
Investment Management, service fees and other income44
 43
Segment Revenues238
 227
BENEFITS AND OTHER DEDUCTIONS   
Policyholders’ benefits—
 —
Interest credited to policyholders’ account balances70
 71
Commissions and distribution related payments(1)
24
 23
Amortization of deferred policy acquisition costs, net(2)
(11) (11)
Compensation, benefits, interest expense and other operating costs and expenses(3)
62
 62
Segment benefits and other deductions$145
 $145
(1) Includes $14 million and $12 million of deferred policy acquisition costs.
(2) Net of capitalization of $22 million and $21 million.
(3) Includes $8 million and $9 million of deferred policy acquisition costs.

Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
REVENUES
Policy charges, fee income and premiums$80 $96 $257 $273 
Net investment income160 189 503 564 
Net derivative (losses) gains(11)(11)(23)(16)
Investment management, service fees and other income60 69 187 197 
Segment revenues$289 $343 $924 $1,018 
BENEFITS AND OTHER DEDUCTIONS
Policyholders’ benefits$— $— $— $— 
Interest credited to policyholders’ account balances79 77 229 227 
Commissions and distribution-related payments12 12 43 41 
Amortization of deferred policy acquisition costs(20)(24)3 (11)
Compensation, benefits and other operating costs and expenses47 45 134 140 
Interest expense1 — 1 — 
Segment benefits and other deductions$119 $110 $410 $397 
The following tables summarizetable summarizes AV and AUA for our Group Retirement Segmentsegment as of the dates indicated:
September 30, 2022December 31, 2021
(in millions)
AV and AUA
General Account$13,234 $13,046 
Separate Accounts and Mutual Funds (1)26,476 34,763 
Total AV and AUA$39,710 $47,809 
____________
 March 31,
2018		 December 31,
2017
 (in millions)
AV   
General Account$11,393
 $11,319
Separate Accounts22,525
 22,587
Total AV$33,918
 $33,906
(1) Prior period amounts related to Separate Account AV and Mutual Funds AUA were revised to include Mutual Fund AUA. The impact of the revision to December 31, 2021 total AV and AUA was $457 million.


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The following table summarizes a roll-forward of AV and AUA for our Group Retirement segment for the periods indicated:
Three Months Ended September 30,Nine Months Ended September 30,
20222021 (1)20222021 (1)
(in millions)
Balance as of beginning of period$41,167 $46,299 $47,809 $42,756 
Gross premiums861 849 3,496 2,761 
Surrenders, withdrawals and benefits(918)(984)(2,886)(2,831)
Net flows(57)(135)610 (70)
Investment performance, interest credited and policy charges(1,400)(247)(8,709)3,288 
Other (2)— — — (57)
Balance as of end of period$39,710 $45,917 $39,710 $45,917 
____________
(1)Prior period amounts related to the AV and AUA roll-forward were updated to include Mutual Fund AUA. The impact of the revision to the beginning balance of the three months and nine months ended September 30, 2021 were $376 million and $297 million, respectively. Net Flows revision impact for the three months and nine months ended September 30, 2021 were $0 million and $48 million. Investment performance, interest credited and policy charges revision impact for the three months and nine months ended September 30, 2021 were $3 million and $28 million, respectively.
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 Three Months Ended March 31,
 2018 2017
 (in millions)
Balance as of beginning of period$33,906
 $30,138
Gross premiums837
 824
Surrenders, withdrawals and benefits(736) (769)
Net flows101
 55
Investment performance, interest credited and policy charges(89) 975
Balance as of end of period$33,918
 $31,168
(2)For the three months and nine months ended September 30, 2021, amounts reflect AV transfer of GMxB closed block business from GR to IR.
First Quarter of 2018
Three Months Ended September 30, 2022 Compared to First Quarter of 2017the Three Months Ended September 30, 2021 for the Group Retirement Segment
Operating earnings
Operating earnings increased $17decreased by $58 million to $76$134 million forduring the first quarter of 2018three months ended September 30, 2022 from $59$192 million in the first quarterthree months ended September 30, 2021. The following notable items were the primary drivers of 2017.the change in operating earnings:
The increase is primarily attributable to the following:Unfavorable items included:
Higher fee•Net investment income from Policy charges, fee income and premiums and Investment management, service fees and other income of $6decreased by $29 million due to positive net flowslower alternative investment income and lower prepayments, partially offset by higher income primarily from floating rate securities, higher asset balances and General Account optimization.
•Fee-type revenue decreased by $25 million due to lower average Separate Account AV from lower equity market performance.
A decreaseThese were partially offset by the following favorable items:
•Amortization of DAC increased by $4 million mainly due to more favorable assumption updates in 2022 compared to 2021.
•Income tax expense of $6decreased by $5 million due tomainly driven by lower pre-tax earnings, partially offset by a lowerhigher effective tax rate as a resultin 2022.
See “—Significant Factors Impacting Our Results—Effect of the Tax Reform Act.Assumption Updates on Operating Results” for more information regarding assumption updates.
Net Flows and AV
•The increasedecrease in AV of $2.8$1.5 billion in the three months ended September 30, 2022 was driven by equity market performance and net outflows of $57 million.
•Net outflows of $57 million improved by $78 million due to higher gross premiums and lower outflows.
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Nine Months Ended September 30, 2022 Compared to the Nine Months Ended September 30, 2021 for the Group Retirement Segment
Operating earnings
Operating earnings decreased by $99 million to $415 million during the nine months ended September 30, 2022 from $514 million during the first quarternine months ended September 30, 2021. The following notable items were the primary drivers of 2018the change in operating earnings:
Unfavorable items included:
•Net investment income decreased by $61 million primarily due to lower alternative investment income and lower prepayments partially offset by higher income from floating rate securities, TIPS and General Account optimization.
•Fee-type revenue decreased by $26 million due to lower average Separate Account AV from lower equity market performance.
•Net derivative losses increased by $7 million due to inflation related hedging loss offset on TIPS in the General Account.
These were partially offset by the following favorable items:
•Income tax expense decreased by $8 million primarily driven by lower pre-tax earnings partially offset by a higher effective tax rate in 2022.
Net Flows and AV
•The decrease in AV of 6.2 billion in the nine months ended September 30, 2022 was primarily due to market appreciationdepreciation, partially offset by net inflows of $610 million.
•Net inflows of $610 million increased by $680 million compared to 2021, driven by strong gross premiums reflecting strong sales and positive net flows.client engagement, partially offset by higher outflows.
Net flows were $101 million, a $46 million increase for the first quarter of 2018, driven primarily by a $13 million increase in Gross premiums and a reduction of $33 million in Surrenders and withdrawals.
Investment Management and Research
The Investment Management and Research segment provides diversified investment management, research and related services to a broad range of clients around the world. Operating earnings (loss), net of tax, presented here represents our March 31, 2018 economic interest net of tax, in AB of approximately 46.5%. Giving effect to64% and 65% during the AB Reorganization Transactions that occurred on April 23, 2018, our current economic interest in AB at Aprilthree months ended September 30, 2018 was2022 and 2021, and approximately 64.8%.65% during the nine months ended September 30, 2022 and 2021.

Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Operating earnings$94 $134 $330 $381 

Key components of operating earnings are:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
REVENUES
Net investment income$(9)$(2)$(58)$10 
Net derivative gains (losses)15 2 57 (7)
Investment management, service fees and other income990 1,093 3,135 3,166 
Segment revenues$996 $1,093 $3,134 $3,169 

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Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
BENEFITS AND OTHER DEDUCTIONS
Commissions and distribution related payments$152 $187 $487 $517 
Compensation, benefits and other operating costs and expenses636 622 1,930 1,831 
Interest expense5 — 9 1 
Segment benefits and other deductions$793 $809 $2,426 $2,349 
The following table summarizes Operating earnings of our Investment Management and Research segment for the periods presented:
 Three Months Ended March 31,
 2018 2017
 (in millions)
Operating earnings$81
 $32
    
Key components of Operating earnings are:   
    
REVENUES   
Policy charges, fee income and premiums$—
 $—
Net investment income3
 19
Investment gains (losses), net including derivative gains (losses)2
 (10)
Investment Management, service fees and other income904
 734
Segment Revenues909
 743
BENEFITS AND OTHER DEDUCTIONS   
Policyholders’ benefits—
 —
Interest credited to policyholders’ account balances—
 —
Commissions and distribution related payments110
 96
Amortization of deferred policy acquisition costs, net—
 —
Compensation, benefits, interest expense and other operating costs and expenses564
 497
Segment benefits and other deductions$674
 $593

Changes in AUM in the Investment Management and Research segment for the periods presented were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
 (in billions)
Balance as of beginning of period$646.8 $738.4 $778.6 $685.9 
Long-term flows
Sales/new accounts19.8 32.3 84.6 110.6 
Redemptions/terminations(24.9)(21.5)(72.2)(78.1)
Cash flow/unreinvested dividends(5.4)(3.6)(14.2)(13.8)
Net long-term inflows (outflows) (2)(10.5)7.2 (1.8)18.7 
Adjustments (1)— — (0.4)— 
Acquisition (3)12.2 — 12.2 — 
Market appreciation (depreciation)(35.8)(3.4)(175.9)37.6 
Net change(34.1)3.8 (165.9)56.3 
Balance as of end of period$612.7 $742.2 $612.7 $742.2 
 Three Months Ended March 31,
 2018 2017
 (in billions)
Balance as of beginning of period$554.5
 $480.2
Long-term flows:   
Sales/new accounts34.1
 19.0
Redemptions/terminations(31.2) (18.4)
Cash flow/unreinvested dividends(5.3) (0.8)
Net long-term (outflows) inflows(2.4) (0.2)
Market appreciation (depreciation)(2.6) 17.9
Net change(5.0) 17.7
Balance as of end of period$549.5
 $497.9
__________

(1)Approximately $0.4 billion of Institutional AUM was removed from AB total assets under management during the second quarter 2022 due to a change in the fee structure.

(2)Institutional net flows include $3.9 billion and $4.5 billion of AXA's redemptions of certain low-fee fixed income mandates for the three and nine months ended September 30, 2022, respectively.
(3)The CarVal acquisition added approximately $12.2 billion of Institutional AUM in the third quarter 2022.

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Average AUM in the Investment Management and Research segment for the periods presented by distribution channel and investment services were as follows:
 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
(in billions)
Distribution Channel:
Institutions$297.0 $331.1 $312.8 $323.3 
Retail250.9 299.5 274.9 284.1 
Private Wealth106.0 116.8 111.6 112.4 
Total$653.9 $747.4 $699.3 $719.8 
Investment Service:
Equity Actively Managed$222.8 $262.8 $245.7 $244.2 
Equity Passively Managed (1)56.7 70.4 61.8 67.8 
Fixed Income Actively Managed – Taxable198.9 252.5 216.4 254.8 
Fixed Income Actively Managed – Tax-exempt53.7 54.9 54.7 53.0 
Fixed Income Passively Managed (1)11.3 9.4 12.1 8.8 
Alternatives/Multi-Asset Solutions (2)110.5 97.4 108.6 91.2 
Total$653.9 $747.4 $699.3 $719.8 
____________
 Three Months Ended March 31,
 2018 2017
 (in billions)
Distribution Channel:   
Institutions$269.3
 $243.8
Retail194.0
 164.9
Private Wealth Management93.8
 82.5
Total$557.1
 $491.2
Investment Service:   
Equity Actively Managed$142.9
 $115.7
Equity Passively Managed(1)
54.3
 48.7
Fixed Income Actively Managed – Taxable243.3
 226.0
Fixed Income Actively Managed – Tax-exempt40.6
 37.3
Fixed Income Passively Managed(1)
10.0
 11.1
Other(2)
66.0
 52.4
Total$557.1
 $491.2
(1)Includes index and enhanced index services.
(2)Includes certain multi-asset solutions and services and certain alternative investments.not included in equity of fixed income services.

First Quarter of 2018Three Months Ended September 30, 2022 Compared to First Quarter of 2017the Three Months Ended September 30, 2021 for the Investment Management and Research Segment
Operating earnings
Operating earnings increased $49decreased $40 million to $94 million during the three months ended September 30, 2022 from $134 million during the three months ended September 30, 2021. The following notable items were the primary drivers of the change in the first quarter of 2018 to $81 million from $32 million in the first quarter of 2017 primarily attributable to the following:operating earnings:
Increase in Investment management, service fees, and other income of $170Unfavorable items included:
•Fee-type revenue decreased by $103 million primarily due to higherlower investment advisory base fees, of $75 million resulting from a 13% increase in average AUMdistribution revenues, and a 2% increase in the overall portfolio rate. Operating earnings includes an increase inBernstein Research Services revenues. Lower investment advisory base fees and distribution revenues of $78 million from the impact of adopting the new revenue recognition standard (ASC 606) in 2018.
Income tax expense decreased $8 millionwere driven by a lower effective tax rateaverage AUM. Lower Bernstein Research Services revenues were primarily driven by significantly lower customer trading activity in Europe and Asia due to the Tax Reform Act.prevailing macro-economic environment.
This increase was partially offset by the following:
Higher •Compensation, benefits, interest expense and other operating costs increased by $19 million mainly due to higher general and administrative costs.
These were partially offset by the following favorable items:
•Commissions and distribution-related payments decreased by $35 million mainly due to lower payments to financial intermediaries for the distribution of $67AB mutual funds.
•Net derivative gains, net of net investment income, was favorable by $6 million. Net derivative gains increased $13 million including $43mainly due to gains from economically hedging seed capital investments, partially offset by a decrease in Net investment income of $7 million relatedmainly due to losses on the impact of adoption of revenue recognition standard (ASC 606) in 2018, higher promotion and servicing expenses of $17seed capital investments subject to market risk.
•Earnings attributable to noncontrolling interest decreased by $26 million higher incentive compensation, higher base compensation, higher fringe benefits and higher commissions.due to lower pre-tax earnings.
•Income tax expense decreased by $14 million primarily due to lower pre-tax earnings.
Long-Term Net Flows and AUM
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•Total AUM as of March 31, 2018September 30, 2022 was $549.5$612.7 billion, up $51.6down $34.1 billion, or 10%5.3%, compared to firstJune 30, 2022. During the third quarter 2022, AUM decreased primarily as a result of 2017. The increase was driven by market appreciationdepreciation of $40.7$35.8 billion and net flowsoutflows of $10.9$10.5 billion, (primarilypartially offset by the addition of $12.2 billion due to the acquisition of CarVal. Net outflows were due to Institution net outflows of $6.3 billion and Retail and Institutionalnet outflows of $5.0 billion partially offset by Private Wealth net inflows of $8.7 billion).$0.8 billion. Excluding AXA redemptions of low-fee fixed income mandates of $3.9 billion, AB generated net outflows of $6.6 billion in the third quarter 2022.


Nine Months Ended September 30, 2022 Compared to the Nine Months Ended September 30, 2021 for the Investment Management and Research Segment
Operating earnings
Operating earnings decreased $51 million to $330 million during the nine months ended September 30, 2022 from $381 million in the nine months ended September 30, 2021. The following notable items were the primary drivers of the change in operating earnings:
Unfavorable items included:
•Compensation, benefits, interest expense and other operating costs increased by $107 million mainly due to higher general and administrative costs, primarily relating to higher portfolio servicing fees, professional fees and technology fees.
•Net investment income, net of derivative gains, was unfavorable by $4 million. Net investment income decreased by $68 million mainly due to higher losses on the seed capital investments subject to market risk, offset by an increase in Net derivative gains of $64 million mainly due to higher gains from economically hedging the seed capital investments.
•Fee-type revenue decreased by $31 million primarily due to lower investment advisory base fees and Bernstein Research Services revenues, offset by higher performance based fees. The decrease in investment advisory base fees was primarily driven by lower average AUM. The decrease in Bernstein Research Services revenues were primarily driven by significantly lower customer trading activity in Europe and Asia due to the prevailing macro-economic environment. The increase in performance based fees was primarily due to higher performance fees earned on AB’s U.S. Real Estate Funds, partially offset by lower performance fees earned on AB’s U.S. Select Equity Long/Short and Private Credit Fund.
These were partially offset by the following favorable items:
•Commissions and distribution-related payments decreased by $30 million mainly due to lower payments to financial intermediaries for the distribution of AB mutual funds.
•Earnings attributable to noncontrolling interest decreased by $40 million due to lower pre-tax earnings.
•Income tax expense decreased by $21 million due to lower pre-tax earnings.
Long-Term Net Flows and AUM
•Total AUM as of September 30, 2022 was $612.7 billion, down $165.9 billion, or 21.3%, compared to December 31, 2021, and down $129.5 billion, or 17.5%, compared to September 30, 2021. During the nine months ended September 30, 2022, AUM decreased primarily as a result of market depreciation of $175.9 billion partially offset by the addition of $12.2 billion due to the acquisition of CarVal. During the twelve months ended September 30, 2022, AUM decreased primarily as a result of market depreciation of $147.0 billion partially offset by net inflows of $5.7 billion and the addition of $12.2 billion due to the acquisition of CarVal. Excluding AXA redemptions of low-fee fixed income mandates of $4.5 billion, AB generated net inflows of $2.7 billion and $10.2 billion during the nine and twelve month periods ended September 30, 2022.
•During the nine months ended September 30, 2022, Retail net outflows of $8.2 billion were offset by Institutional and Private Wealth net inflows of $4.6 billion and $1.8 billion, respectively. During the twelve months ended September 30, 2022, Institutional and Private Wealth net inflows were $5.0 billion and $2.6 billion, respectively, offset by Retail net outflows of $1.9 billion.


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Protection Solutions
The Protection Solutions segment includes our life insurance and employee benefits businesses. We provide a targeted range of products aimed at serving the financial needs of our clients throughout their lives, including Variable Universal Life (“VUL”),VUL, IUL and term life products. In 2015, we entered the employee benefits market and currently offer a suite of dental, vision, life, as well as short- and long-term disability insurance products to small and medium-size businesses.
In recent years, we have refocused our product offering and distribution towards less capital intensive, higher return accumulation and protection products. For example, in January 2021, we discontinued offering our most interest sensitive IUL product. We plan to improve our operating earnings over time through earnings generated from sales of our repositioned product portfolio and by proactively managing and optimizing our in-force book.
The following table summarizes Operatingoperating earnings (loss) of our Protection Solutions segment for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Operating earnings (loss)$72 $160 $208 $264 
 Three Months Ended March 31,
 2018 2017
 (in millions)
Operating earnings (loss)$23
 $39
    
Key components of Operating earnings are:   
    
REVENUES   
Policy charges, fee income and premiums$535
 $529
Net investment income220
 208
Investment gains (losses), net including derivative gains (losses)(1) —
Investment management, service fees and other income55
 52
Segment Revenues809
 789
BENEFITS AND OTHER DEDUCTIONS   
Policyholders’ benefits409
 412
Interest credited to policyholders’ account balances122
 116
Commissions and distribution related payments(1)
66
 68
Amortization of deferred policy acquisition costs, net(2)
71
 29
Compensation, benefits, interest expense and other operating costs and expenses(3)
114
 109
Segment benefits and other deductions$782
 $734
Key components of operating earnings (loss) are:
(1) Includes $34 million and $36 million of deferred policy acquisition costs.
(2) Net of capitalization of $51 million and $50 million.
(3) Includes $17 million and $14 million of deferred policy acquisition costs.



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Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
REVENUES
Policy charges, fee income and premiums$505 $482 $1,544 $1,493 
Net investment income236 294 760 827 
Net derivative (losses) gains(13)(7)(18)(18)
Investment management, service fees and other income63 69 192 194 
Segment revenues$791 $838 $2,478 $2,496 
BENEFITS AND OTHER DEDUCTIONS
Policyholders’ benefits$414 $392 $1,364 $1,370 
Interest credited to policyholders’ account balances130 126 380 383 
Commissions and distribution related payments46 44 132 120 
Amortization of deferred policy acquisition costs14 4 78 63 
Compensation, benefits and other operating costs and expenses96 78 266 241 
Interest expense— — — — 
Segment benefits and other deductions$700 $644 $2,220 $2,177 
The following table summarizes Protection Solutions Reserves for our Protection Solutions segment as of the dates indicated:presented:
September 30, 2022December 31, 2021
(in millions)
Protection Solutions Reserves (1)
General Account$18,243 $18,625 
Separate Accounts12,783 17,012 
Total Protection Solutions Reserves$31,026 $35,637 
_______________
(1)Does not include Protection Solutions Reserves for our employee benefits business as it is a start-up business and therefore has immaterial in-force policies.
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 March 31, 2018 December 31, 2017
 (in millions)
Protection Solutions Reserves(1)
   
General Account$16,128
 $16,007
Separate Accounts12,396
 12,643
Total Protection Solutions Reserves$28,524
 $28,650
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(1)Does not include Protection Solutions Reserves for our employee benefits business as it is a start-up business and therefore has immaterial in-force policies.
The following table presents our in-force face amounts for the periods indicated, respectively, for our individual life insurance products:
September 30, 2022December 31, 2021
(in billions)
In-force face amount by product: (1)
Universal Life (2)$43.7 $45.9 
Indexed Universal Life27.6 27.9 
Variable Universal Life (3)132.8 132.8 
Term213.0 215.4 
Whole Life1.2 1.2 
Total in-force face amount$418.3 $423.2 
_______________
(1)Includes individual life insurance and does not include employee benefits as it is a start-up business and therefore has immaterial in-force policies.
(2)UL includes GUL.
(3)VUL includes VL and COLI.
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 March 31, 2018 December 31, 2017
 (in billions)
In-force Face Amounts for Protection Solutions(1)
   
Universal life(2)
$58.3
 $59.0
Indexed universal life21.0
 20.5
Variable universal life(3)
128.5
 128.9
Term234.7
 235.9
Whole life1.6
 1.6
Total in-force face amount$444.1
 $445.9
(1)Includes individual life insurance and does not include employee benefits as it is a start-up business and therefore has immaterial in-force policies.
(2)Universal Life includes Guaranteed Universal Life.
(3)Variable Universal Life includes VL and COLI.

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First Quarter of 2018Three Months Ended September 30, 2022 Compared to the First Quarter of 2017Three Months Ended September 30, 2021 for the Protection Solutions Segment
Operating earnings (loss)
Operating earningsearnings decreased $16by $88 million to $23$72 million during the three months ended September 30, 2022 from $160 million in the first quarterthree months ended September 30, 2021. The following notable items were the primary drivers of 2018the change in operating earnings:
Unfavorable items included:
•Net investment income decreased by $58 million mainly due to lower alternative investment income and lower prepayments partially offset by higher income from $39 million in the first quarter of 2017 primarily attributable to the following:floating rate securities, higher asset balances and GA optimization.
Amortization of DAC, net•Policyholders’ benefits increased by $42$22 million mainly due to a $44less favorable assumption updates in 2022 compared to 2021 and higher benefits due to strong growth in Employee Benefits, partially offset by lower Term mortality in 2022 compared to 2021 and lower accrual for PFBL reserves.
•Compensation, benefits and other operating costs and expenses increased by $18 million increase in DAC amortization before capitalization, as we have remained in a loss recognition position in the first quarter of 2018 (loss recognition position started in the fourth quarter of 2017) which results in higher amortization. 
Increase of $6 million in Interest credited to policyholders' account balances mainly due to higher AVperformance share expense due to equity returns, and restricted stock expense.
•Amortization of DAC increased by $10 million mainly due to less favorable assumption update in our Indexed Universal Life products.
2022 compared to 2021.


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This decrease wasThese were partially offset by the following:following favorable items:
Increase•Fee-type revenue increased by $17 million mainly driven by higher premiums due to growth in Employee Benefits (offset in Policyholder’s benefits).
•Income tax expense decreased by $15 million primarily due to lower pre-tax earnings, partially offset by a higher effective tax rate in 2022.
Nine Months Ended September 30, 2022 Compared to the Nine Months Ended September 30, 2021 for the Protection Solutions Segment
Operating earnings
Operating earnings decreased $56 million to $208 million during the nine months ended September 30, 2022 from $264 million in the nine months ended September 30, 2021. The following notable items were the primary drivers of the change in operating earnings:
Unfavorable items included:
•Net investment income of $12decreased by $67 million due to the General Account portfolio rebalancing and higher asset balances.
Increase of $6 million in Policy charges, fee income and premiums, mainly due to an increase in cost of insurance charges.lower alternative investment income and lower prepayments partially offset by higher income from floating rate securities, TIPS and GA optimization
Increase of $3 million in Investment management, service fees,•Compensation, benefits and other income,operating costs and expenses increased by $25 million mainly due to higher Separate Accountperformance share expense due to equity returns, and an increase in subadvisory fees and consulting expenses.
•Amortization of DAC increased by $15 million mainly due to less favorable assumption updates in 2022 compared to 2021.
•Commissions and distribution-related payments increased by $12 million mainly due to higher sales of Employee Benefits products.
These were partially offset by the following favorable items:
•Fee-type revenue increased by $49 million mainly driven by higher premiums due to growth in Employee Benefits (offset in Policyholder’s benefits).
•Policyholders’ benefits decreased by $6 million mainly due to lower mortality in 2022 compared to 2021 and lower PFBL reserves, partially offset by a higher increase in EB reserves.
Decrease in income•Income tax expense of $12decreased by $5 million primarily due to lower pre-tax earnings, partially offset by a lowerhigher effective tax rate as a resultin 2022.
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Table of the Tax Reform Act.Contents
Corporate and Other
Corporate and Other includes certainsome of our financing and investment expenses. It also includes: AXAEquitable Advisors broker-dealer business, the Closed Block, run-off variable annuity reinsurance business, run-off group pension business, run-off health business, benefit plans for our employees, certain strategic investments and certain unallocated items, including capital and related investments, interest expense and financing fees and corporate expense. AB’s results of operations are reflected in the Investment Management and Research segment. Accordingly, Corporate and Other does not include any items applicable to AB.
The following table summarizes Operatingoperating earnings (loss) of Corporate and Other for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Operating earnings (loss)$(72)$16 $(218)$(76)
 Three Months Ended March 31,
 2018 2017
 (in millions)
Operating earnings (loss)$(76) $(28)

General Account Investment Assets Portfolio
The GAIAGeneral Account investment portfolio and investment resultsis used to support the insurance and annuity liabilities of our Individual Retirement, Group Retirement and Protection Solutions businesses. businesses segments. In the first quarter 2022, the Company changed its methodology for allocating its General Account investment portfolio, which resulted in a change in the asset and net investment income allocation amongst the Company’s business segments. Following this change, the segmentation of the general account investments is now more closely aligned with the liability characteristics of the product groups. Management determined that the change in the allocation methodology allows for improved flexibility and infuses an active asset liability management practice into the segmentation process. Additionally, the Company also changed its basis for allocating the spread earned from our FHLB investment borrowing and FABN programs. The spread earned from our FHLB investment borrowing and FABN programs includes the investment income on the assets less interest credited on the funding agreements. The net spread as reflected in net investment income is allocated to the segments based on the percentage of the individual segment insurance liabilities over the combined segments insurance liabilities.
Our GAIAGeneral Account investment portfolio investment strategy seeks to achieve sustainable risk-adjusted returns by focusing on principal preservation, investment return, duration and liquidity requirements by product class and the diversification of risks. Investment activities are undertaken according to investment policy statements that contain internally established guidelines and are required to comply with applicable laws and insurance regulations.
Risk tolerances are established for credit risk, market risk, liquidity risk and concentration risk across types of issuers and asset classes that seek to mitigate the impact of cash flow variability arising from these risks. Significant interest rate increases and market volatility in 2022 have reduced the fair value of fixed maturities from a net unrealized gain position to a net unrealized loss. These effects apply across the portfolio and are being assessed within the aggregate asset and liability management strategies. As a part of asset and liability management, we maintain a weighted average duration for our General Account investment portfolio that is within an acceptable range of the estimated duration of our liabilities given our risk appetite and hedging programs.
The GAIAGeneral Account investment portfolio consists largely of investment grade fixed maturities, and short-term investments, commercial and agricultural mortgage loans, below investment grade fixed maturities, alternative investments and other financial instruments. Fixed maturities include publicly issued corporate bonds, government bonds, privately placed notes and bonds, bonds issued by states and municipalities, mortgage-backed securities and asset-backed securities.
As part of our asset and liability management strategies, we maintain a weighted average duration for our GAIA The General Account investment portfolio that is within an acceptable range of the estimated duration of our liabilities given our risk appetite and hedging programs. The GAIA portfolioalso includes credit derivatives to replicate exposure to individual securities or pools of securities as a means of achieving credit exposure similar to bonds of the underlying issuer(s) more efficiently. In addition, from time to time we use derivatives for hedging purposes to reduce our exposure to equity markets, interest rates, foreign currency and credit spreads.


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a yield enhancement strategy, the General Account has diversified into more asset and sub-asset classes including higher yielding commercial mortgage investments.
Investment portfolios are primarily managed by legal entity with dedicated portfolios for certain blocks of business. For portfolios that back multiple product groups, investment results are allocated to business segments.
The following tables reconcileOur investment philosophy is driven by our long-term commitments to clients, robust risk management and strategic asset allocation. In executing the consolidated balance sheet asset and liability amounts to GAIA.
activities of our General Account Investment Assets
March 31, 2018
 GAIA 
Other(1)
 Balance Sheet Total
 (in millions)
Balance Sheet Captions:     
Fixed maturities, available for sale, at fair value$43,953
 $(469) $43,484
Mortgage loans on real estate11,333
 —
 11,333
Policy Loans3,776
 —
 3,776
Real Estate held for production of income52
 —
 52
Other equity investments1,128
 130
 1,258
Other invested assets170
 3,891
 4,061
Sub-total investments60,412
 3,552
 63,964
Trading Securities12,907
(2) 
2,012
 14,919
Total investments73,319
 5,564
 78,883
Cash and cash equivalents4,220
 1,871
 6,091
Repurchase and funding agreements(3)
(4,397) —
 (4,397)
Total$73,142
 $7,435
 $80,577

(1)Assets listed in the “Other” category principally consist of our loans to affiliates and other miscellaneous assets or liabilities related to GAIAinvestment portfolio, we incorporate ESG factors into the investment processes for a significant portion of our portfolio. As investors with a long-term horizon, we believe that are reclassified from various balance sheet lines held in portfolios other than the General Account and which are not managed as part of GAIA, including: (i) related accrued income or expense, (ii) certain reclassifications and intercompany adjustments, (iii) certain trading securities that are associated with hedging programs for variable annuity products with guarantee features, (iv) assets and income of AB and (v) for fixed maturities, the reversal of net unrealized gains (losses). The “Other” category is deducted in arriving at GAIA.
(2)Primarily related to SCS and consists of corporate bonds (83%), U.S. Treasury securities (6%), other government securities (10%) and other trading securities (1%).
(3)Includes Securities purchased under agreements to resell, Securities sold under agreements to repurchase and Federal Home Loan Bank funding agreements which are reported in policyholders’ account balances.



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companies with sustainable practices are better positioned to deliver value to stakeholders over an extended period, thereby enhancing the quality of our portfolio. These companies are more likely to increase sales through sustainable products, reduce energy costs and attract and retain talent. This belief underpins our approach to sustainable investing, where we seek to enhance the sustainability of our investment portfolio by integrating ESG factors into our investment decision process.
The General Account Investment Assets
December 31, 2017
Balance Sheet Captions:GAIA 
Other(1)
 
Balance
  Sheet Total  
 (in millions)
Fixed maturities, available for sale, at fair value$45,751
 $1,190
 $46,941
Mortgage loans on real estate10,952
 —
 10,952
Policy loans3,819
 —
 3,819
Real estate held for the production of Income390
 —
 390
Other equity investments1,264
 128
 1,392
Other invested assets25
 4,093
 4,118
Subtotal investment assets$62,201
 $5,411
 $67,612
Trading securities12,050
(2) 
2,120
 14,170
Total investments$74,251
 $7,531
 $81,782
Cash and cash equivalent4,539
 275
 4,814
Repurchase and funding agreements(3)
(4,382) —
 (4,382)
Total$74,408
 $7,806
 $82,214
(1)Assets listed in the “Other” category principally consist of our loans to affiliates and other miscellaneous assets or liabilities related to GAIA that are reclassified from various balance sheet lines held in portfolios other than the General Account and which are not managed as part of GAIA, including: (i) related accrued income or expense, (ii) certain reclassifications and intercompany adjustments, (iii) certain trading securities that are associated with hedging programs for variable annuity products with guarantee features, (iv) assets and income of AB and (v) for fixed maturities, the reversal of net unrealized gains (losses). The “Other” category is deducted in arriving at GAIA.
(2)
Primarily related to SCS and consists of corporate bonds (83%), U.S. Treasury securities (8%), other government securities (8%) and other trading securities (1%).
(3)Includes Securities purchased under agreements to resell, Securities sold under agreements to repurchase and Federal Home Loan Bank funding agreements which are reported in policyholders’ account balances.



106

the U.S. GAAP Consolidated Financial Statements. This presentation is consistent with how we manage the General Account investment portfolio. For further investment information, please refer to Note 3 and Note 4 of the Notes to the Consolidated Financial Statements.
Investment Results of the General Account Investment AssetsPortfolio
The following table summarizes the General Account investment portfolio results with Non-GAAP Operating Earnings adjustments by asset category for the periods indicated.
This presentation is consistent with how we measure investment performance for management purposes.
Three Months Ended September 30,
20222021
YieldAmount (2)YieldAmount (2)
(Dollars in millions)
Fixed Maturities: (5)
Income (loss)3.77 %$699 3.42 %$602 
Ending assets74,565 71,216 
Mortgages:
Income (loss)3.92 %148 3.99 %134 
Ending assets15,688 13,448 
Other Equity Investments: (1)
Income (loss)2.95 %26 31.06 %213 
Ending assets3,468 2,903 
Policy Loans:
Income (loss)4.90 %49 5.11 %52 
Ending assets4,018 4,027 
Cash and Short-term Investments:
Income (loss)(2.51)%(8)(0.05)%— 
Ending assets563 1,215 
Repurchase and funding agreements:
Interest expense and other(47)(13)
Ending assets (liabilities)(7,830)(6,807)
Total Invested Assets:
Income (loss)3.83 %867 4.68 %988 
Ending Assets90,472 86,002 
Short Duration Fixed Maturities:
Income (loss)3.41 %1 3.39 %3 
Ending assets117 142 
Total:
Investment income (loss)3.83 %868 4.67 %991 
Less: investment fees (3)(0.17)%(38)(0.13)%(28)
Investment Income, Net3.66 %830 4.54 %963 
Ending Net Assets$90,589 $86,144 
100
 Three Months Ended, March 31, Year Ended December 31, 2017
 2018 2017 
 Yield Amount Yield Amount 
 (Dollars in millions)
Fixed Maturities(1):
         
Investment grade         
Income (loss)3.64 % $396
 3.67 % $374
 $1,515
Ending assets  42,620
   40,970
 44,384
Below investment grade         
Income (loss)6.52 % 22
 7.32 % 30
 113
Ending assets  1,333
   1,646
 1,367
Mortgages:         
Income (loss)4.18 % 116
 4.66 % 116
 454
Ending assets  11,333
   10,197
 10,952
Real Estate Held for Production of Income:         
Interest expense and other(1.91)% (4) (1.19)% (1) 2
Ending assets (liabilities)  52
   56
 390
Other Equity Investments(2):
         
Income (loss)12.59 % 41
 12.76 % 41
 169
Ending assets  1,298
   1,410
 1,289
Policy Loans:         
Income (loss)5.71 % 54
 5.76 % 55
 221
Ending assets  3,776
   3,818
 3,819
Cash and Short-term Investments:         
Income (loss)0.71 % 8
 0.67 % 6
 32
Ending assets  4,220
   2,881
 4,539
Repurchase and Funding agreements:         
Interest expense and other  (9)   (4) (21)
Ending (liabilities)  (4,397)   (3,790) (4,382)
Total Invested Assets:         
Income (loss)4.07 % 624
 4.28 % 617
 2,485
Ending assets  60,235
   57,188
 62,358
Trading Securities:         
Income (loss)(0.94)% (29) 5.19 % 119
 231
Ending assets  12,907
   9,689
 12,050
Total:         
Investment Income (loss)3.22 % 595
 4.42 % 736
 2,716


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Nine Months Ended September 30,Year Ended December 31
 202220212021
 YieldAmount (2)YieldAmount (2)YieldAmount (2)
(Dollars in millions)
Fixed Maturities:
Income (loss)3.52 %$1,935 3.41 %$1,822 3.40 %$2,429 
Ending assets74,565 71,216 72,545 
Mortgages:
Income (loss)3.87 %424 4.07 %407 4.08 %547 
Ending assets15,688 13,448 14,033 
Other Equity Investments: (1)
Income (loss)7.80 %188 22.97 %433 20.45 %534 
Ending assets3,468 2,903 2,901 
Policy Loans:
Income (loss)5.30 %160 5.28 %161 5.01 %203 
Ending assets4,018 4,027 4,024 
Cash and Short-term Investments:
Income (loss)(0.83)%(12)(0.05)%(1)(0.13)%(2)
Ending assets563 1,215 1,662 
Funding agreements:
Interest expense and other(82)(44)(56)
Ending assets (liabilities)(7,830)(6,807)(6,647)
Total Invested Assets:
Income (loss)3.86 %2,613 4.37 %2,778 4.28 %3,655 
Ending Assets90,472 86,002 88,518 
Short Duration Fixed Maturities:
Income (loss)3.53 %4 3.38 %77 4.48 %78 
Ending assets117 142 142 
Total:
Investment income (loss)3.86 %2,617 4.34 %2,855 4.28 %3,733 
Less: investment fees (3)(0.15)%(101)(0.13)%(82)(0.14)%(118)
Investment Income, Net3.71 %2,516 4.25 %2,773 4.15 %3,615 
Ending Net Assets$90,589 $86,144 $88,660 
_____________
Less: investment fees(0.10)% (18) (0.11)% (18) (68)
Investment Income, Net3.12 % $577
 4.31 % $718
 $2,648
Ending Net Assets  $73,142
   $66,877
 $74,408
(1)Includes, as of September 30, 2022, September 30, 2021 and December 31, 2021 respectively, $370 million, $328 million and $319 million of other invested assets.
(1)Fixed Maturities Investment Grade and Below Investment Grade are based on Moody’s Equivalent ratings.
(2)Includes, as of March 31, 2018 and December 31, 2017, respectively, $170 million, and $25 million of other invested assets.

(2)Amount for fixed maturities and mortgages represents original cost, reduced by repayments, write-downs, adjusted amortization of premiums, accretion of discount and allowances. Cost for equity securities represents original cost reduced by write-downs; cost for other limited partnership interests represents original cost adjusted for equity in earnings and reduced by distributions.
(3)Investment fees are inclusive of investment management fees paid to AB.

Fixed Maturities
The fixed maturity portfolio consists largely of investment grade corporate debt securities and includes significant amounts of U.S. government and agency obligations. The limited below investment grade securities in the GAIAGeneral Account investment portfolio consist of loans to middle market companies, public high yield securities, bank loans, as well as “fallen angels”angels,” originally purchased as investment grade as well as short duration public high yield and loans to middle market companies. At March 31, 2018 and December 31, 2017, respectively, 79.5% and 81.1% of the fixed maturity portfolio was publicly traded.investments.
Fixed Maturities by Industry
The following table sets forth these fixed maturities by industry category as of the dates indicated along with their associated gross unrealized gains and losses.


101
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Fixed Maturities by Industry(1)
Amortized CostAllowance for Credit LossesGross Unrealized GainsGross Unrealized LossesFair ValuePercentage of Total (%)
(in millions)
As of September 30, 2022
Corporate Securities:
Finance$14,195 $— $10 $1,909 $12,296 19 %
Manufacturing12,421 1 11 2,044 10,387 16 %
Utilities7,015 — 10 1,190 5,835 9 %
Services8,320 21 9 1,365 6,943 11 %
Energy3,901 — 9 652 3,258 5 %
Retail and wholesale3,508 — 12 487 3,033 5 %
Transportation2,409 — 8 430 1,987 3 %
Other119 — — 17 102 — %
Total corporate securities51,888 22 69 8,094 43,841 68 %
U.S. government7,241 — 4 1,215 6,030 10 %
Residential mortgage-backed (2)500 — 1 25 476 1 %
Preferred stock41 — 2 — 43 — %
State & political668 — 8 92 584 1 %
Foreign governments1,114 — 2 190 926 1 %
Commercial mortgage-backed3,824 — — 574 3,250 5 %
Asset-backed securities9,289 — 1 545 8,745 14 %
Total$74,565 $22 $87 $10,735 $63,895 100 %
As of December 31, 2021
Corporate Securities:
Finance$12,954 $— $545 $59 $13,440 17 %
Manufacturing12,212 1 775 39 12,947 17 %
Utilities6,446 — 351 36 6,761 9 %
Services8,191 21 380 50 8,500 11 %
Energy3,854 — 174 17 4,011 5 %
Retail and wholesale3,390 — 218 18 3,590 5 %
Transportation2,181 — 156 10 2,327 3 %
Other60 — 2 — 62 — %
Total corporate securities49,288 22 2,601 229 51,638 67 %
U.S. government13,056 — 2,344 15 15,385 20 %
Residential mortgage-backed (2)90 — 8 — 98 — %
Preferred stock41 — 12 — 53 — %
State & political586 — 78 3 661 1 %
Foreign governments1,124 — 42 14 1,152 1 %
Commercial mortgage-backed2,427 — 19 25 2,421 3 %
Asset-backed securities5,933 — 21 20 5,934 8 %
Total$72,545 $22 $5,125 $306 $77,342 100 %
______________
(1)Investment data has been classified based on standard industry categorizations for domestic public holdings and similar classifications by industry for all other holdings.
(2)Includes publicly traded agency pass-through securities and collateralized obligations.


102
 
Amortized  
Cost
 
Gross
Unrealized  
Gains
 
Gross
Unrealized  
Losses
 Fair Value Percentage of Total (%)
 (in millions)  
At March 31, 2018:         
Corporate Securities:         
Finance$6,064
 $113
 $60
 $6,117
 14%
Manufacturing8,026
 166
 133
 8,059
 18%
Utilities4,206
 134
 75
 4,265
 10%
Services3,639
 78
 55
 3,662
 8%
Energy2,084
 66
 36
 2,114
 5%
Retail and wholesale1,365
 20
 21
 1,364
 3%
Transportation1,078
 36
 24
 1,090
 2%
Other145
 5
 1
 149
 —%
Total corporate securities26,607
 618
 405
 26,820
 60%
U.S. government and agency14,757
 387
 506
 14,638
 34%
Residential mortgage-backed(2)
614
 16
 3
 627
 1%
Preferred stock473
 44
 4
 513
 1%
State & municipal422
 56
 1
 477
 1%
Foreign governments405
 23
 9
 419
 1%
Asset-backed securities675
 4
 4
 675
 2%
Total$43,953
 $1,148
 $932
 $44,169
 100%
At December 31, 2017         
Corporate Securities:         
Finance$5,824
 $200
 $7
 $6,017
 13%
Manufacturing7,546
 289
 15
 7,820
 17%
Utilities4,032
 210
 13
 4,229
 9%
Services3,307
 130
 15
 3,422
 7%
Energy1,980
 101
 9
 2,072
 4%
Retail and wholesale1,404
 36
 3
 1,437
 3%
Transportation957
 58
 3
 1,012
 2%
Other128
 7
 —
 135
 —%
Total corporate securities25,178
 1,031
 65
 26,144
 55%
U.S. government and agency17,744
 1,000
 251
 18,493
 39%
Residential mortgage-backed(2)
797
 22
 1
 818
 2%
Preferred stock470
 43
 1
 512
 1%
State & municipal422
 67
 —
 489
 1%
Foreign governments395
 29
 5
 419
 1%
Asset-backed securities745
 5
 1
 749
 1%
Total$45,751
 $2,197
 $324
 $47,624
 100%
(1)Investment data has been classified based on standard industry categorizations for domestic public holdings and similar classifications by industry for all other holdings.
(2)Includes publicly traded agency pass-through securities and collateralized obligations.


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Fixed Maturities Credit Quality
The Securities Valuation Office (“SVO”)SVO of the NAIC evaluates the investments of insurers for regulatory reporting purposes and assigns fixed maturity securitiesmaturities to one of six categories (“NAIC Designations”). NAIC Designations of “1” or “2” include fixed maturities considered investment grade, which include securities rated Baa3 or higher by Moody’s or BBB- or higher by Standard & Poor’s. NAIC Designations of “3” through “6” are referred to as below investment grade, which include securities rated Ba1 or lower by Moody’s and BB+ or lower by Standard & Poor’s. As a result of time lags between the funding of investments and the completion of the SVO filing process, the fixed maturity portfolio typically includes securities that have not yet been rated by the SVO as of each balance sheet date. Pending receipt of SVO ratings, the categorization of these securities by NAIC Designationdesignation is based on the expected ratings indicated by internal analysis.
The amortized cost of the General Accounts’ public and private below investment grade fixed maturities totaled $1.1 billion, or 2.4% of the total fixed maturities at March 31, 2018 and $1.1 billion, or 2.5%, of the total fixed maturities at December 31, 2017. Gross unrealized losses on public and private fixed maturities increased from $324 million in 2017 to $932 million in first quarter of 2018. Below investment grade fixed maturities represented 2.5% and 5.6% of the gross unrealized losses at March 31, 2018 and December 31, 2017, respectively.


110

Public Fixed Maturities Credit Quality.
The following table sets forth the General Account’s public fixed maturities portfolio by NAIC rating at the dates indicated.
Public Fixed Maturities
NAIC DesignationRating Agency Equivalent
Amortized
Cost
Allowance for Credit Losses
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
  (in millions)
As of September 30, 2022
1................................Aaa, Aa, A$45,386 $— $52 $6,043 $39,395 
2................................Baa26,373 — 31 4,448 21,956 
Investment grade71,759 — 83 10,491 61,351 
3................................Ba1,648 1 2 172 1,477 
4................................B1,113 19 2 70 1,026 
5................................Caa45 2 — 2 41 
6................................Ca, C— — — — — 
Below investment grade2,806 22 4 244 2,544 
Total Fixed Maturities$74,565 $22 $87 $10,735 $63,895 
As of December 31, 2021:
1................................Aaa, Aa, A$44,653 $— $3,734 $158 $48,229 
2................................Baa25,141 — 1,357 127 26,371 
Investment grade69,794 — 5,091 285 74,600 
3................................Ba1,601 1 22 14 1,608 
4................................B992 19 8 5 976 
5................................Caa130 2 4 1 131 
6................................Ca, C28 — — 1 27 
Below investment grade2,751 22 34 21 2,742 
Total Fixed Maturities$72,545 $22 $5,125 $306 $77,342 
 
NAIC Designation(1)
Rating Agency Equivalent Amortized  Costs Gross Unrealized Gains Gross Unrealized Losses Fair Value
 
    (in millions)
 At March 31, 2018:         
 1Aaa, Aa, A $26,432
 $713
 $690
 $26,455
 2Baa 8,127
 288
 123
 8,292
  Investment grade 34,559
 1,001
 813
 34,747
          

 3Ba 250
 1
 1
 250
 4B 120
 —
 6
 114
 5C and lower 4
 —
 —
 4
 6In or near default 3
 —
 —
 3
  Below investment grade 377
 1
 7
 371
 Total Public Fixed Maturities $34,936
 $1,002
 $820
 $35,118
           
 At December 31, 2017         
 1Aaa, Aa, A $29,137
 $1,506
 $274
 $30,369
 2Baa 7,521
 434
 10
 7,945
  Investment grade 36,658
 1,940
 284
 38,314
 3Ba 304
 5
 6
 303
 4B 119
 —
 1
 118
 5C and lower 3
 —
 —
 3
 6In or near default 9
 —
 —
 9
  Below investment grade 435
 5
 7
 433
 Total Public Fixed Maturities $37,093
 $1,945
 $291
 $38,747
(1)Includes, as of March 31, 2018 and December 31, 2017, respectively, two securities with amortized cost of $4 million (fair value of $4 million) and two securities with amortized cost of $14 million (fair value of $14 million) that have been categorized based on expected NAIC designation pending receipt of SVO ratings.




111

Private Fixed Maturities Credit Quality.Mortgage Loans
The following table sets forth the General Account’s private fixed maturities portfolios by NAIC rating at the dates indicated.
Private Fixed Maturities
NAIC Designation(1)
 Rating Agency Equivalent Amortized Cost Gross Unrealized Gains Gross Unrealized Losses  Fair Value
   (in millions)
At March 31, 2018:         
1Aaa, Aa, A $4,638
 $71
 $44
 $4,665
2Baa 3,683
 71
 52
 3,702
 Investment grade 8,321
 142
 96
 8,367
3Ba 346
 1
 6
 341
4B 331
 1
 10
 322
5C and lower 18
 —
 —
 18
6In or near default 1
 2
 —
 3
 Below investment grade 696
 4
 16
 684
Total Private Fixed Maturities $9,017
 $146
 $112
 $9,051
          
At December 31, 2017:         
1Aaa, Aa, A $4,356
 $122
 $12
 $4,466
2Baa 3,610
 123
 10
 3,723
 Investment grade 7,966
 245
 22
 8,189
3Ba 358
 2
 4
 356
4B 315
 2
 7
 310
5C and lower 17
 1
 —
 18
6In or near default 2
 2
 —
 4
 Below investment grade 692
 7
 11
 688
Total Private Fixed Maturities  $8,658
 $252
 $33
 $8,877
(1)Includes, asmortgage portfolio primarily consists of March 31, 2018 and December 31, 2017, respectively, 23 securities with amortized cost of $377 million (fair value, $368 million) and 24 securities with amortized cost of $541 million (fair value, $543 million) that have been categorized based on expected NAIC designation pending receipt of SVO ratings.



112

Corporate Fixed Maturities Credit Quality.
The following table sets forth the General Account’s public and private holdings of corporate fixed maturities by NAIC rating at the dates indicated.
Corporate Fixed Maturities 
NAIC Designation(1)
Rating Agency  Equivalent Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
   (in millions)
At March 31, 2018:         
1Aaa, Aa, A $14,329
 $300
 $214
 $14,415
2Baa 11,211
 313
 168
 11,356
 Investment grade 25,540
 613
 382
 25,771
         

3Ba 594
 2
 8
 588
4B 449
 1
 15
 435
5C and lower 21
 —
 —
 21
6In or near default 2
 2
 —
 4
 Below investment grade 1,066
 5
 23
 1,048
Total Corporate Fixed Maturities $26,606
 $618
 $405
 $26,819
          
At December 31, 2017:         
1Aaa, Aa, A $13,517
 $508
 $29
 $13,996
2Baa 10,543
 510
 19
 11,034
 Investment grade 24,060
 1,018
 48
 25,030
3Ba 660
 7
 9
 658
4B 432
 3
 8
 427
5C and lower 19
 —
 —
 19
6In or near default 7
 3
 —
 10
 Below investment grade 1,118
 13
 17
 1,114
Total Corporate Fixed Maturities $25,178
 $1,031
 $65
 $26,144
(1)Includes, as of March 31, 2018 and December 31, 2017, respectively, 24 securities with amortized cost of $310 million (fair value, $304 million) and 25 securities with amortized cost of $484 million (fair value, $484 million) that have been categorized based on expected NAIC designation pending receipt of SVO ratings.

Asset-backed Securities
As of March 31, 2018, the amortized cost and fair value of asset backed securities held were $675 million and $675 million, respectively. As of December 31, 2017, the amortized cost and fair value of asset-backed securities held were $745 million and $749 million, respectively.


113

Commercial Mortgage-backed Securities
At March 31, 2018 and December 31, 2017 there were no General Account commercial mortgage-backed securities outstanding.
Mortgages
Investment Mix
As of March 31, 2018 and December 31, 2017, respectively, approximately 13.3% and 12.7%, respectively, of invested assets were in commercial and agricultural mortgage loans. The table below shows the composition of the commercial and agricultural mortgage loan portfolio, before the loss allowance, as of the dates indicated.
 March 31, 2018 December 31, 2017
 (in millions)
Commercial mortgage loans$8,755
 $8,386
Agricultural mortgage loans2,585
 2,574
Total mortgage loans$11,340
 $10,960
The investment strategy for the mortgage loan portfolio emphasizes diversification by property type and geographic location with a primary focus on asset quality. The tables below show the breakdown of the amortized cost of the General Account’s investments in mortgage loans by geographic region and property type as of the dates indicated.


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Mortgage Loans by Region and Property Type
 September 30, 2022December 31, 2021
 
Amortized
Cost
% of Total
Amortized
Cost
% of Total
(in millions)
By Region:
U.S. Regions:
Pacific$4,659 30 %$4,297 30 %
Middle Atlantic3,574 23 3,441 24 
South Atlantic2,038 13 1,982 14 
East North Central1,009 6 1,103 8 
Mountain1,374 9 978 7 
West North Central841 5 834 6 
West South Central968 6 609 5 
New England726 5 579 4 
East South Central249 2 146 1 
Total U.S.$15,438 98 %$13,969 99 %
Other Regions:
Europe$333 2 %$126 1 %
Total Other$333 2 $126 1 
Total Mortgage Loans$15,771 100 %$14,095 100 %
By Property Type:
Office$4,511 29 %$3,944 28 %
Multifamily5,417 34 4,694 33 
Agricultural loans2,597 16 2,644 19 
Retail328 2 728 5 
Industrial1,837 12 1,204 9 
Hospitality406 3 410 3 
Other675 4 471 3 
Total Mortgage Loans$15,771 100 %$14,095 100 %
 March 31, 2018 December 31, 2017
 Amortized  Cost % of Total Amortized  Cost % of Total
 (Dollars in millions)
By Region:       
U.S. Regions:       
Pacific$3,308
 29.2% $3,264
 29.8%
Middle Atlantic3,108
 27.4
 2,958
 27.0
South Atlantic1,266
 11.2
 1,096
 10.0
East North Central929
 8.2
 917
 8.4
Mountain812
 7.1
 800
 7.3
West North Central769
 6.8
 778
 7.1
West South Central507
 4.5
 499
 4.5
New England459
 4.0
 460
 4.2
East South Central182
 1.6
 188
 1.7
Total Mortgage Loans$11,340
 100.0% $10,960
 100.0%
By Property Type:       
Office Buildings$3,767
 33.2% $3,639
 33.2%
Apartment Complexes3,200
 28.2
 3,014
 27.5
Agricultural properties2,585
 22.8
 2,574
 23.5
Retail stores695
 6.1
 647
 5.9
Hospitality426
 3.8
 417
 3.8
Industrial325
 2.9
 326
 3.0
Other342
 3.0
 343
 3.1
Total mortgage loans$11,340
 100.0% $10,960
 100.0%
As of March 31, 2018Liquidity and December 31, 2017, respectively, the General Account investments in commercial mortgage loans had a weighted average loan-to-value ratio of 59% and 59%, respectively, while the agricultural mortgage loans weighted average loan-to-value ratio was 46% and 46%, respectively.


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The following tables provide information relating to the loan-to-value and debt service coverage ratios for commercial and agricultural mortgage loans as of March 31, 2018 and December 31, 2017, respectively. The values used in these ratio calculations were developed as part of the periodic review of the commercial and agricultural mortgage loan portfolio, which includes an evaluation of the underlying collateral value.
Mortgage Loans by Loan-to-Value and Debt Service Coverage Ratios
March 31, 2018
 
Debt Service Coverage Ratio(1)
  
Loan-to-Value Ratio(2)
Greater
than  2.0x
 
1.8x  to
2.0x
 
1.5x  to
1.8x
 
1.2x  to
1.5x
 
1.0x  to
1.2x
 
Less
than
1.0x
 
Total
Mortgage
Loans
 (in millions)
0% - 50%$1,012
 $174
 $597
 $569
 $321
 $29
 $2,702
50% - 70%4,588
 689
 1,341
 759
 406
 48
 7,831
70% - 90%169
 110
 144
 330
 27
 —
 780
90% plus—
 —
 27
 —
 —
 —
 27
Total commercial and agricultural mortgage loans$5,769
 $973
 $2,109
 $1,658
 $754
 $77
 $11,340
(1)The debt service coverage ratio is calculated using actual results from property operations.
(2)The loan-to-value ratio is derived from current loan balance divided by the fair market value of the property. The fair market value of the underlying commercial properties is updated annually.

December 31, 2017
 
Debt Service Coverage Ratio(1)
  
Loan-to-Value Ratio(2)
Greater
than 2.0x
 
1.8x to
2.0x
 
1.5x to
1.8x
 
1.2x to
1.5x
 
1.0x to
1.2x
 
Less than
1.0x
 
Total Mortgage
Loans
 (in millions)
0% - 50%$1,031
 $149
 $595
 $589
 $316
 $30
 $2,710
50% - 70%4,199
 728
 1,293
 787
 366
 49
 7,422
70% - 90%169
 110
 196
 276
 50
 —
 801
90% plus—
 —
 27
 —
 —
 —
 27
Total commercial and agricultural mortgage loans$5,399
 $987
 $2,111
 $1,652
 $732
 $79
 $10,960
(1)The debt service coverage ratio is calculated using actual results from property operations.
(2)The loan-to-value ratio is derived from current loan balance divided by the fair market value of the property. The fair market value of the underlying commercial properties is updated annually.





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The tables below show the breakdown of the commercial and agricultural mortgage loans by year of origination at March 31, 2018 and December 31, 2017, respectively.
Mortgage Loans by Year of Origination
 March 31, 2018
Year of OriginationAmortized Cost % of Total
 (in millions)
2018$391
 3.5%
20172,043
 18.0
20163,305
 29.1
20151,556
 13.7
20141,174
 10.4
2013 and prior2,871
 25.3
Total mortgage loans$11,340
 100.0%
 December 31, 2017
Year of OriginationAmortized Cost % of Total
 (in millions)
2017$2,026
 18.5%
20163,298
 30.1
20151,551
 14.2
20141,170
 10.7
20131,485
 13.5
2012 and prior1,430
 13.0
Total mortgage loans$10,960
 100.0%
At March 31, 2018 and December 31, 2017, respectively, $66 million and $49 million of mortgage loans were classified as problem loans while $0 million and $0 million were classified as potential problem loans.
Valuation allowances for the commercial mortgage loan portfolio were related to loan specific reserves. The following table sets forth the change in valuation allowances for the commercial mortgage loan portfolio as of the dates indicated. There were no valuation allowances for agricultural mortgages at March 31, 2018 and March 31, 2017.
Commercial Mortgage Loans
 2018 2017
Allowance for credit losses:(in millions)
Beginning Balance, January 1$8
 $8
Charge-offs—
 —
Recoveries(1) —
Provision—
 —
Ending Balance, March 31$7
 $8
Ending Balance, March 31:   
Individually Evaluated for Impairment$7
 $8


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Other Equity Investments
At March 31, 2018 and December 31, 2017, private equity partnerships, hedge funds and real-estate related partnerships were 98.8% and 87.5%, respectively of total other equity investments. These interests, which represent 1.5% and 1.3%, respectively of GAIA, consist of a diversified portfolio of LBO mezzanine, venture capital and other alternative limited partnerships, diversified by sponsor, fund and vintage year. The portfolio is actively managed to control risk and generate investment returns over the long term. Portfolio returns are sensitive to overall market developments.
Other Equity Investments - Classifications
 March 31, 2018 December 31, 2017
 (in millions)
Common stock$13
 $158
Joint ventures and limited partnerships:   
Private equity963
 927
Hedge funds152
 179
Total Other Equity Investments$1,128
 $1,264
As a result of the adoption of the Recognition and Measurement of Financial Assets and Financial Liabilities standard on January 1, 2018 (Financial Instruments Recognition and Measurement Standard), equity securities are no longer classified and accounted for as available for sale securities.
Derivatives
We use derivatives as part of our overall asset/liability risk management primarily to reduce exposures to equity market and interest rate risks. Derivative hedging strategies are designed to reduce these risks from an economic perspective and are all executed within the framework of a Derivative Use Plan (“DUP”) approved by applicable states’ insurance law. Derivatives are generally not accounted for using hedge accounting. Operation of these hedging programs is based on models involving numerous estimates and assumptions, including, among others, mortality, lapse, surrender and withdrawal rates, election rates, fund performance, market volatility and interest rates. A wide range of derivative contracts are used in these hedging programs, including exchange traded equity, currency and interest rate futures contracts, total return swaps on equity, bond and Treasury indices, total return swaps on single U.S. Treasury Securities, interest rate swaps bond and bond-index total return swaps, swaptions, variance swaps, equity options, credit and foreign exchange derivatives, as well as bond and repo transactions to support the hedging.
Derivatives used to hedge exposure to variable annuity products with GMxB features
We have issued and continue to offer certain variable annuity products with GMxB features. The risk associated with the GMDB feature is that under-performance of the financial markets could result in GMDB benefits, in the event of death, being higher than what accumulated policyholders’ account balances would support. The risk associated with the GMLB features is that under-performance of the financial markets could result in the GMLB features’ benefits being higher than what accumulated policyholders’ account balances would support.
For GMxB features, we retain certain risks including basis, credit spread and some volatility risk and risk associated with actual versus expected actuarial assumptions for mortality, lapse and surrender, withdrawal, policyholder election rates and other behaviors. The derivative contracts are managed to correlate with changes in the value of the GMxB features that result from financial markets movements. A portion of exposure to realized equity volatility is hedged using equity options and variance swaps and a portion of exposure to credit risk is hedged using total return swaps on fixed income indices. Additionally, we are party to total return swaps for which the reference U.S. Treasury securities are contemporaneously purchased from the market and sold to the swap counterparty. As these transactions result in a transfer of control of the U.S. Treasury securities to the swap counterparty, we derecognize these securities with consequent gain or loss from the sale. We have also purchased reinsurance


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contracts to mitigate the risks associated with GMDB features and the impact of potential market fluctuations on future policyholder elections of GMIB features contained in certain annuity contracts issued by us.
Derivatives used to hedge crediting rate exposure on SCS, SIO, MSO and IUL products/investment options
We hedge crediting rates in SCS, SIO in the EQUI-VEST variable annuity product series, MSO in the variable life insurance products and IUL insurance products. These products permit the contract owner to participate in the performance of an index, ETF or commodity price movement up to a cap for a set period of time. They also contain a protection feature, in which we will absorb, up to a certain percentage, the loss of value in an index, ETF or commodity price, which varies by product segment.
In order to support the returns associated with these features, we enter into derivative contracts whose payouts, in combination with fixed income investments, emulate those of the index, ETF or commodity price, subject to caps and buffers.
Other derivatives based hedges
From time to time and depending on market and other conditions we hedge additional risks not otherwise covered by our variable annuity product hedge programs. Such hedge programs include:
the net duration of our General Account economic liability and assets;
expected income from fees on Separate Account AUM against declines in equity markets;
the economic impact of lower interest-rates on expected variable annuity product sales;
the equity exposure of General Account assets; and
the credit exposure of General Account assets.
Derivatives utilized for General Account investment portfolio
We maintain a strategy in our General Account investment portfolio to replicate the exposure of fixed maturity securities otherwise permissible for investment under our investment guidelines. Examples include corporate bond exposure replicated through the sale of credit default swaps together with the purchase of a Treasury bond and Treasury bond exposure replicated through the sale of an asset swap and the purchase the bond referenced in the asset swap.
These asset swaps, when considered in combination with the bonds, result a yield higher than a term-equivalent U.S. Treasury bond.
The tables below present quantitative disclosures about our derivative instruments, including those embedded in other contracts required to be accounted for as derivative instruments.


119

Derivative Instruments by Category
 At March 31, 2018
   Fair Value Gains (Losses) Reported in Net Earnings (Loss) Three Months Ended March 31, 2018
 
Notional
Amount  
 
Asset
Derivatives  
 
Liability
Derivatives  
 
 (in millions)
Freestanding derivatives       
Equity contracts:(1)
       
Futures$6,450
 $—
 $—
 $(24)
Swaps7,881
 253
 15
 112
Options23,013
 3,350
 1,411
 (18)
Interest rate contracts:(1)
       
Floors—
 —
 —
 —
Swaps29,281
 555
 394
 (672)
Futures24,015
 —
 —
 40
Swaptions—
 —
 —
 —
Credit contracts:(1)
       
Credit default swaps2,057
 30
 1
 —
Other freestanding contracts:(1)
       
Foreign currency contracts1,623
 1
 44
 (51)
Margin
 59
 57
 

Collateral
 16
 2,207
 
Embedded derivatives:       
GMIB reinsurance contracts(4)
—
 1,734
 —
 (161)
GMxB derivative features liability(2,4)
—
 —
 3,977
 (460)
SCS, SIO, MSO and IUL indexed features(3,4)
—
 —
 1,683
 (279)
Total$94,320
 $5,998
 $9,789
 $(1,513)
(1)Reported in Other invested assets in the consolidated balance sheets.
(2)Reported in Future policy benefits and other policyholders’ liabilities in the consolidated balance sheets.
(3)SCS and SIO indexed features are reported in Policyholders’ account balances; MSO and IUL indexed features are reported in the Future policyholders’ benefits and other policyholders’ liabilities in the consolidated balance sheets.
(4)Reported in Net derivative gains (losses) in the consolidated statements of income (loss).



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Derivative Instruments by Category
 At December 31, 2017 
Gains (Losses) Reported in Net Earnings (Loss)
March 31, 2017
   Fair Value 
 Notional
Amount  		 Asset
Derivatives  		 Liability
Derivatives  		 
 (in millions)
Freestanding derivatives       
Equity contracts:(1)
       
Futures$6,552
 $—
 $—
 $(391)
Swaps7,555
 3
 200
 (403)
Options22,223
 3,456
 1,457
 318
Interest rate contracts:(1)
       
Floors—
 —
 —
 —
Swaps26,725
 603
 192
 143
Futures20,675
 —
 —
 (19)
Credit contracts:(1)
       
Credit default swaps2,057
 34
 2
 6
Other freestanding contracts:(1)
       
Foreign currency contracts1,297
 11
 2
 —
Margin—
 18
 4
 —
Collateral—
 4
 2,123
 —
Embedded derivatives:       
GMIB reinsurance contracts(4)
—
 1,894
 —
 (514)
GMxB derivative features liability(2,4)
—
 —
 4,358
 (58)
SCS, SIO, MSO and IUL indexed features(3,4)
—
 —
 1,786
 (301)
Total$87,084
 $6,023
 $10,124
 $(1,219)

(1)Reported in Other invested assets in the consolidated balance sheets.
(2)Reported in Future policy benefits and other policyholders’ liabilities in the consolidated balance sheets.
(3)SCS and SIO indexed features are reported in Policyholders’ account balances; MSO and IUL indexed features are reported in the Future policyholders’ benefits and other policyholders’ liabilities in the consolidated balance sheets.
(4)Reported in Net derivative gains (losses) in the consolidated statements of income (loss).
Realized Investment Gains (Losses)
Realized investment gains (losses) are generated from numerous sources, including the sale of fixed maturity securities, equity securities, investments in limited partnerships and other types of investments, as well as adjustments to the cost basis of investments for OTTI. Realized investment gains (losses) are also generated from prepayment premiums received on private fixed maturity securities, recoveries of principal on previously impaired securities, provisions for losses on commercial mortgage and other loans, fair value changes on commercial mortgage loans carried at fair value, and fair value changes on embedded derivatives and free-standing derivatives that do not qualify for hedge accounting treatment.



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The following table sets forth “Realized investment gains (losses), net,” for the periods indicated:
Realized Investment Gains (Losses), Net
 Three Months Ended March 31,
 2018 2017
 (in millions)
Fixed maturities$109
 $(6)
Other equity investments—
 4
Other—
 —
Total$109
 $(2)

The following table further describes realized gains (losses), net for Fixed maturities for the periods indicated:
Fixed Maturities
Realized Investment Gains (Losses)
 Three Months Ended March 31,
 2018 2017
 (in millions)
Gross realized investment gains:   
Gross gains on sales and maturities$161
 $20
Other—
 —
Total gross realized investment gains161
 20
Gross realized investment losses:   
Other-than-temporary impairments recognized in income (loss)—
 —
Gross losses on sales and maturities(52) (26)
Total gross realized investment losses(52) (26)
Total$109
 $(6)

Other-Than-Temporary Impairments Recorded in Earnings (Losses)
At March 31, 2018 and 2017, there were no General Account other-than-temporary impairments recorded in Income (Loss).




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LIQUIDITY AND CAPITAL RESOURCESCapital Resources
Liquidity refers to our ability to generate adequate amounts of cash from our operating, investment and financing activities to meet our cash requirements with a prudent margin of safety. Capital refers to our long-term financial resources available to support business operations and future growth. Our ability to generate and maintain sufficient liquidity and capital is dependent on the profitability of our businesses, timing of cash flows related to our investments and products, our ability to access the capital markets, general economic conditions and the alternative sources of liquidity and capital described herein. When considering our liquidity and cash flows, it is important towe distinguish between the needs of Holdings and the needs of our insurance and non-insurance subsidiaries. We also distinguish and separately manage the liquidity and capital resources of our retirement and protection businesses including our(our Individual Retirement, Group Retirement and Protection Solutions segments,segments) and our Investment Management and Research segment.
Sources and Uses of Liquidity and Capital Position
The Company has sufficient cash flows from operations to satisfy liquidity requirements in 2022.
Cash Flows of Holdings
As a holding company with no business operations of its own, Holdings primarily derives cash flows from dividends and interest payments from its insurance subsidiaries and distributions related to its economic interest in AB, more than halfall of which is currently held outside our insurance company subsidiaries, after giving effect to the AB Reorganization Transactions.subsidiaries. These principal sources of liquidity are augmented by cash and short-term investments held by Holdings and access to bank lines of credit and the capital markets. The main uses of liquidity for Holdings are interest payments and debt repayment, payment of dividends and other distributions to stockholders which(which may include stock repurchases,repurchases) loans and
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capital contributions, if needed, to our insurance subsidiaries. Our principal sources of liquidity and our capital position are described in the following paragraphs.
Historical
Sources and Uses of Holding Company Highly Liquid Assets
The following table sets forth Holdings’ principal sources and uses of highly liquid assets for the periods indicated.
Nine Months Ended September 30,
20222021
(in millions)
Highly Liquid Assets, beginning of period$1,742 $3,088 
Dividends from subsidiaries1,574 545 
Capital contributions to subsidiaries(150)(760)
M&A Activity— 215 
Total Business Capital Activity1,424 — 
Purchase of treasury shares(699)(1,169)
Shareholder dividends paid(220)(224)
Total Share Repurchases, Dividends and Acquisition Activity(919)(1,393)
Issuance of preferred stock— 293 
Preferred stock dividend(54)(53)
Total Preferred Stock Activity(54)240 
Issuance of long-term debt— — 
Repayment of long-term debt— (280)
Total External Debt Activity— (280)
Proceeds from loans from affiliates— 1,000 
Net decrease (increase) in existing facilities to affiliates (1)65 285 
Total Affiliated Debt Activity65 1,285 
Interest paid on external debt and P-Caps(116)(140)
Others, net89 (278)
Total Other Activity(27)(418)
Net increase (decrease) in highly liquid assets489 (566)
Highly Liquid Assets, end of period$2,231 $2,522 
(1) Represents net activity of draws and repayments of existing credit facilities between Holdings and affiliates.
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Capital Contribution to Our Subsidiaries
During the nine months ended September 30, 2022, Holdings made cash capital contributions of $150 million.
Loans from Our Subsidiaries
There were no loans from our subsidiaries during the nine months ended September 30, 2022.
Cash Distributions from Our Subsidiaries
From 2014 to 2016,During the nine months ended September 30, 2022, Holdings and AXA Financialcertain of its subsidiaries received net distributions from our subsidiaries of $2.6 billion. These net distributions comprised dividends and principal payments on surplus notes from our insurance subsidiaries ($1.2 billion, $1.0 billion and $1.1 billion in 2014, 2015 and 2016, respectively),pretax cash distributions from AB ($70 million, $72of $481 million and $85 million in 2014, 2015 and 2016, respectively) andpost-tax distributions from AXA Advisors ($30 million, $30Equitable Financial of $930 million and $33 million in 2014, 2015 and 2016, respectively), partially offset by a contribution by AXA Financial to AXA RE Arizona to enhance its balance sheet and liquidity position. In addition, AXA Financial also received dividendsEIM of $85 million in 2015 related to certain real estate assets. During this period, we also received $1.9 billion of net proceeds from the sale of certain real estate assets by AXA Financial. In 2017, in accordance with our agreement with the New York State Department of Financial Services (the “NYDFS”) and in preparation for the IPO, Holdings and AXA Financial collectively made $2.3 billion in aggregate capital contributions to AXA Equitable Life and AXA RE Arizona, and AXA Financial received a $124 million distribution on the AB Units held by it and a $74 million distribution from AXA Advisors and U.S. Financial Life Insurance Company.$164 million.
Distributions from Insurance Subsidiaries
Our insurance companies are subject to limitations on the payment of dividends and other transfers of funds to Holdings and other affiliates under applicable insurance law and regulation. Also, more generally, the ability of our insurance subsidiaries to pay dividends can be affected by market conditions and other factors beyond our control.
Under New York insurance lawlaws, which are applicable to AXA Equitable Life,Financial, a domestic stock life insurer may not, without prior approval of the NYDFS, pay aan ordinary dividend to its stockholders exceeding an amount calculated under one of two standards. The first standard allows payment of an ordinary dividend out of the insurer’s earned surplus (as reportedbased on the insurer’s most recent annual statement) up to a limit calculated pursuant to a statutory formula provided that the NYDFS is given notice and opportunity to disapprove the dividend if certain qualitative tests are not met (the “Earned Surplus Standard”). The second standard allows payment of an ordinary dividend up to a limit calculated pursuant to a different statutory formula without regard to the insurer’s earned surplus (the “Alternative Standard”(“Ordinary Dividend”). Dividends exceeding these prescribed limitsin excess of this amount require the insurer to file a notice of its intent to declare the dividends with the NYDFS and obtain prior approval or non-disapproval from the NYDFS.
NYDFS with respect to such dividends (“Extraordinary Dividends”). Due to a permitted statutory accounting practice agreed to with the NYDFS, Equitable Financial will need the prior approval of the NYDFS to pay the portion, if any, of any Ordinary Dividend that exceeds the Ordinary Dividend that Equitable Financial would be permitted to pay under New York insurance law absent the application of such permitted practice (such excess, the “Permitted Practice Ordinary Dividend”). Applying the formulas under these standards and the definition of earned surplus used in the Earned Surplus Standard, AXAformula above, Equitable LifeFinancial could pay ordinary dividendsan Ordinary Dividend of up to approximately $1.2$0.9 billion in 2022 without the prior approval of the NYDFS. Holdings received a dividend distribution from Equitable Financial of $0.9 billion during 2018 and could have paid ordinary dividends of up to approximately $1.2 billion during 2017. However, in 2016, the NYDFS issued a circular letter to its regulated insurance companies stating that ordinary dividends which exceed an insurer’s positive unassigned funds (as reported on theJuly 2022.


123

insurer’s most recent annual statement) may fail one of the qualitative tests imposed by the Earned Surplus Standard. Given the circular letter, it is possible that the NYDFS could limit the amount of ordinary dividends declared by AXA Equitable Life under the Earned Surplus Standard to the amount of AXA Equitable Life’s positive unassigned funds. As of December 31, 2017 and December 31, 2016, AXA Equitable Life’s unassigned funds reported on its statutory financial statements were approximately $1.9 billion and $0.9 billion, respectively.
In the second quarter of 2017, AXA Equitable Life agreed with the NYDFS that until it (i) filed a plan with respect to the management of our variable annuity business ceded to AXA RE Arizona with the NYDFS and (ii) fully implement that plan (the “DFS Conditions”), it would pay ordinary dividends only under the Earned Surplus Standard.
The completion of the unwind of the reinsurance provided to AXA Equitable Life by AXA RE Arizona for certain variable annuities with GMxB features (the “GMxB Unwind”), which occurred on April 12, 2018, satisfied the DFS Conditions, and, going forward, satisfaction of either the Earned Surplus Standard or Alternative Standard will determine AXA Equitable Life’s ability to pay ordinary dividends. Our other insurance subsidiaries that reside outside of New York are subject to legal restrictions on dividends similar to those described above under New York law, though the specifics of such rules vary from state to state.
Distributions from AllianceBernstein
ABLP is required to distribute all of its Available Cash Flow, as defined in the Amended and Restated Partnership Agreement of ABLP, to the holders of AB Units and to the General Partner. Available Cash Flow can be summarizedis defined as the cash flow received by ABLP from operations minus such amounts as the General Partner determines, in its sole discretion, should be retained by ABLP for use in its business, or plus such amounts as the General Partner determines, in its sole discretion, should be released from previously retained cash flow. Distributions by ABLP are made 1% to the General Partner and 99% among the limited partners.
Typically, Available Cash Flow has been the adjusted diluted net income per unit for the quarter multiplied by the number of general and limited partnership interests at the end of the quarter. In future periods, management of AB anticipates that Available Cash Flow will be based on adjusted diluted net income per unit, unless management of AB determines, with the concurrence of the Board of Directors of AB, that one or more adjustments that are made for adjusted net income should not be made with respect to the Available Cash Flow calculation.
AB Holding is required to distribute all of its Available Cash Flow, as defined in the Amended and Restated Agreement of Limited Partnership of AB Holding, to holders of units representing assignments of beneficial ownership of limited partnership interests in AB Holding (“AB Holding Units”)Units pro rata in accordance with their percentage interestsinterest in AB Holding. Available Cash Flow is defined as the cash distributions AB Holding receives from ABLP minus such amounts as the General Partner determines, in its sole discretion, should be retained by AB Holding for use in its business (such as the payment of taxes) or plus such amounts as the General Partner determines, in its sole discretion, should be released from previously retained cash flow. AB Holding is dependent on the quarterly cash distributions it receives from ABLP, which is subject to the performance of capital markets and other factors beyond our control. Distributions from AB Holding are made pro rata based on the holder’s percentage ownership interest in AB Holding.
Following the AB Reorganization Transactions,As of September 30, 2022, Holdings and its non-insurance company subsidiaries now hold 93.1approximately 170.1 million AB Units, and 2.3 million AB Holding Units directly, while 77 million AB Units, 1.44.1 million AB Holding Units and the 1% General Partnership interest in AB are now held by AXA Equitable Life and MLOA, two of our insurance company subsidiaries. Because AXA Equitable Life and MLOA are subject to regulatory restrictions on dividends, distributions they receive from AB may not be distributable to Holdings.ABLP.
As of March 31, 2018,September 30, 2022, the ownership structure of ABLP, including AB Units outstanding as well as the general partner’s 1% interest, was as follows:
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AXAOwnerPercentage Ownership
EQH and its subsidiaries63.062.8 %
AB Holding35.836.5 
%
Unaffiliated holders1.20.7 
%
Total100.0%
Including both the general partnership and limited partnership interests in AB Holding and ABLP, AXAHoldings and its subsidiaries had an approximate 64.4%64% economic interest in AB as of September 30, 2022. The issuance of AB Units relating to the CarVal acquisition is not expected to have a significant impact on the Company’s cash flows.
Holdings Credit Facilities
On June 24, 2021, Holdings entered into the Amended and Restated Revolving Credit Agreement with respect to a five-year senior unsecured revolving credit facility (the “Credit Facility”), which lowered the facility amount to $1.5 billion and extended the maturity date to June 24, 2026, among other changes. The Amended and Restated Revolving Credit Agreement amends the Revolving Credit Agreement entered into by Holdings on February 16, 2018, as amended on March 31,22, 2021.
The Credit Facility may provide significant support to our liquidity position when alternative sources of credit are limited. In addition to the Credit Facility, we have letter of credit facilities with an aggregate principal amount of approximately $1.9 billion (the “LOC Facilities”), primarily to be used to support our life insurance business reinsured to EQ AZ Life Re in April 2018. In June 2021, Holdings entered into amendments with each of the issuers of its bilateral letter of credit facilities to effect changes similar to those effected in the amended and restated revolving credit agreement. The respective facility limits of the bilateral letter of credit facilities remained unchanged.

The Credit Facility and LOC Facilities contain certain administrative, reporting, legal and financial covenants, including requirements to maintain a specified minimum consolidated net worth and to maintain a ratio of indebtedness to total capitalization not in excess of a specified percentage, and limitations on the dollar amount of indebtedness that may be incurred by our subsidiaries and the dollar amount of secured indebtedness that may be incurred by us, which could restrict our operations and use of funds. The right to borrow funds under the Credit Facility and LOC Facilities is subject to the fulfillment of certain conditions, including compliance with all covenants, and the ability to borrow thereunder is also subject to the continued ability of the lenders that are or will be parties to the facilities to provide funds. As of September 30, 2022, we were in compliance with these covenants.

124Contingent Funding Arrangements
TableFor information regarding activity pertaining to our contingent funding arrangements and other off-balance sheet commitments, see “Commitments and Contingent Liabilities” in Note 12 of Contents
the Notes to the Consolidated Financial Statements in this Form 10-Q.

Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock
For information pertaining to our Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock see Note 10 of the Notes to the Consolidated Financial Statements.
Capital Position Following the IPOof Holdings
We manage our capital position to maintain financial strength and credit ratings that facilitate the distribution of our products and provide our desired level of access to the bank and public financingcapital markets. Our capital position is supported by the ability of our subsidiaries to generate cash flows and distribute cash to us and our ability to effectively manage the risk of our businesses and to borrow funds and raise capital to meet our operating and growth needs.
We have historically operated with a capital structure that reflected our status as a wholly owned subsidiary of AXA, including relying on financing provided or guaranteed by AXA and its affiliates. To meet our target capitalization following the IPO, we have taken certain significant actions that have impacted our liquidity and capital position and that align our capital structure more closely with other U.S. public companies. These actions include:
issuing debt securities to third party investors: (i) $800 million aggregate principal amount of 3.900% Senior Notes due 2023, (ii) $1.5 billion aggregate principal amount of 4.350% Senior Notes due 2028 and (iii) $1.5 billion aggregate principal amount of 5.000% Senior Notes due 2048, to replace intercompany financing that is provided or guaranteed by AXA and its affiliates, among other things;
arranging additional contingent financing facilities, including (i) letter of credit facilities with an aggregate principal amount of $1.9 billion, primarily to be used to support our life insurance business reinsured to EQ AZ Life Re following the GMxB Unwind, (ii) a five-year senior unsecured revolving credit facility for an amount of approximately $2.5 billion, and (iii) a three-year senior unsecured term loan facility of up to $500 million;
borrowing $300 million under our three-year term loan agreement;
terminating the outstanding balance issued under AXA Financial’s commercial paper program;
(i) a capital contribution of $318 million and (ii) the $622 million loan from AXA, which was set off against AXA’s payment obligation to Holdings with respect to the sale of AXA CS shares;
increasing the statutory capital and reserves of our retirement and protection businesses by approximately $2.3 billion in 2017;
selling AXA Equitable Life’s interest in two real estate joint ventures to AXA France for a total purchase price of $143 million, which resulted in the elimination of $203 million of long-term debt on Holdings’ consolidated balance sheet for the first quarter of 2018 and a corresponding reduction of our debt-to-capital ratio; and
implementing the Reorganization Transactions (as defined in the Prospectus) which included the direct or indirect acquisition of an additional 18.7% economic interest in AB and the GMxB Unwind.
Waiver Letter Agreements
In April 2018, we entered into waiver letter agreements with the lenders under each of our credit facilities and the letter of credit facilities, pursuant to which the lenders waived certain defaults or events of default under such facilities resulting from the restatement of our annual financial statements for the year ended December 31, 2016, the restatement of our interim financial statements for the nine months ended September 30, 2017 and for the six months ended June 30, 2017, the failure to furnish audited financial statements for the year ended December 31, 2017 on a timely basis as required by such facilities and related matters. There can be no assurance that our lenders will provide such waivers in the future. For a discussion of the restatement to our 2016 annual financial statements, see Note 1 to the Notes to Consolidated Financial Statements included in the Prospectus.
Capital Management
Prior to the IPO, as a wholly owned subsidiary of AXA, we adopted and abided by capital management policies determined by AXA and managed by AXA on a worldwide basis. Following the IPO, our board of directors (the “Board”)Our Board and senior management are directly involved in the development of our capital management policies. Accordingly, capital actions, including proposed changes to the annual capital plan, capital targets and capital policies, are approved by the Board.

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Dividends Declared and Paid
The declaration and payment of future dividends is subject to the discretion of our Board of Directors and depends on our financial condition, results of operations, cash requirements, future prospects, regulatory restrictions on the payment of dividends by Holdings’ insurance subsidiaries and other factors deemed relevant by the Board. 
The payment of dividends will be substantially restricted in the event that we do not declare and pay (or set aside) dividends on the Series A , Series B and Series C Preferred Stock for the last proceeding dividend period. For additional information on our preferred stock, see “—Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock”.
For information regarding activity pertaining to common and preferred dividends declared and paid, see Note 10 of the Notes to the Consolidated Financial Statements.
Share Repurchase Programs
For information regarding activity pertaining to share repurchase programs, see Note 10 of the Notes to the Consolidated Financial Statements.
Sources and Uses of Liquidity of Our Insurance Subsidiaries
The principal sources of liquidity for our insurance subsidiaries are premiums, investment and fee income, deposits associated with our insurance and annuity operations, cash and invested assets, as well as internal borrowings. The principal uses of that liquidity include benefits, claims and dividends paid to policyholders and payments to policyholders in connection with surrenders and withdrawals. Other uses of liquidity include commissions, general and administrative expenses, purchases of investments, the payment of dividends to Holdings and hedging activity. Certain of our insurance subsidiaries’ principal sources and uses of liquidity are described in the paragraphs that follow.
We manage the liquidity of our insurance subsidiaries with the objective of ensuring that they are able tocan meet payment obligations linked to our Individual Retirement, Group Retirement and Protection Solutions businesses and to their outstanding debt and derivative positions, including in our hedging programs, without support from Holdings. We employ an asset/liability management approach specific to the requirements of each of our insurance businesses. We measure liquidity against internally-developed benchmarks that consider the characteristics of our asset portfolio and the liabilities that it supports.supports in both the short-term (the next 12 months) and long-term (beyond the next 12 months). We consider attributes of the various categories of our liquid assets (for example, type of asset and credit quality) in calculating internal liquidity indicators for our insurance and reinsurance operations. Our liquidity benchmarks are established for various stress scenarios and durations, including company-specific and market-wide events. The scenarios we use to evaluate the liquidity of our subsidiaries are defined to allow operating entities to operate without support from Holdings.
Liquid Assets
The investment portfolios of our insurance subsidiaries are a significant component of our overall liquidity. Liquid assets include cash and cash equivalents, short-term investments, U.S. Treasury fixed maturities, fixed maturities that are not designated as held-to-maturityHTM and public equity securities. We believe that our business operations and the liquidity profile of our assets provide sufficient liquidity under reasonably foreseeable stress scenarios for each of our insurance subsidiaries.
See “—General Account Investment Assets Portfolio” and Note 3 and Note 4 of the Notes to the Consolidated Financial Statements for a description of our retirement and protection businesses’ portfolio of liquid assets.
Hedging Activities
Because the future claims exposure on our insurance products, and in particular our variable annuity products with GMxB features, is sensitive to movements in the equity markets and interest rates, we have in place various hedging and reinsurance programs that are designed to mitigate the economic risks of movements in the equity markets and interest rates. We use derivatives as part of our overall asset/liability risk management program primarily to reduce exposures to equity market and interest rate risks. In addition, we use credit derivatives to replicate exposure to individual securities or pools of securities as a means of achieving credit exposure similar to bonds of the underlying issuer(s) more efficiently. The derivative contracts are an integral part of our risk management program, especially for the management of our variable annuities program, and are collectively managed to reduce the economic impact of unfavorable movements in capital markets. These derivative transactions require liquidity to meet payment obligations such as payments for periodic settlements, purchases, maturities and terminations as well as liquid assets pledged as collateral related to any decline in the net estimated fair value. Collateral calls
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represent one of our biggest drivers for liquidity needs for our insurance subsidiaries. Historically, we have managed our liquidity needs related to our derivative portfolio at AXA Financial and AXA RE Arizona on a combined basis. Due to the limited size of the AXA RE Arizona investment portfolio, we have historically supported its collateral funding needs through AXA Financial’s commercial paper program. Following the GMxB Unwind, which was effected on April 12, 2018, ourOur derivatives contracts reside primarily within AXA Equitable Life. As AXA Equitable LifeFinancial, which has a significantly largerlarge investment portfolio than AXA RE Arizona had, we anticipate a reduced need for overall liquidity going forward.portfolio.
FHLB Membership
AXA Equitable Life is a memberFinancial and Equitable America are members of the Federal Home Loan Bank of New York (“FHLBNY”),FHLB, which provides AXA Equitable Life with access to collateralized borrowings and other FHLBNYFHLB products. At March 31, 2018, we had $500 million
See Note 12 of outstanding short-termthe Notes to the Consolidated Financial Statements for further description of our FHLB program.
FABN
Under the FABN program, Equitable Financial may issue funding agreements and $2.5 billionin U.S. dollar or other foreign currencies.
See Note 12 of long-term outstanding funding agreements issuedthe Notes to the FHLBNY and had posted $4.5 billion securities as collateralConsolidated Financial Statements for funding agreements. In addition, AXA Equitable Life implemented a hedgefurther description of our FABN program.


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to lock in the funding agreements borrowing rate, and $13 million of hedge impact was reported as funding agreement carrying value. MLOA also became a member of the Federal Home Loan Bank of San Francisco in February 2018.
Sources and Uses of Liquidity of our Investment Management and Research Segment
The principal sources of liquidity for our Investment Management and Research business include investment management fees and borrowings under its revolving credit facilityfacilities and commercial paper program. The principal uses of liquidity include general and administrative expenses, business financing and distributions to holders of AB Units and AB Holding Units plus interest and debt service. The primary liquidity risk for our fee-based Investment Management and Research business is its profitability, which is impacted by market conditions and our investment management performance.
AB Commercial Paper
As of September 30, 2022 and December 31, 2021, AB had no commercial paper outstanding. The commercial paper is short term in nature, and as such, recorded value is estimated to approximate fair value (and considered a Level 2 security in the fair value hierarchy). Average daily borrowings for the commercial paper outstanding during the first nine months of 2022 and full year 2021 were $202 million and $157 million, respectively, with weighted average interest rates of approximately 0.9% and 0.2%, respectively.
AB Revolver Credit Facility
AB had a $200 million committed, unsecured senior revolving credit facility (the "AB Revolver") with a leading international bank, which matured on November 16, 2021. Average daily borrowings for the full year 2021 were $13 million with a weighted average interest rate of 1.1%.
AB Credit Facility
AB has a $1.0 billionan $800 million committed, unsecured senior revolving credit facility (the “AB Credit Facility”) with a group of commercial banks and other lenders which matures on October 22, 2019.13, 2026. The credit facility provides for possible increases in the principal amount by up to an aggregate incremental amount of $250$200 million. Any such increase is subject to the consent of the affected lenders. The AB Credit Facility is available for AB and SCB LLC for business purposes, including the support of AB’s $1.0 billion commercial paper program. Both AB and SCB LLC can draw directly under the AB Credit Facility and AB management expects to draw on the AB Credit Facility from time to time. AB has agreed to guarantee the obligations of SCB LLC under the AB Credit Facility.
The AB Credit Facility contains affirmative, negative and financial covenants, which are customary for facilities of this type, including, among other things, restrictions on dispositions of assets, restrictions on liens, a minimum interest coverage ratio and a maximum leverage ratio. As of March 31, 2018,September 30, 2022, AB was in compliance with these covenants. The AB Credit Facility also includes customary events of default (with customary grace periods, as applicable), including provisions under which, upon the occurrence of an event of default, all outstanding loans may be accelerated and/or lender’s commitments may be terminated. Also, under such provisions, upon the occurrence of certain insolvency- or bankruptcy-related events of default, all amounts payable under the AB Credit Facility would automatically become immediately due and payable, and the lender’s commitments would automatically terminate.
Amounts under the Credit Facility may be borrowed, repaid and re-borrowed by us from time to time until the maturity of the facility. Voluntary prepayments and commitment reductions requested by AB are permitted at any time without a fee (other than customary breakage costs relating to the prepayment of any drawn loans) upon proper notice and subject to a minimum dollar requirement. Borrowings under the AB Credit Facility bear interest at a rate per annum, which will be, at AB’s option, a
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rate equal to an applicable margin, which is subject to adjustment based on the credit ratings of AB, plus one of the following indices: LIBOR; a floating base rate; or the Federal Funds rate.
As of March 31, 2018September 30, 2022 and December 31, 2017,2021, AB and SCB LLC had no amounts outstanding under the AB Credit Facility. During the first threenine months of 20182022 and the full year 2017,2021, AB and SCB LLC did not draw upon the AB Credit Facility.
AB has a $200 million, unsecured 364-day senior revolving credit facility (the “AB Revolver”) with a leading international bank and the other lending institutions that may be party thereto. The AB Revolver is available for AB’s and SCB LLC’s business purposes, including the provision of additional liquidity to meet funding requirements primarily related to SCB LLC’s operations. Both AB and SCB LLC can draw directly under the AB Revolver and management expects to draw on the AB Revolver from time to time. AB has agreed to guarantee the obligations of SCB LLC under the AB Revolver. The AB Revolver contains affirmative, negative and financial covenants that are identical to those of the AB Credit Facility. As of March 31, 2018, AB had no amounts outstanding under the AB Revolver. As of December 31, 2017, AB had $75 million outstanding under the AB Revolver. Average daily borrowing of the AB Revolver during the first three months of 2018 and full year 2017 were $22 million and $21 million, respectively, with weighted average interest rates of approximately 2.4% and 2.0%, respectively.
In addition, SCB LLC alsocurrently has threefive uncommitted lines of credit with threefive financial institutions. TwoFour of these lines of credit permit us to borrowborrowing up to an aggregate of $175approximately $315 million, with AB named as an additional borrower, while the other line has no stated limit. As of March 31, 2018September 30, 2022 and December 31, 2017,2021, SCB LLC had no bank loans outstanding.outstanding balance on these lines of credit. Average daily borrowings of bank loans during the first threenine months of 20182022 and the full year 20172021 were $3$1.2 million and $5 million, respectively$47 thousand with weighted average interest rates of approximately 1.5%1.9% and 1.4%0.9%, respectively.
Consolidated Cash Flows Analysis
We believe that cash flowsEQH Facility
AB has a $900 million committed, unsecured senior credit facility (the “EQH Facility”). The EQH Facility matures on November 4, 2024 and is available for AB’s general business purposes. Borrowings under the EQH Facility generally bear interest at a rate per annum based on prevailing overnight commercial paper rates.
The EQH Facility contains affirmative, negative and financial covenants which are substantially similar to those in AB’s committed bank facilities. The EQH Facility also includes customary events of default substantially similar to those in AB’s committed bank facilities, including provisions under which, upon the occurrence of an event of default, all outstanding loans may be accelerated and/or the lender’s commitment may be terminated.
Amounts under the EQH Facility may be borrowed, repaid and re-borrowed by AB from our operations ontime to time until the maturity of the facility. AB or Holdings may reduce or terminate the commitment at any time without penalty upon proper notice. Holdings also may terminate the facility immediately upon a consolidated basis are adequate to satisfy current liquidity requirements. The continued adequacychange of our liquidity will depend upon factors such as future market conditions, changes incontrol of AB’s general partner.
As of September 30, 2022 and December 31, 2021, AB had $690 million and $755 million outstanding under the EQH Facility, with interest rate levels, policyholder perceptionsrates of our financial strength, policyholder behavior,approximately 3.0% and 0.2%, respectively. Average daily borrowing of the effectivenessEQH Facility during the first nine months of our hedging programs, catastrophic events2022 and the relative safetyfull year 2021 were $654 million and attractiveness$405 million, respectively, with a weighted average interest rates of competing products. Changes in any of these factors may result in reduced or increased cash outflows. Our cash flows from investment activities result from repayments of principal, proceedsapproximately 1.0% and 0.2%, respectively.

EQH Uncommitted Facility

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from maturitiesIn addition to the EQH Facility, AB entered into a $300 million uncommitted, unsecured senior credit facility (the “EQH Uncommitted Facility”) with EQH. The EQH Uncommitted Facility matures on September 1, 2024 and sales of invested assetsis available for AB’s general business purposes. Borrowings under the EQH Uncommitted Facility bear generally interest at a rate per annum based on prevailing overnight commercial paper rates. The EQH Uncommitted Facility contains affirmative, negative and investment income, net of amounts reinvested. The primary liquidity risks with respectfinancial covenants, which are substantially similar to these cash flows are the risk of default by debtors or bond insurers, our counterparties’ willingness to extend repurchase agreements, commitments to invest and market volatility. We closely manage these risks through our asset/liability management process and regular monitoring of our liquidity position. Our primary sources and uses of liquidity and capital are summarized below.
 Three Months Ended March 31,
 2018 2017
 (in millions)
Cash and Cash Equivalents, beginning of period$4,814
 $5,654
Net cash provided by (used in) operating activities(264) 72
Net cash provided by (used in) investing activities459
 (2,899)
Net cash provided by financing activities1,074
 2,630
Effect of exchange rates8
 8
Cash and Cash Equivalents, end of period$6,091
 $5,465
First Quarter 2018 Compared to First Quarter 2017
Cash and cash equivalents of $6.1 billion at March 31, 2018 increased $0.6 billion from $5.5 billion at March 31, 2017.
Net cash used in operating activities was $264 millionthose in the first quarterEQH Facility.
As of 2018, $336 million more usage thanSeptember 30, 2022 and December 31, 2021, AB had no outstanding balance on the $72 million net cash provided by operating activities inEQH Uncommitted Facility and has not drawn upon the first quarter of 2017. Cash flows from operating activities include such sources as premiums, investment management and advisory fees and investment income offset by such uses as life insurance benefit payments, policyholder dividends, compensation payments, other cash expenditures and tax payments.facility since its inception.
Net cash provided by investing activities was $459 million in the first quarter of 2018; $3.4 billion higher than the $2.9 billion net cash used in investing activities in the first quarter of 2017. The increase was primarily related to $1.8 billion higher net sale of investments and $1.3 billion higher cash inflows from cash settlement related to derivatives as compared to the first quarter of 2017.
Cash flows provided by financing activities were $1.1 billion in the first quarter of 2018; $1.5 billion lower than the $2.6 billion net cash provided by financing activities in the first quarter of 2017. The decrease was primarily driven by $588 million lower net deposits to policyholders’ account balances, $470 million higher cash outflows of net repayment of loans from affiliates and $1.2 billion lower cash inflows from changes in collateral, which was largely offset by $459 million increase of repurchase agreement and commercial paper.
Statutory Capital of Our Insurance Subsidiaries
Our capital management framework for our insurance subsidiaries is primarily based on statutory RBC standards and the CTE asset standard for our variable annuity business.
RBC requirements are used as minimum capital requirements by the NAIC and the state insurance departments to evaluate the capital condition of regulated insurance companies. RBC is based on a formula calculated by applying factors to various asset, premium, claim, expense and statutory reserve items. The formula takes into account the risk characteristics of the insurer, including asset risk, insurance risk, interest rate risk, market risk and business risk and is calculated on a quarterly basis and made public on an annual basis. The formula is used as an early warning regulatory tool to identify possible inadequately capitalized insurers for purposes of initiating regulatory action, and not as a means to rank insurers generally. These rules apply to our insurance company subsidiaries and not to Holdings. State insurance laws provide insurance regulators the authority to require various actions by, or take various actions against, insurers whose total adjusted capital does not meet or exceed certain RBC


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levels. At the date of the most recent annual statutory financial statements filed with insurance regulators, the total adjusted capital of each of these insurance company subsidiaries subject to these requirements was in excess of each of those RBC levels.
CTE is a statistical measure
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Table of tail risk which quantifies the total asset requirement to sustain a loss if an event outside a given probability level has occurred. In the case of our analysis of variable annuity guarantees, CTE98 denotes the financial resources a company would need to cover the averageContents
See 13 of the worst 2% of scenarios.Notes to the Consolidated Financial Statements for additional information relating to Prescribed and Permitted Statutory Accounting practices and its impact on our statutory surplus.
We target an asset level for all variable annuity products at or above a CTE98 level under most economic scenarios. For our non-variable annuity insurance liabilities, we target to maintain an RBC ratio of 350%-400%.
Captive Reinsurance CompaniesCompany
We use a captive reinsurance companiescompany to more effectively manage our reserves and capital on an economic basis and to enable the aggregation and transfer of risks. Our captive reinsurance companies assumecompany assumes business from affiliates only and areis closed to new business. All of ourOur captive reinsurance companies are wholly owned subsidiaries and arecompany is a wholly-owned subsidiary located in the United States. In addition to state insurance regulation, our captives arecaptive is subject to internal policies governing theirits activities. We continue to analyze the use of our existing captive reinsurance structures,structure, as well as additional third-party reinsurance arrangements. On April 12, 2018, we effected an unwind of certain of our existing captive reinsurance structures as described below.
Unwind of Reinsurance of GMxB Business with a Captive Reinsurer
On April 12, 2018, we effected an unwind of our existing captive reinsurance structure between AXA Equitable Life and a captive reinsurer, AXA RE Arizona, an indirectly wholly owned subsidiary of Holdings. AXA Equitable Life ceded to AXA RE Arizona a 100% quota share of all liabilities for variable annuities with GMxB riders issued on or after January 1, 2006 and in-force on September 30, 2008 (the “GMxB Business”) and a 100% quota share of all liabilities for variable annuities with GMIB riders issued on or after May 1, 1999 through August 31, 2005 in excess of the liability assumed by two unaffiliated reinsurers, which are subject to certain maximum amounts or limitations on aggregate claims. AXA RE Arizona also reinsures a 90% quota share of level premium term insurance issued by AXA Equitable Life on or after March 1, 2003 through December 31, 2008 and lapse protection riders under certain series of universal life insurance policies issued by AXA Equitable Life on or after June 1, 2003 through June 30, 2007.Borrowings
In connection with the GMxB Unwind, all of the business previously reinsured to AXA RE Arizona, with the exception of the GMxB Business, was novated on April 12, 2018 to EQ AZ Life Re, a newly formed captive insurance company organized under the laws of Arizona, an indirectly and wholly owned by Holdings. Following the novation of business to EQ AZ Life Re, AXA RE Arizona, holding only the GMxB Business, was merged with and into AXA Equitable Life. As a result of the merger, the reinsurance by AXA RE Arizona of the GMxB Business will no longer be in place. Following AXA RE Arizona’s merger with and into AXA Equitable Life, the GMxB Business is not subject to any new internal or third-party reinsurance arrangements, though in the future AXA Equitable Life may reinsure the GMxB Business with third parties.
Description of Certain Indebtedness
Historically, our insurance companies have relied on AXA for most of our financing, either through internal loans or guarantees. In connection with the IPO, we have put in place a stand-alone financing strategy at Holdings targeting an overall indebtedness level in line with our U.S. public company peers. AB historically has been self-reliant for its financing, and we expect AB will remain so in its financing activities going forward. As of March 31, 2018, our total short-term and long-term external debt on a consolidated basis was $2.4 billion.


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The following table sets forth our total consolidated borrowings as of the dates indicated. Our financial strategy going forward will remain subject to market conditions and other factors. For example, we may from time to time enter into additional bank or other financing arrangements, including public or private debt, structured facilities and contingent capital arrangements, under which we could incur additional indebtedness.
The following table sets forth the Company’s total consolidated borrowings. Short-term and long-term debt consists of the following:
 March 31, 2018 December 31, 2017
 Holdings and AXA Financial 
AXA
Equitable
Life(1)
 AB Consolidated Holdings and AXA Financial 
AXA
Equitable
Life
 AB Consolidated
 (in millions)
Short-term and long-term debt            
Commercial paper$1,534
 $—
 $490
 $2,024
 $1,290
 $—
 $491
 $1,781
AB Revolver—
 —
 —
 —
 —
 —
 75
 75
Long-term debt349
 —
 —
 349
 349
 203
 —
 552
Total short-term and long-term debt1,883
 —
 490
 2,373
 1,639
 203
 566
 2,408
Loans from affiliates            
Loans from affiliates2,530
 —
 —
 2,530
 3,622
 —
 —
 3,622
Total borrowings$4,413
 $—
 $490
 $4,903
 $5,261
 $203
 $566
 $6,030
September 30,December 31,
20222021
(in millions)
Short-term debt:
CLO Warehousing Debt$248 $92 
Senior Notes (3.9%, due 2023)519 519 
Total short-term debt767 611 
Long-term debt:
Senior Notes (5.0%, due 2048)1,480 1,481 
Senior Notes (4.35%, due 2028)1,491 1,490 
Senior Debentures, (7.0%, due 2028)350 349 
Total long-term debt3,321 3,320 
Total short-term and long-term debt$4,088 $3,931 
(1)In March 2018, AXA Equitable Life sold its interest in two real estate joint ventures to AXA France for a total purchase price of approximately $143 million, which resulted in the elimination of the $203 million long-term debt shown in this column on Holdings’ consolidated balance sheet for the first quarter of 2018.
In February 2018, we entered into
Notes and Debentures
The Senior Notes and Senior Debentures contain customary affirmative and negative covenants, including a $3.9 billion two-year senior unsecured delayed draw term loan agreement, a $500 million three-year senior unsecured delayed draw term loan agreementlimitation on certain liens and a $2.5 billion five-year senior unsecured revolving credit facility (collectively, the “Credit Facilities”), which may provide significant support to our liquidity position when alternative sources of credit are limited. The Credit Facilities contain certain administrative, reporting, legal and financial covenants, including requirements to maintain a specified minimum consolidated net worth and to maintain a ratio of indebtedness to total capitalization not in excess of a specified percentage, and limitationslimit on the dollar amountCompany’s ability to consolidate, merge or sell or otherwise dispose of indebtedness thatall or substantially all of its assets. The Senior Notes and Senior Debentures also include customary events of default (with customary grace periods, as applicable), including provisions under which, upon the occurrence of an event of default, all outstanding Senior Notes and Senior Debentures may be incurred by our subsidiaries and the dollar amountaccelerated. As of secured indebtedness that may be incurred bySeptember 30, 2022, the Company which could restrict our operations and use of funds. Borrowings under the term loan agreements may be made only prior to this offering. In April 2018, we terminated the two-year term loan agreement, and,is in May 2018, we borrowed $300 million under the three-year term loan agreement. In addition to the Credit Facilities, we entered into letter of credit facilities with an aggregate principal amount of approximately $1.9 billion, primarily to be used to support our life insurance business reinsured to EQ AZ Life Re following the GMxB Unwind. In April 2018, we also issued $3.8 billion in aggregate principal amount of notes (consisting of $800 million aggregate principal amount of 3.900% Senior Notes due 2023, $1.5 billion aggregate principal amount of 4.350% Senior Notes due 2028 and $1.5 billion aggregate principal amount of 5.000% Senior Notes due 2048) to third party investors.
The right to borrow funds under the Credit Facilities is subject to the fulfillment of certain conditions, including compliance with all covenants, and the ability to borrow thereunder is also subject to the continued ability of the lenders that are or will be parties to the Credit Facilities to provide funds. For additional information regarding the covenants in our Credit Facilities and the conditions to borrowing thereunder, see “Risk Factors” in the Prospectus.debt covenants.
Ratings
Financial strength ratings (which are sometimes referred to as “claims-paying” ratings) and credit ratings are important factors affecting public confidence in an insurer and its competitive position in marketing products. Our credit ratings are also important for our ability to raise capital through the issuance of debt and for the cost of such financing.


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A downgrade of our debt ratings could affect our ability to raise additional debt with terms and conditions similar to our current debt, and accordingly, likely increase our cost of capital. In addition, a downgrade of these ratings could make it more difficult to raise capital to refinance any maturing debt obligations, to support business growth at our insurance subsidiaries and to maintain or improve the current financial strength ratings of our principal insurance subsidiaries. Upon announcement of AXA’s plan to pursue the IPO and the filing of the initial Form S-1 on November 13, 2017, AXA Equitable Life’s and AXA Financial’s ratings were downgraded by AM Best, S&P and Moody’s. The downgrades reflected the removal of the uplift associated with assumed financial support from AXA.
Financial strength ratings represent the opinions of rating agencies regarding the financial ability of an insurance company to meet its obligations under an insurance policy. Credit ratings represent the opinions of rating agencies regarding an entity’s ability to repay its indebtedness. The following table summarizes the ratings for Holdings and certain of its subsidiaries. AM Best, S&P and Moody’s have a stable outlook.
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AM BestS&PMoody’s
Last review date3/7/2018Jan '223/6/2018Jun '224/11/2018Jul '22
Financial Strength Ratings:
AXA Equitable Financial Life Insurance CompanyAA+A2A1
MLOAEquitable Financial Life Insurance Company of AmericaAA+A2A1
Credit Ratings:
Credit Ratings:Equitable Holdings, Inc.BBB+Baa1
HoldingsLast review date—BBB+Sep '22Baa2Jul '22
AXA FinancialAllianceBernstein L.P.bbb+BBB+ABaa2
Last Review Date12/29/20175/17/2017
AB—AA2



SUPPLEMENTARY INFORMATION
We are involved in a number of ventures and transactions with AXA and certain of its affiliates. See Note 12 of the Notes to Consolidated Financial Statements included herein.
Contractual ObligationsMaterial Cash Requirement
Our consolidated contractual agreementsmaterial cash requirements include policyholder obligations, long-term debt, commercial paper, loans from affiliates, employee benefits, operating leases and various funding commitments. See “Supplementary Information – Contractual Obligations”“Material Cash Requirement” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the ProspectusAnnual Report on Form 10-K for the year ended December 31, 2021 for additional information.
Off-Balance Sheet Arrangements
At March 31, 2018, the Company was not a party to any off-balance sheet transactions other than those guarantees and commitments described in Note 14 of the Notes to Consolidated Financial Statements included herein.


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Summary of Critical Accounting PoliciesEstimates
The preparation of financial statements in conformity with U.S. GAAP requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in our consolidated financial statements included elsewhere herein. For a discussion of our significant accounting policies, see Note 2 of Notes to Consolidated Financial Statements.the Company’s consolidated financial statements included in our 2021 Form 10-K. The most critical estimates include those used in determining:
•liabilities for future policy benefits;
•accounting for reinsurance;
•capitalization and amortization of DAC;
•estimated fair values of investments in the absence of quoted market values and investment impairments;
•estimated fair values of freestanding derivatives and the recognition and estimated fair value of embedded derivatives requiring bifurcation;
•goodwill and related impairment;
•measurement of income taxes and the valuation of deferred tax assets; and
•liabilities for litigation and regulatory matters.
In applying our accounting policies, we make subjective and complex judgments that frequently require estimates about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries while others are specific to our business and operations. Actual results could differ from these estimates.
As previously reported, we identified two material weaknesses in the design and operation of our internal control over financial reporting. Our management has concluded that we do not (1) maintain effective controls to timely validate that actuarial models are properly configured to capture all relevant product features and to provide reasonable assurance, timely reviews of assumptions and data have occurred; and (2) maintain sufficient experienced personnel to prepare the Company’s consolidated financial statements and to verify that consolidating and adjusting journal entries were completely and accurately recorded to the appropriate accounts or segments. We are currently in the process of remediating these material weaknesses by taking steps to (i) validate all existing actuarial models and valuation systems as well as to improve controls and processes around our assumption and data process and (ii) strengthen the control function related to the financial closing process. Although we plan to complete these remediation processes as quickly as possible, we cannot at this time estimate when the remediations will be completed.
A discussion of each of the critical accounting estimates may be found in the Prospectus in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Estimates — Application of Critical Accounting Estimates.”

Item 3.      Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to the quantitative and qualitative disclosures about market risk described in the ProspectusAnnual Report on Form 10-K for the year ended December 31, 2021 in “Quantitative"Quantitative and Qualitative Disclosures About Market Risk”Risk".

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Item 4.     Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The management of the Company,Management, with the participation of the Company’s Chief Executive Officer (CEO) and Chief Financial Officer, (CFO), has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures, (asas defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of March 31, 2018. This evaluation is performed to determine if our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Securities and Exchange Act of 1934, as amended, is accumulated and communicated to management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms.
As previously reported, the Company identified two material weaknesses in the design and operation of the Company’s internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting,Exchange Act. Based on such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. The Company’s management, includingevaluation, the Company’s CEOChief Executive Officer and CFO,Chief Financial Officer have concluded that, we do not (i) maintain effective controls to timely validate actuarial models are properly configured to capture all relevant product features and to provide reasonable assurance timely reviewsas of assumptions and data have occurred, and, as a result, errors were identified in future policyholders’ benefits and deferred policy acquisition costs balances; and (ii) maintain sufficient experienced personnel to prepare the Company’s consolidated financial statements and to verify consolidating and adjusting journal entries were completely and accurately recorded to the appropriate accounts or segments and, as a result, errors were identified in the consolidated financial statements, including in the presentation and disclosure between the operating and financing sections of the statements of cash flows. These material weaknesses resulted in misstatements in the Company’s previously issued annual and interim financial statements and resulted in (i) the restatement of the annual financial statements for the year ended December 31, 2016, the restatements of the interim financial statements for the nine months ended September 30, 2017 and for the six months ended June 30, 2017, the revision of the annual financial statements for the year ended December 31, 2015 and the revision of the interim financial statements for the nine months ended September 30, 2016 and for the six months ended June 30, 2016, in each case that were reported in the preliminary prospectus included in the first amendment of our Form S-1 registration statement filed on February 14, 2018 and (ii) the restatement of the interim financial statements for the six months ended June 30, 2017 and the revision of the annual financial statements for the years ended December 31, 2016, 2015 and 2014 and the interim financial statements for the six months ended June 30, 2016, in each case that were reported in the preliminary prospectus included in our initial Form S-1 registration statement filed on November 13, 2017. Until remedied, these material weaknesses could result in a misstatement of the Company’s consolidated financial statements or disclosures that would result in a material misstatement to the Company’s annual or interim financial statements that would not be prevented or detected.
Due to these material weaknesses, the Company’s management, including the Company’s CEO and CFO, concluded that2022, the Company’s disclosure controls and procedures were not effective as of March 31, 2018.effective.
Since identifyingDuring the material weakness related tofirst quarter 2022, we implemented a new accounting and financial reporting system, including the general ledger. We have modified our actuarial models, we have been, and are currently in the process of, remediating by taking steps to validate all existing actuarial models and valuation systemscontrols infrastructure, as well as added other processes and internal controls, to improve controls and processes aroundadapt to our assumption and data process. These steps include verifying inputs and unique algorithms, ensuring alignment with documented accounting standards and verifying assumptions usednew general ledger. There are no other changes in our models are consistent with documented assumptions and data is reliable. The remediation efforts are being performed by our internal model risk team (which is separate from our modeling and valuation teams), as supported by third party firms. We will continue to enhance controls to ensure our models, including assumptions and data, are revalidated on a fixed calendar schedule and that new model changes and product features are tested through our internal model risk team prior to adoption within our models and systems. Although we plan to complete this remediation process as quickly as possible, we cannot at this time estimate when the remediation will be completed.


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Since identifying the material weakness related to our journal entry process, we have been, and are currently in the process of, remediating by taking steps to strengthen the control function related to our financial closing process. These steps include recruiting additional personnel, retaining external expert resources, further automating entries where possible, enhancing the design of certain management review controls and providing training regarding internal control processes. We will continue to enhance controls to ensure the financial closing process is effectively implemented. Although we plan to complete this remediation process as quickly as possible, we cannot at this time estimate when the remediation will be completed.
Changes in Internal Control Over Financial reporting
As described above, the Company has designed and implemented additional controls in connection with its remediation plan. Other than these additional controls, there were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(e)13a-15(f) and Rule 15d-15(f) under the Securities Exchange Act of 1934 forAct) that occurred during the quarternine months ended March 31, 2018September 30, 2022, that hashave materially affected, or isare reasonably likely to materially affect, the Company’sour internal control over financial reporting.




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PART IIII. OTHER INFORMATION
Item 1.     Legal Proceedings
SeeFor information regarding certain legal proceedings pending against us, see Note 1412 of the Notes to these Consolidated Financial Statements contained herein. Except as disclosed(unaudited) in Note 14 of Notes to Consolidated Financial Statements, there have been no new material legal proceedingsthis Form 10-Q. Also see “Risk Factors—Legal and no new material developmentsRegulatory Risks—Legal and regulatory actions” included in legal proceedings previously reported inour Annual Report on Form 10-K for the Prospectus.year ended December 31, 2021.
Item 1A. Risk Factors
You should carefully consider the risks described in the “Risk Factors” section included in our Annual Report on Form 10-K for the Prospectus. These risks could materially affect our business, consolidated results of operations or financial condition. These risks are not exclusive, and additional risksyear ended December 31, 2021. Risks to which we are subject also include, but are not limited to, the factors mentioned under “Forward-Looking Statements”“Note Regarding Forward-Looking Statements and Information” above and the risks of our businesses described elsewhere in this Quarterly Report on Form 10-Q.

Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds
NONE.The following table provides information about purchases by Holdings during the three months ended September 30, 2022, of its common stock:
PeriodTotal Number of Shares PurchasedAverage Price Paid per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsApproximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
7/1/22 through 7/31/221,167,227 $25.70 1,167,227 $674,529,426 
8/1/22 through 8/31/221,943,449 $30.60 1,943,449 $615,054,615 
9/1/22 through 9/30/223,869,178 $28.60 3,869,178 $577,554,615 
Total6,979,854 $28.67 6,979,854 $577,554,615 

See Note 10 to the Notes to Consolidated Financial Statements for ASR transaction detail during the three months ended September 30, 2022.
Item 3.     Defaults Upon Senior Securities
NONE.None.
Item 4.     Mine Safety Disclosures
NONE.Not applicable.
Item 5.      Other Information
Iran Threat Reduction and Syria Human Rights Act
Holdings and its subsidiaries had no transactions or activities requiring disclosure under the Iran Threat Reduction and Syria Human Rights Act (“Iran Act”), nor were we involved in the AXA Group matters described immediately below.
The non-U.S. based subsidiaries of AXA operate in compliance with applicable laws and regulations of the various jurisdictions in which they operate, including applicable international (United Nations and European Union) laws and regulations. While AXA Group companies based and operating outside the United States generally are not subject to U.S. law, as an international group, AXA has in place policies and standards (including the AXA Group International Sanctions Policy) that apply to all AXA Group companies worldwide and often impose requirements that go well beyond local law.
AXA has informed us that AXA Konzern AG, an AXA insurance subsidiary organized under the laws of Germany, provides car, accident and health insurance to diplomats based at the Iranian Embassy in Berlin, Germany. The total annual premium of these policies is approximately $139,700 before tax and the annual net profit arising from these policies, which is difficult to calculate with precision, is estimated to be $26,000. These policies were underwritten by a broker who specializes in providing insurance coverage for diplomats.
In addition, AXA has informed us that AXA Insurance Ireland, an AXA insurance subsidiary, provides statutorily required car insurance under four separate policies to the Iranian Embassy in Dublin, Ireland. AXA has informed us that compliance with the Declined Cases Agreement of the Irish Government prohibits the cancellation of these policies unless another insurer is

None.

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willing to assume the coverage. The total annual premium for these policies is approximately $6,268 and the annual net profit arising from these policies, which is difficult to calculate with precision, is estimated to be $764.
Also, AXA has informed us that AXA Sigorta, a subsidiary of AXA organized under the laws of Turkey, provides car insurance coverage for vehicle pools of the Iranian General Consulate and the Iranian Embassy in Istanbul, Turkey. Motor liability insurance coverage is mandatory in Turkey and cannot be canceled unilaterally. The total annual premium in respect of these policies is approximately $3,150 and the annual net profit, which is difficult to calculate with precision, is estimated to be $473.
Additionally, AXA has informed us that AXA Winterthur, an AXA insurance subsidiary organized under the laws of Switzerland, provides Naftiran Intertrade, a wholly-owned subsidiary of the Iranian state-owned National Iranian Oil Company, with life, disability and accident coverage for its employees. The provision of these forms of coverage is mandatory for employees in Switzerland. The total annual premium of these policies is approximately $373,668 and the annual net profit arising from these policies, which is difficult to calculate with precision, is estimated to be $56,000.
Lastly, AXA has informed us that AXA Egypt, an AXA insurance subsidiary organized under the laws of Egypt, provides the Iranian state-owned Iran Development Bank two life insurance contracts, covering individuals who have loans with the bank. The total annual premium of these policies is approximately $34,446 and annual net profit arising from these policies, which is difficult to calculate with precision, is estimated to be $3,500.
The aggregate annual premium for the above-referenced insurance policies is approximately $557,232, representing approximately 0.0006% of AXA’s 2017 consolidated revenues, which exceed $100 billion. The related net profit, which is difficult to calculate with precision, is estimated to be $86,737, representing approximately 0.001% of AXA’s 2017 aggregate net profit.


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Item 6.     Exhibits
NumberDescription and Method of Filing
3.1#10.1
Amended and Restated Certificate of Incorporation of AXA Equitable Holdings, Inc.
3.2#
#
Amended and Restated By-Laws of AXA Equitable Holdings, Inc.
4.1
Form of Common Stock Certificate of AXA Equitable Holdings, Inc. (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-1 of AXA Equitable Holdings, Inc., Registration No. 333-221521 (the “Form S-1”)).
4.2
Indenture, dated as of April 20, 2018, among AXA Equitable Holdings, Inc., as issuer, Wilmington Saving Fund Society, FSB, as trustee, and Citibank, N.A., as security registrar and paying agent (incorporated by reference to Exhibit 4.4 to the Form S-1).
4.3
First Supplemental Indenture, dated as of April 20, 2018, among AXA Equitable Holdings, Inc., as issuer, Wilmington Saving Fund Society, FSB, as trustee, and Citibank, N.A., as security registrar and paying agent (incorporated by reference to Exhibit 4.5 to the Form S-1).
4.4
Second Supplemental Indenture, dated as of April 20, 2018, among AXA Equitable Holdings, Inc., as issuer, Wilmington Saving Fund Society, FSB, as trustee, and Citibank, N.A., as security registrar and paying agent (incorporated by reference to Exhibit 4.6 to the Form S-1).
4.5
Third Supplemental Indenture, dated as of April 20, 2018, among AXA Equitable Holdings, Inc., as issuer, Wilmington Saving Fund Society, FSB, as trustee, and Citibank, N.A., as security registrar and paying agent (incorporated by reference to Exhibit 4.7 to the Form S-1).
10.1#
ShareholderMaster Transaction Agreement, dated as of May 4, 2018, between AXA S.A.August 16, 2022 among Equitable Financial Life Insurance Company and AXA Equitable Holdings, Inc.
First Allmerica Financial Life Insurance Company (redacted)
10.2#10.2
Registration Rights#
Coinsurance and Modified Coinsurance Agreement, dated as of May 4, 2018,October 3, 2023, between AXA S.A.Equitable Financial Life Insurance Company and AXA Equitable Holdings, Inc.
10.3
Tax Sharing Agreement, dated March 28, 2018, among AXA S.A., AXA Investment Managers S.A. and AXA Equitable Holdings, Inc. (incorporated by reference to Exhibit 10.3 to the Form S-1).
10.4#
Transitional Services Agreement, dated as of May 4, 2018, between AXA S.A. and AXA Equitable Holdings, Inc.
10.5#
Trademark License Agreement, dated as of May 4, 2018, among AXA S.A., AXA Equitable Holdings, Inc. and AXAFirst Allmerica Financial Inc.
10.6†#
Director Indemnification Agreement between AXA Equitable Holdings, Inc. and each of its directors.
10.7
Revolving Credit Agreement, dated as of February 16, 2018, by and among AXA Equitable Holdings, Inc., the Subsidiary Account Parties (as defined therein) party thereto, the banks party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent, is incorporated by reference to Exhibit 10.22 to the Form S-1 (incorporated by reference to Exhibit 10.22 to the Form S-1).
10.8
Term Loan Agreement, dated as of February 16, 2018, by and among AXA Equitable Holdings, Inc., the banks party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.23 to the Form S-1).
10.9
Term Loan Agreement, dated as of February 16, 2018, by and among AXA Equitable Holdings, Inc., the banks party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.24 to the Form S-1).
10.10
Reimbursement Agreement, dated as of February 16, 2018, by and among AXA Equitable Holdings, Inc. the Subsidiary Account Parties (as defined therein) party thereto and Natixis, New York Branch (incorporated by reference to Exhibit 10.25 to the Form S-1).
10.11
Reimbursement Agreement, dated as of February 16, 2018, by and among AXA Equitable Holdings, Inc. the Subsidiary Account Parties (as defined therein) party thereto and HSBC Bank USA, National Association (incorporated by reference to Exhibit 10.26 to the Form S-1).
10.12
Reimbursement Agreement, dated as of February 16, 2018, by and among AXA Equitable Holdings, Inc. the Subsidiary Account Parties (as defined therein) party thereto and Citibank Europe PLC (incorporated by reference to Exhibit 10.27 to the Form S-1).
10.13
Reimbursement Agreement, dated as of February 16, 2018, by and among AXA Equitable Holdings, Inc. the Subsidiary Account Parties (as defined therein) party thereto and Credit Agricole Corporate and Investment Bank (incorporated by reference to Exhibit 10.28 to the Form S-1).


137

Life Insurance Company (redacted)
NumberDescription and Method of Filing
10.1431.1
Reimbursement Agreement, dated as of February 16, 2018, by and among AXA Equitable Holdings, Inc. the Subsidiary Account Parties (as defined therein) party thereto and Barclays Bank PLC (incorporated by reference to Exhibit 10.29 to the Form S-1).
10.15
#
Reimbursement Agreement, dated as of February 16, 2018, by and among AXA Equitable Holdings, Inc. the Subsidiary Account Parties (as defined therein) party thereto and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.30 to the Form S-1).
10.16
Reimbursement Agreement, dated as of February 16, 2018, by and among AXA Equitable Holdings, Inc. the Subsidiary Account Parties (as defined therein) party thereto and Landesbank Hessen-Thüringen Girozentrale, acting through its New York Branch (incorporated by reference to Exhibit 10.31 to the Form S-1).
10.17
Reimbursement Agreement, dated as of February 16, 2018, by and among AXA Equitable Holdings, Inc. the Subsidiary Account Parties (as defined therein) party thereto and Commerzbank AG, New York Branch (incorporated by reference to Exhibit 10.32 to the Form S-1).
10.18
Waiver Letter Agreements with the lenders party to each of the agreements in Exhibits 10.22 to 10.32 to the Form S-1 (incorporated by reference to Exhibit 10.33 to the Form S-1).
10.19†
AXA Equitable Holdings, Inc. Short-Term Incentive Compensation Plan (incorporated by reference to Exhibit 10.56 to the Form S-1).
10.20†
AXA Equitable Holdings, Inc. 2018 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.57 to the Form S-1).
10.21†#
Form of Transaction Incentive Award Agreement under the 2018 Omnibus Incentive Plan.
10.22†#
Form of Restricted Stock Unit Award Agreement under the 2018 Omnibus Incentive Plan.
10.23†#
Form of Performance Share Award Agreement under the 2018 Omnibus Incentive Plan.
10.24†#
Form of Stock Option Award Agreement under the 2018 Omnibus Incentive Plan.
10.25†#
AXA Equitable Supplemental Severance Plan for Executives.
31.1#
Certification of the Registrant’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2#
#
Certification of the Registrant’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1#
#
Certification of the Registrant’s Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2#
#
Certification of the Registrant’s Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
104Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibits 101).

______________

#    Filed herewith.
† Identifies each management contract or compensatory plan or arrangement.

GLOSSARY
Selected Financial Terms
Account Value (“AV”)Generally equals the aggregate policy account value of our retirement and protection products. General Account AV refers to account balances in investment options that are backed by the General Account while Separate Accounts AV refers to Separate Accounts investment assets.
Alternative investmentsInvestments in real estate and real estate joint ventures and other limited partnerships.
Assets under administration (“AUA”)Includes non-insurance client assets that are invested in our savings and investment products or serviced by our Equitable Advisors platform. We provide administrative services for these assets and generally record the revenues received as distribution fees.
Assets under management (“AUM”)Investment assets that are managed by one of our subsidiaries and includes: (i) assets managed by AB, (ii) the assets in our GAIA portfolio and (iii) the Separate Account assets of our retirement and protection businesses. Total AUM reflects exclusions between segments to avoid double counting.
Combined RBC RatioCalculated as the overall aggregate RBC ratio for the Company’s insurance subsidiaries including capital held for its life insurance and variable annuity liabilities and non-variable annuity insurance liabilities.
Conditional tail expectation (“CTE”)
Calculated as the average amount of total assets required to satisfy obligations over the life of the contract or policy in the worst x% of scenarios. Represented as CTE (100 less x). Example: CTE95 represents the worst five percent of scenarios.
Deferred policy acquisition cost (“DAC”)Represents the incremental costs related directly to the successful acquisition of new and certain renewal insurance policies and annuity contracts and which have been deferred on the balance sheet as an asset.

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Deferred sales inducements (“DSI”)Represent amounts that are credited to a policyholder’s account balance that are higher than the expected crediting rates on similar contracts without such an inducement and that are an incentive to purchase a contract and also meet the accounting criteria to be deferred as an asset that is amortized over the life of the contract.
Dividends Received Deduction (“DRD”)A tax deduction under U.S. federal income tax law received by a corporation on the dividends it receives from other corporations in which it has an ownership stake.
Fee-type revenueRevenue from fees and related items, including policy charges and fee income, premiums, investment management and service fees, and other income.
Gross PremiumsFYP and Renewal premium and deposits
Invested assetsIncludes fixed maturity securities, equity securities, mortgage loans, policy loans, alternative investments and short-term investments.
Protection Solutions ReservesEquals the aggregate value of Policyholders’ account balances and Future policy benefits for policies in our Protection Solutions segment.
ReinsuranceInsurance policies purchased by insurers to limit the total loss they would experience from an insurance claim.
Renewal premium and depositsPremiums and deposits after the first twelve months of the policy or contract.
Risk-based capital (“RBC”)Rules to determine insurance company statutory capital requirements. It is based on rules published by the National Association of Insurance Commissioners (“NAIC”).
Total adjusted capital (“TAC”)Primarily consists of capital and surplus, and the asset valuation reserve.
Product Terms
401(k)A tax-deferred retirement savings plan sponsored by an employer. 401(k) refers to the section of the Internal Revenue Code of 1986, as amended (the “Code”) pursuant to which these plans are established.
403(b)A tax-deferred retirement savings plan available to certain employees of public schools and certain tax-exempt organizations. 403(b) refers to the section of the Code pursuant to which these plans are established.
AffluentRefers to individuals with $250,000 to $999,999 of investable assets.
AnnuitantThe person who receives annuity payments or the person whose life expectancy determines the amount of variable annuity payments upon annuitization of an annuity to be paid for life.
AnnuitizationThe process of converting an annuity investment into a series of periodic income payments, generally for life.
Benefit baseA notional amount (not actual cash value) used to calculate the owner’s guaranteed benefits within an annuity contract. The death benefit and living benefit within the same contract may not have the same benefit base.
Cash surrender valueThe amount an insurance company pays (minus any surrender charge) to the policyholder when the contract or policy is voluntarily terminated prematurely.
Dollar-for-dollar withdrawalA method of calculating the reduction of a variable annuity benefit base after a withdrawal in which the benefit is reduced by one dollar for every dollar withdrawn.
Future policy benefitsFuture policy benefits for the annuities business are comprised mainly of liabilities for life-contingent income annuities, and liabilities for the variable annuity guaranteed minimum benefits accounted for as insurance.

Future policy benefits for the life business are comprised mainly of liabilities for traditional life and certain liabilities for universal and variable life insurance contracts (other than the Policyholders’ account balance).
General Account Investment PortfolioThe invested assets held in the General Account.
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General AccountThe assets held in the general accounts of our insurance companies as well as assets held in our separate accounts on which we bear the investment risk.
GMxBA general reference to all forms of variable annuity guaranteed benefits, including guaranteed minimum living benefits, or GMLBs (such as GMIBs, GMWBs and GMABs), and guaranteed minimum death benefits, or GMDBs (inclusive of return of premium death benefit guarantees).
Guaranteed income benefit (“GIB”)An optional benefit which provides the policyholder with a guaranteed lifetime annuity based on predetermined annuity purchase rates applied to a GIB benefit base, with annuitization automatically triggered if and when the contract AV falls to zero.
Guaranteed minimum accumulation benefits (“GMAB”)An optional benefit (available for an additional cost) which entitles an annuitant to a minimum payment, typically in lump-sum, after a set period of time, typically referred to as the accumulation period. The minimum payment is based on the benefit base, which could be greater than the underlying AV.
Guaranteed minimum death
benefits (“GMDB”)		An optional benefit (available for an additional cost) that guarantees an annuitant’s beneficiaries are entitled to a minimum payment based on the benefit base, which could be greater than the underlying AV, upon the death of the annuitant.
Guaranteed minimum income benefits (“GMIB”)An optional benefit (available for an additional cost) where an annuitant is entitled to annuitize the policy and receive a minimum payment stream based on the benefit base, which could be greater than the underlying AV.
Guaranteed minimum living
benefits (“GMLB”)		A reference to all forms of guaranteed minimum living benefits, including GMIBs, GMWBs and GMABs (does not include GMDBs).
Guaranteed minimum withdrawal benefits (“GMWB”)An optional benefit (available for an additional cost) where an annuitant is entitled to withdraw a maximum amount of their benefit base each year, for which cumulative payments to the annuitant could be greater than the underlying AV.
Guaranteed Universal Life (“GUL”)A universal life insurance offering with a lifetime no lapse guarantee rider, otherwise known as a guaranteed UL policy. With a GUL policy, the premiums are guaranteed to last the life of the policy.
Guaranteed withdrawal benefit for life (“GWBL”)An optional benefit (available for an additional cost) where an annuitant is entitled to withdraw a maximum amount of their benefit base each year, for the duration of the policyholder’s life, regardless of account performance.
High net worthRefers to individuals with $1,000,000 or more of investable assets.
Indexed Universal Life (“IUL”)A permanent life insurance offering built on a universal life insurance framework that uses an equity-linked approach for generating policy investment returns.
Living benefitsOptional benefits (available at an additional cost) that guarantee that the policyholder will get back at least his original investment when the money is withdrawn.
Mortality and expense risk fee (“M&E fee”)A fee charged by insurance companies to compensate for the risk they take by issuing life insurance and variable annuity contracts.
Net flowsNet change in customer account balances in a period including, but not limited to, gross premiums, surrenders, withdrawals and benefits. It excludes investment performance, interest credited to customer accounts and policy charges.
Policyholder account balances
Annuities. Policyholder account balances are held for fixed deferred annuities, the fixed account portion of variable annuities and non-life contingent income annuities. Interest is credited to the policyholder’s account at interest rates we determine which are influenced by current market rates, subject to specified minimums.
Life Insurance Policies. Policyholder account balances are held for retained asset accounts, universal life policies and the fixed account of universal variable life insurance policies. Interest is credited to the policyholder’s account at interest rates we determine which are influenced by current market rates, subject to specified minimums.
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Return of premium (“ROP”) death benefitThis death benefit pays the greater of the account value at the time of a claim following the owner’s death or the total contributions to the contract (subject to adjustment for withdrawals). The charge for this benefit is usually included in the M&E fee that is deducted daily from the net assets in each variable investment option. We also refer to this death benefit as the Return of Principal death benefit.
RiderAn optional feature or benefit that a policyholder can purchase at an additional cost.
Separate AccountRefers to the separate account investment assets of our insurance subsidiaries excluding the assets held in those separate accounts on which we bear the investment risk.
Surrender chargeA fee paid by a contract owner for the early withdrawal of an amount that exceeds a specific percentage or for cancellation of the contract within a specified amount of time after purchase.
Surrender rateRepresents annualized surrenders and withdrawals as a percentage of average AV.
Universal life (“UL”) productsLife insurance products that provide a death benefit in return for payment of specified annual policy charges that are generally related to specific costs, which may change over time. To the extent that the policyholder chooses to pay more than the charges required in any given year to keep the policy in-force, the excess premium will be placed into the AV of the policy and credited with a stated interest rate on a monthly basis.
Variable annuityA type of annuity that offers guaranteed periodic payments for a defined period of time or for life and gives purchasers the ability to invest in various markets though the underlying investment options, which may result in potentially higher, but variable, returns.
Variable Universal Life (“VUL”)Universal life products where the excess amount paid over policy charges can be directed by the policyholder into a variety of Separate Account investment options. In the Separate Account investment options, the policyholder bears the entire risk and returns of the investment results.
Whole Life (“WL”)A life insurance policy that is guaranteed to remain in-force for the policyholder’s lifetime, provided the required premiums are paid.

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ACRONYMS
•“AB” or “AllianceBernstein” means AB Holding and ABLP
•“AB Holding” means AllianceBernstein Holding L.P., a Delaware limited partnership
•“AB Holding Units” means units representing assignments of beneficial ownership of limited partnership interests in AB Holding
•“AB Units” means units of limited partnership interests in ABLP
•“ABLP” means AllianceBernstein L.P., a Delaware limited partnership and the operating partnership for the AB business
•“AFS” means available-for-sale
•“AOCI” means accumulated other comprehensive income
•“ASC” means Accounting Standards Codification
•“ASR” means accelerated share repurchase
•“ASU” means Accounting Standards Update
•“AUM” means assets under management
•“AUA” means assets under administration
•“AV” means Account Value
•“AXA” means AXA S.A., a société anonyme organized under the laws of France, and formerly our controlling stockholder
•“BPs” means basis points
•“CDS” means credit default swaps
•“CLO” means collateralized loan obligation
•“COI” means cost of insurance
•“COLI” means corporate owned life insurance
•“Company” means Equitable Holdings, Inc. with its consolidated subsidiaries
•“CS Life” means Corporate Solutions Life Reinsurance Company, a Delaware corporation and a wholly-owned direct subsidiary of Holdings
•“CS Life RE” means CS Life RE Company, an Arizona corporation and a wholly-owned indirect subsidiary of Holdings
•“CSA” means credit support annex
•“CTE” means conditional tail expectation
•“DAC” means deferred policy acquisition costs
•“DI” means disability income
•“DOL” means U.S. Department of Labor
•“DSC” means debt service coverage
•“DSI” means deferred sales inducement
•“EAFE” means European, Australasia, and Far East
•“EB” means Employee Benefits
•“EFS” means Equitable Financial Services, LLC, a Delaware corporation and a wholly-owned direct subsidiary of Holdings
•“EPS” means earnings per share
•“EIMG” means Equitable Investment Management Group, LLC, a Delaware limited liability company and a wholly-owned indirect subsidiary of Holdings.
•“EIM” means Equitable Investment Management, LLC, a Delaware limited liability company and wholly-owned indirect subsidiary of Holdings.
•“Equitable Advisors” means Equitable Advisors, LLC, a Delaware limited liability company, our retail broker/dealer for our retirement and protection businesses and a wholly-owned indirect subsidiary of Holdings
•“Equitable America” means Equitable Financial Life Insurance Company of America (f/k/a MONY Life Insurance Company of America), an Arizona corporation and a wholly-owned indirect subsidiary of Holdings
•“Equitable Financial” means Equitable Financial Life Insurance Company, a New York corporation, a life insurance company and a wholly-owned subsidiary of EFS
•“EQ AZ Life Re” means EQ AZ Life Re Company, an Arizona corporation and a wholly-owned indirect subsidiary of Holdings.
•“ERISA” means Employee Retirement Income Security Act of 1974
•“ESG” means environmental, social and governance
•“ETF” means exchange traded funds
•“ETR” means effective tax rate
•“Exchange Act” means Securities Exchange Act of 1934, as amended
•“FABN” means Funding Agreement Backed Notes Program
•“FASB” means Financial Accounting Standards Board
•“FHLB” means Federal Home Loan Bank
•“FYP” means first year premium and deposits
•“General Partner” means AllianceBernstein Corporation, a Delaware corporation and the general partner of AB Holding and ABLP
•“GUL” means guaranteed universal life
•“HFS” means held-for-sale
•“Holdings” means Equitable Holdings, Inc.
•“HTM” means held-to-maturity
•“IPO” means initial public offering
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•“ISDA Master Agreement” means International Swaps and Derivatives Association Master Agreement
•“IUL” means indexed universal life
•“IUS” means Investments Under Surveillance
•“LIBOR” means London Interbank Offered Rate
•“LTV” means loan-to-value
•“MD&A” means Management’s Discussion and Analysis of Financial Condition and Results of Operations
•“MRBs” means market risk benefits
•“MSO” meansMarket Stabilizer Option
•“MTA” means Master Transaction Agreement
•“NAIC” means National Association of Insurance Commissioners
•“NAR” means net amount at risk
•“NAV” means net asset value
•“NLG” means no-lapse guarantee
•“NYDFS” means New York State Department of Financial Services
•“OCI” means other comprehensive income
•“OTC” means over-the-counter
•“PFBL” means profits followed by losses
•“REIT” means real estate investment trusts
•“SCB LLC” means Sanford C. Bernstein & Co., LLC, a registered investment adviser and broker-dealer.
•“SCS” means Structured Capital Strategies
•“SEC” means U.S. Securities and Exchange Commission
•“Series A Preferred Stock” means Holdings’ Series A Fixed Rate Noncumulative Perpetual Preferred Stock
•“Series B Preferred Stock” means Holdings’ Series B Fixed Rate Reset Noncumulative Perpetual Preferred Stock
•“Series C Preferred Stock” means Holdings’ Series C Fixed Rate Reset Noncumulative Perpetual Preferred Stock
•“SIO” means structured investment option
•“SPE” means special purpose entity
•“SVO” means Securities Valuation Office
•“TDRs” means troubled debt restructurings
•“TIPS” means treasury inflation-protected securities
•“U.S. GAAP” means accounting principles generally accepted in the United States of America
•“UL” means universal life
•“ULSG” means universal life products with secondary guarantee
•“USFL” means U.S. Financial Life Insurance Company
•“Venerable” means Venerable Holdings, Inc.
•“VIAC” means Venerable Insurance and Annuity Company
•“VIE” means variable interest entity
•“VISL” means variable interest-sensitive life
•“VOE” means voting interest entity
•“VUL” means variable universal life
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, AXA Equitable Holdings, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: June 19, 2018November 3, 2022AXA Equitable Holdings, Inc.EQUITABLE HOLDINGS, INC.
By:By:/s/ Anders MalmströmRobin M. Raju
Name:Name:Anders MalmströmRobin M. Raju
Title:Title:Senior Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
Date: June 19, 2018November 3, 2022/s/ Andrea NitzanWilliam Eckert
Name:Name:Andrea NitzanWilliam Eckert
Title:Title:Senior Vice President,
Chief Accounting Officer and Controller
(Principal Accounting Officer)




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