← Back to EQH filing summaryOriginal filing text · Part I
Item 2 — Management's Discussion and Analysis
Equitable Holdings, Inc. · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
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The following discussion and analysis of our financial condition and results of operations should be read in its entirety and in conjunction with the consolidated financial statements and related notes 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, 2025, and the subsequent amendment thereto, filed with the SEC (“2025 Form 10-K”).
In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Actual results may differ materially from those discussed in 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 SEC.
Executive Summary
Overview
We are one of America’s leading financial services companies, providing: (i) advice and solutions for helping Americans set and meet their retirement goals and protect and transfer their wealth across generations; and (ii) a wide range of investment management insights, expertise and innovations to drive better investment decisions and outcomes for clients worldwide.
As previously announced, effective July 1, 2025, our financial reporting presentation was revised to reflect the reorganization of the Company’s reportable segments to reflect how the Company’s chief operating decision maker now makes operating decisions and assesses performance. We manage our business through three segments: Retirement, Asset Management and Wealth Management. We report certain activities and items that are not included in these segments in Corporate and Other. Prior period results have been revised in connection with updates to our reportable segments. See Note 16 of the Notes to the Consolidated Financial Statements for further information on our 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.
Overview of Recent Developments
Corebridge Merger
On March 26, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among Holdings, Corebridge Financial, Inc., a Delaware corporation (“Corebridge”), Mountain Holding, Inc., a newly formed Delaware corporation and wholly-owned subsidiary of Corebridge (“Corebridge HoldCo”), Marcy Holding, Inc., a newly formed Delaware corporation and a wholly-owned subsidiary of Corebridge HoldCo (“Equitable Merger Sub”), and Palisade Holding, Inc., a newly formed Delaware corporation and a wholly-owned subsidiary of Corebridge HoldCo (“Corebridge Merger Sub”).
Holdings and Corebridge have agreed, subject to the terms and conditions of the Merger Agreement, to effect an all stock merger transaction to combine their respective businesses by: (a) Corebridge Merger Sub merging with and into Corebridge, with Corebridge surviving such merger as a wholly-owned subsidiary of Corebridge HoldCo (the “Corebridge Merger”), (b) immediately following the consummation of the Corebridge Merger, Equitable Merger Sub merging with and into Holdings, with Holdings surviving such merger as a wholly-owned subsidiary of Corebridge HoldCo (the “Equitable Merger” and, together with the Corebridge Merger, the “Proposed Transaction”), and (c) as of the closing of the Proposed Transaction (the “Closing”), changing the name of Corebridge HoldCo to “Equitable Holdings, Inc.”
On July 30, 2026, stockholders of both Holdings and Corebridge voted to approve all stockholder proposals necessary to complete the Proposed Transaction at their respective special stockholder meetings. The Proposed Transaction is expected to close by the end of 2026, subject to customary closing conditions, including the receipt of required regulatory approvals.
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 Environment
U.S. equity markets staged a strong reversal in the second quarter 2026, with the S&P 500 Index returning approximately 15%, its best quarterly performance since the 2020 post-pandemic rebound, while the Russell 2000 surged more than 21% for its strongest quarter in decades. A wide variety of factors continue to cause market volatility and heighten concerns regarding inflation. These factors include, among others, concerns around private credit, interest rate changes, AI-related concerns, and escalating geopolitical tensions, including increased tariffs and other trade restrictions and barriers, high fuel and energy costs, ongoing economic disruption, and other factors, including the Ukraine-Russia conflict and conflict in the Middle East. For further information on the risk of increased volatility in the financial markets to our business, see “Risk Factors—Risks Relating to Conditions in the Financial Markets and Economy—Conditions in the global capital markets and the economy and Equity market declines and volatility” in the 2025 Form 10-K.
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. 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 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.
The potential for increased volatility 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” in the 2025 Form 10-K.
Regulatory Developments
Our U.S. life insurance subsidiaries are regulated primarily at the state level, with some policies and products also subject to federal regulation. Holdings and its insurance subsidiaries are subject to regulation under the insurance holding company laws of various U.S. jurisdictions. 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, capital requirements and profitability of the industry and result in increased regulation and oversight for the industry.
Insurance Regulation
Regulation of Investments
The NAIC is evaluating the risks associated with insurers’ investments in certain categories of structured securities, including CLOs. In 2023, the NAIC approved interim rules that raise capital requirements for holdings of CLO and other asset-backed security residual interests. Effective January 1, 2024, the NAIC adopted an amendment to the Purposes and Procedures Manual of the NAIC Investment Analysis Office (the “Purposes and Procedures Manual”) to give the NAIC’s Structured Securities Group, housed within the NAIC’s Securities Valuation Office (the “SVO”), responsibility for modeling CLO securities and evaluating tranche level losses across all debt and equity tranches under a series of calibrated and weighted collateral stress scenarios in order to assign NAIC Designations. Under the amended Purposes and Procedures Manual, CLO investments will no longer be broadly exempt from filing with the SVO based on ratings from credit rating providers. The NAIC’s goal is to ensure that the weighted average RBC factor for owning all tranches of a CLO more closely aligns with what would be required for directly owning all of the underlying loan collateral, in order to avoid RBC arbitrage. The NAIC has delayed reporting multiple times with the goal currently being to require reporting by year-end 2026. The NAIC is collaborating with interested parties to refine the process for modeling CLO investments.
In related work, the NAIC’s Financial Condition (E) Committee launched a holistic review of the insurance regulatory framework related to insurer investment risk regulation, on which work began in 2023. The primary objective is to enhance the insurance regulatory framework in order to strengthen oversight of insurers’ investments. The proposed changes to modernize
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investment oversight include (i) reducing / eliminating “blind” reliance on credit rating providers while continuing to use them by implementing a due diligence framework that oversees the effectiveness of credit rating providers; and (ii) bolstering the SVO’s risk analysis capabilities by investing in a risk analytics tool and adding specialized personnel. Effective January 1, 2026, the NAIC replaced the former Valuation of Securities (E) Task Force with a new Invested Assets (E) Task Force and three working groups related to the oversight of insurance company investments and credit rating provider matters.
In November 2024, the NAIC adopted an amendment to the Purposes and Procedures Manual effective January 1, 2026, which sets forth procedures for SVO staff to identify and evaluate a filing-exempt security with an NAIC Designation determined by a rating that appears to be an unreasonable assessment of investment risk. The procedures include, without limitation, sending an information request to insurers that hold the security under review and determining whether the NAIC Designation is three or more notches different from the SVO’s assessment, which would allow the SVO to request the removal of the credit rating from the filing exempt process. At any time during the process, an alternate credit rating may be requested and, if one is received, it will be incorporated into the filing exempt process. The NAIC has developed the technology enhancements necessary to carry out these procedures and this process is now operational.
In February 2025, the NAIC announced the formation of a new Risk-Based Capital Model Governance (EX) Task Force. The purpose of the new task force is to provide executive-level oversight and coordination of the various NAIC groups that are reviewing RBC-related standards. The task force is also charged with completing a comprehensive gap analysis to identify gaps in the current RBC framework and developing guiding principles for future RBC adjustments. In September 2025, the task force exposed for comment an updated proposed set of RBC principles with the aim of enhancing RBC precision with respect to asset risk.
In June 2023, the NAIC increased the RBC factor for structured security residual tranches from 30% to 45%, which became effective for year-end 2024 RBC filings. The NAIC has been assessing the RBC treatment of CLOs and in June 2026, the NAIC’s Financial Condition (E) Committee adopted a proposal, which incorporates the American Academy of Actuaries’s model C-1 (asset risk) factors for CLOs, collateralized bond obligations, and collateralized debt obligations into the NAIC’s Life and Fraternal Risk-Based Capital Blanks, Instructions, and Formula, effective for year-end 2026.
The NAIC undertook a principles-based bond project, considering factors to determine whether an investment in an asset-backed security, for example, qualifies for reporting on an insurer’s statutory financial statement as a bond on Schedule D-1 as opposed to Schedule BA (other long-term investment assets), the latter of which generally has a higher risk charge. As a result, the NAIC adopted a new, principles-based definition of a bond that became effective in certain statutory accounting guidance as of January 1, 2025. The guidance sets forth reporting and disclosure requirements.
Principle-Based Reserving
In August 2025, the NAIC adopted a principle-based reserving framework for non-variable annuities, similar to VM-20 for life insurance business and VM-21 for variable annuities, located in Section VM-22 of the NAIC Valuation Manual (“VM-22”). The framework for non-variable annuities applies to contracts issued on or after January 1, 2026 and companies have a three-year optional implementation period before the VM-22 PBR requirements become mandatory to all applicable blocks of business. The NAIC’s Life Actuarial (A) Task Force is currently considering further revisions for VM-22 specific to pension risk transfer annuities. The ultimate financial impact from these developments on Equitable Financial and Equitable America is uncertain but could result in more volatile and less predictable reserve and capital levels for these products.
FABN Disclosures
The NAIC is considering various topics related to funding agreement-backed notes and similar programs. As part of this effort, the NAIC’s Statutory Accounting Principles (E) Working Group adopted revisions to SSAP No. 52 — Deposit-Type Contracts, effective year-end 2026, to require enhanced disclosures for funding agreements that support such programs.
Big Data
The NAIC’s Big Data and Artificial Intelligence (H) Working Group is evaluating AI-use outcomes and how well the current regulatory framework addresses potential harms from the use of AI. The goal is to develop an overall AI regulatory framework that could be incorporated into an NAIC regulatory handbook. For example, the working group aims to finalize during 2026, a tool to collect information about an insurer’s use of AI during an examination or investigation.
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Fiduciary Rules
On April 23, 2024, the U.S. Department of Labor (the “DOL”) issued a regulation that changed the definition of “fiduciary” for purposes of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and parallel provisions of the Internal Revenue Code of 1986, as amended (the “Code”), when a financial professional, including an insurance producer, provides investment advice to investors that are subject to ERISA or to Section 4975 of the Code. Simultaneously, the DOL issued amendments to various existing prohibited transaction exemptions (“PTEs”), including PTE 84-14, that financial professionals rely on when they make investment recommendations to such retirement investors (the new definition of “fiduciary” and the PTE amendments collectively, the “DOL Rule”).
Various industry groups brought litigation against the DOL seeking to overturn the DOL Rule. On July 25, 2024, the U.S. District Court for the Eastern District of Texas issued a stay of the effective date of portions of the DOL Rule. On July 26, 2024, the U.S. District Court for the Northern District of Texas issued a stay of the effective date of the DOL Rule as a whole. The DOL initially appealed the stays issued in these cases to the U.S. Court of Appeals for the Fifth Circuit, but in early 2025, the court granted the DOL’s motion to pause proceedings while it reviewed its posture on these cases. On March 17, 2026, the Court issued an order vacating the 2024 DOL fiduciary rule package in its entirety. Shortly thereafter, the DOL issued a regulation confirming that the pre-2024 versions of the definition of fiduciary investment advice, PTE 84-24, PTE 2020-02, and the other PTE remain in effect.
For additional information on regulatory developments and the risks we face, see “Business—Regulation” and “Risk Factors—Legal and Regulatory Risks” in the 2025 Form 10-K.
Revenues
Our revenues come from three principal sources:
•fee income derived from our retirement and protection products and our asset management services;
•premiums from our traditional life insurance and annuity products; and
•investment income from our General Account investment portfolio.
Our fee income varies directly in relation to the amount of the underlying AV or benefit base of our retirement and protection products, the amount of AUM and AUA in our Wealth Management business, and the amount of AUM in our Asset Management business. AV and AUM, each as defined in “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 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.
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Net Income Volatility
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. We are using a combination of General Account assets and derivatives to manage duration gap on an economic basis. The changes in the values of the derivatives associated with these programs due to equity and interest rate movements, together with the GMxB MRBs assets and liabilities are recognized in net income in the periods in which they occur, while the General Account asset gains and losses are recognized in OCI resulting in an offset between OCI and net income. In addition, we conduct macro hedging to protect our statutory capital which could also cause net income volatility as further described below. Net income is also impacted by changes in our reinsurers credit spread, while changes in the Company’s credit spread is recorded in OCI. See “—Significant Factors Impacting Our Results—Impact of Hedging and GMxB Reinsurance on Results.”
In addition to our dynamic hedging strategy, we have 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 static hedge positions increase the size of our derivative positions and may result in additional 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.”
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 GMxB 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:
•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 recognized in the current period. In addition, we utilize AFS fixed maturity securities in our General Account to mitigate the economic impact of unfavorable changes in GMxB features’ exposures attributable to movements in interest rates. However, the economic effect of interest rate changes on such securities is reflected in OCI, which results in net income volatility as the economic effect of interest rates on our GMxB MRB liabilities is reflected in net income.
•In addition to our dynamic hedging program, we have a hedging program using static hedge positions (derivative positions intended to be HTM with less frequent re-balancing) to protect our statutory capital against stress scenarios. This program, in addition to our dynamic hedge program, has increased the size of our derivative positions, resulting in additional net income volatility. The impacts are most pronounced for variable annuity products.
•GMxB reinsurance contracts. Historically, GMxB reinsurance contracts were used to cede to non-affiliated reinsurers a portion of our exposure to variable annuity products that offer GMxB features. We account for the reinsurance contracts as MRBs and report them at fair value. In addition, on June 1, 2021, we ceded the Block, comprised of non-New York “Accumulator” policies containing fixed rate GMIB and/or GMDB guarantees.
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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 MRBs for our Retirement business and blocks of policies reported in Corporate and Other. (Assumption reviews are not relevant for the Asset Management and Wealth Management segments). 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, VUL insurance and UL insurance products we offer maintain policyholder deposits that are reported as liabilities and classified within either Separate Accounts liabilities or policyholder account balances. Our products and riders also impact liabilities for future policyholder benefits, MRBs and unearned revenues and assets for DAC and DSI. The valuation of these assets and liabilities (other than deposits) is 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 updated annually to estimate the value of future death, morbidity or income benefits; (ii) UL 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; and (iii) certain product guarantees reported as MRBs at fair value.
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.
Key Operating Measures
In addition to our results presented in accordance with U.S. GAAP, we report Non-GAAP Operating Earnings, and Non-GAAP 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-GAAP financial measures, together with relevant U.S. GAAP measures, provide 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 a 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, Policy 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-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 the variable annuity product MRBs. This is a large source of volatility in net income.
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 variable annuity product features, which include: (i) changes in the fair value of MRB and purchased MRB, including the related attributed fees and claims, offset by derivatives and other securities used to hedge the MRB which result in residual net income volatility as the change in fair value of certain securities is reflected in OCI and due to our statutory capital hedge program; and (ii) market adjustments to deposit asset or liability accounts arising from reinsurance agreements which do not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk;
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•Investment (gains) losses, which includes credit loss impairments of securities/investments, sales or disposals of securities/investments, realized capital gains/losses and valuation allowances;
•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 primarily include restructuring costs related to severance and separation, lease write-offs related to non-recurring restructuring activities, 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 and realized capital gains/losses from sales or disposals of select securities, certain legal accruals; 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 those UL policies, impact of the annual actuarial assumption updates attributable to LFPB when the majority of the impact relates to the non-core business; 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 and changes to the deferred tax valuation allowance.
In the third quarter of 2025, the Company updated its net investment income (“NII”) segment reporting to better align with our GAAP segments, as well as the reporting of our spread lending programs' income and expenses. Previously, direct and allocated segment NII were recorded based on assets tied to statutory asset tagging and net statutory liabilities for allocation. To better align with our GAAP segments, the Company changed the recording methodology for direct NII. It is now based on the book yields of assets tied to specific segments, considering General Account values plus reserves, net of embedded derivatives. Indirect NII, which was previously allocated based on net statutory liabilities, is now allocated based on General Account values and reserves, net of embedded derivatives. Additionally, revenues and expenses from our spread lending programs are now primarily recorded within the Retirement segment. Previously, spread lending revenues and expenses were recorded in Corporate and Other, with the excess of revenues over expenses allocated to the insurance segments based on net statutory liabilities. Prior periods have been revised to reflect these changes.
Because Non-GAAP Operating Earnings excludes the foregoing items that can be distortive or unpredictable, management believes that this measure enhances the understanding of our underlying drivers of profitability and trends in our business, thereby allowing management to make decisions that will positively impact our business.
We use the prevailing corporate federal income tax rate of 21% 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.
The table below presents a reconciliation of net income (loss) attributable to Holdings to Non-GAAP Operating Earnings:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions)
Net income (loss) attributable to Holdings $ (453) $ (349) $ 168 $ (286)
Adjustments related to:
Variable annuity product features (1) 1,522 934 1,136 1,145
Investment (gains) losses 65 71 94 85
Net actuarial (gains) losses related to pension and other postretirement benefit obligations 14 11 28 22
Other adjustments (2) (430) (137) (282) 68
Income tax expense (benefit) related to above adjustments (246) (185) (205) (277)
Non-recurring tax items 16 7 21 16
Non-GAAP Operating Earnings $ 488 $ 352 $ 960 $ 773
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(1)As a result of the novation of certain Legacy VA policies completed during the first quarter of 2025, the Company recorded a loss of $499 million in pre-tax net income and an increase of $263 million in pre-tax AOCI, for a total impact loss of $236 million for the six months ended June 30, 2025.
(2)Includes the following impacts on Non-VA derivatives: a gain of $198 million and $33 million for the three and six months ended June 30, 2025, respectively; a loss of $176 million and $322 million for the three and six months ended June 30, 2026, respectively. Also
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includes $14 million of expense related to a disputed billing practice of an AB third-party service provider for the three and six months ended June 30, 2025, respectively.
We calculate Non-GAAP Operating ROE by dividing Non-GAAP Operating Earnings for the previous twelve calendar months by consolidated average equity attributable to Holdings’ common shareholders, excluding 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 AFS securities. Therefore, we believe excluding AOCI is more effective for analyzing the trends of our operations.
The following table presents return on average equity attributable to Holdings’ common shareholders, excluding AOCI and Non-GAAP Operating ROE for the trailing twelve months:
Trailing Twelve Months Ended June 30, 2026
(Dollars in millions)
Net income (loss) available to Holdings’ common shareholders $ (982)
Average equity attributable to Holdings’ common shareholders, excluding AOCI $ 5,132
Return on average equity attributable to Holdings’ common shareholders, excluding AOCI (19.1) %
Non-GAAP Operating Earnings available to Holdings’ common shareholders $ 1,872
Average equity attributable to Holdings’ common shareholders, excluding AOCI $ 5,132
Non-GAAP Operating ROE 36.5 %
Non-GAAP Operating Common EPS
Non-GAAP operating common EPS is calculated by dividing Non-GAAP Operating Earnings by diluted common shares outstanding. The following table sets forth Non-GAAP operating common EPS:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(per share amounts)
Net income (loss) attributable to Holdings $ (1.63) $ (1.15) $ 0.60 $ (0.94)
Less: Preferred stock dividends 0.05 0.06 0.10 0.10
Net income (loss) available to Holdings’ common shareholders (1.68) (1.21) 0.50 (1.04)
Adjustments related to:
Variable annuity product features (1) 5.47 3.08 4.03 3.75
Investment (gains) losses 0.23 0.23 0.33 0.28
Net actuarial (gains) losses related to pension and other postretirement benefit obligations 0.05 0.04 0.10 0.07
Other adjustments (2) (1.55) (0.45) (0.99) 0.23
Income tax expense (benefit) related to above adjustments (0.88) (0.61) (0.73) (0.91)
Non-recurring tax items 0.06 0.02 0.07 0.05
Non-GAAP operating common EPS $ 1.70 $ 1.10 $ 3.31 $ 2.43
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(1)As a result of the novation of certain Legacy VA policies completed during the first quarter of 2025, the Company recorded an impact per common shares of $1.63 for the six months ended June 30, 2025.
(2)Includes the following impacts on Non-VA derivatives: a gain of $0.65 and $0.11 for the three and six months ended June 30, 2025, respectively; a loss of $0.63 and $1.14 for the three and six months ended June 30, 2026, respectively. Also includes $0.05 of expense related to a disputed billing practice of an AB third-party service provider for the three and six months ended June 30, 2025, respectively.
AUM means investment assets that are managed by one of our subsidiaries and includes: (i) assets managed by AB; (ii) the assets in our General Account investment portfolio; and (iii) the Separate Accounts assets of our annuity and life insurance policies. Total AUM reflects exclusions between segments to avoid double counting.
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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.
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.
Life Reserves
Life Reserves equals the aggregate value of policyholders’ account balances and future policy benefits for policies in Corporate and Other.
Consolidated Results of Operations
Our consolidated results of operations are significantly affected by conditions in the capital markets and the economy because we offer 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 risk of movements in the equity markets and interest rates. The volatility in net income attributable to Holdings for the periods presented below results from the mismatch between: (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; (ii) the change in fair value of products with the GMIB feature that have a no-lapse guarantee; and (iii) our hedging and reinsurance programs.
Ownership and Consolidation of AllianceBernstein
Our indirect, wholly owned subsidiary, AllianceBernstein Corporation is the General Partner of AB. Accordingly, AB’s results are fully reflected in our consolidated financial statements. For additional information on our economic interest in AB, see Note 1 of the Notes to the Consolidated Financial Statements.
Consolidated Results of Operations
The following table summarizes our consolidated statements of income (loss):
Consolidated Statements of Income (Loss)
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions, except per share data)
REVENUES
Policy charges and fee income $ 426 $ 626 $ 855 $ 1,262
Premiums 268 260 508 564
Net derivative gains (losses) (2,055) (1,374) (1,475) (575)
Net investment income (loss) 1,397 1,355 2,681 2,603
Investment gains (losses), net:
Credit and intent to sell losses on available-for-sale debt securities and loans (44) (54) (37) (54)
Other investment gains (losses), net (21) (17) (57) (31)
Total investment gains (losses), net (65) (71) (94) (85)
Investment management and service fees 1,328 1,272 2,655 2,557
Other income 359 294 758 612
Total revenues 1,658 2,362 5,888 6,938
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Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions, except per share data)
BENEFITS AND OTHER DEDUCTIONS
Policyholders’ benefits 435 787 820 1,546
Remeasurement of liability for future policy benefits (15) (13) (6) (15)
Change in market risk benefits and purchased market risk benefits (1,001) (606) (676) 66
Interest credited to policyholders’ account balances 834 796 1,604 1,474
Compensation and benefits 642 592 1,267 1,193
Commissions and distribution-related payments 562 488 1,118 989
Interest expense 56 61 118 116
Amortization of deferred policy acquisition costs 214 193 423 381
Other operating costs and expenses 424 427 826 1,377
Total benefits and other deductions 2,151 2,725 5,494 7,127
Income (loss) from continuing operations, before income taxes (493) (363) 394 (189)
Income tax (expense) benefit 140 80 (16) 56
Net income (loss) (353) (283) 378 (133)
Less: Net income (loss) attributable to the noncontrolling interest 100 66 210 153
Net income (loss) attributable to Holdings (453) (349) 168 (286)
Less: Preferred stock dividends 13 18 27 32
Net income (loss) available to Holdings’ common shareholders $ (466) $ (367) $ 141 $ (318)
EARNINGS PER COMMON SHARE
Net income (loss) applicable to Holdings’ common shareholders per common share:
Basic $ (1.68) $ (1.21) $ 0.50 $ (1.04)
Diluted $ (1.68) $ (1.21) $ 0.50 $ (1.04)
Weighted average common shares outstanding (in millions):
Basic 278.3 303.2 279.8 305.5
Diluted 278.3 303.2 281.6 305.5
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions)
Non-GAAP Operating Earnings $ 488 $ 352 $ 960 $ 773
The following table summarizes our Non-GAAP Operating Earnings per common share:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(per share amounts)
Non-GAAP Operating Earnings per common share:
Basic $ 1.70 $ 1.10 $ 3.33 $ 2.43
Diluted $ 1.70 $ 1.10 $ 3.31 $ 2.43
Three Months Ended June 30, 2026 Compared to the Three Months Ended June 30, 2025
Net Income (Loss) Attributable to Holdings
Net loss attributable to Holdings increased $104 million to $453 million for the three months ended June 30, 2026 from $349 million in the three months ended June 30, 2025. The following notable items were the primary drivers for the change in net income (loss):
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Unfavorable items included:
•Net derivative losses increased by $681 million mainly due to higher equity market appreciation during the second quarter 2026 compared to the second quarter 2025.
•Commissions and distribution-related payments increased by $74 million mainly due to higher retirement sales and asset-based commissions.
•Fee-type revenue decreased by $71 million mainly due to the reinsurance transaction with RGA, partially offset by higher advisory fee-type revenue and higher Separate Account values.
•Compensation, benefits, interest and other operating expenses increased by $42 million mainly due to higher incentive compensation in our Asset Management segment.
•Interest credited to policyholders’ account balances increased by $38 million mainly due to growth of account values in our Retirement segment, partially offset by the reinsurance transaction with RGA.
•Amortization of DAC increased by $21 million mainly due to growth in our Retirement segment from sales momentum.
•Net income attributable to noncontrolling interest increased by $34 million mainly due to increased gains from consolidated VIEs.
These were partially offset by the following favorable items:
•Change in market risk benefits and purchased market risk benefits decreased by $395 million mainly due to higher equity market appreciation during the second quarter 2026 compared to the second quarter 2025.
•Policyholders’ benefits decreased by $352 million mainly due to the reinsurance transaction with RGA.
•Net investment income increased by $42 million mainly due to higher average asset balances, partially offset by the reinsurance transaction with RGA and lower income from Alternative investments.
•Income tax benefit increased by $60 million primarily due to a higher pre-tax loss for the three months ended June 30, 2026.
Non-GAAP Operating Earnings
Non-GAAP Operating Earnings increased by $136 million to $488 million for the three months ended June 30, 2026 from $352 million in the three months ended June 30, 2025. The following notable items were the primary drivers for the change in Non-GAAP Operating Earnings:
Favorable items included:
•Policyholders’ benefits decreased by $352 million mainly due to the reinsurance transaction with RGA.
These were partially offset by the following unfavorable items:
•Commissions and distribution-related payments increased by $74 million mainly due to higher retirement sales and asset-based commissions.
•Fee-type revenue decreased by $55 million mainly due to the reinsurance transaction with RGA, partially offset by higher advisory fee-type revenue and higher Separate Account values.
•Compensation, benefits, interest and other operating expenses increased by $28 million mainly due to higher incentive compensation in our Asset Management segment.
•Interest credited to policyholders’ account balances increased by $23 million mainly due to growth of account values in our Retirement segment, partially offset by the reinsurance transaction with RGA.
•Amortization of DAC increased by $21 million mainly due to growth in our Retirement segment from sales momentum.
•Net investment income decreased by $10 million mainly due to lower gains from seed capital investments in our Asset Management segment.
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Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025
Net Income (Loss) Attributable to Holdings
Net income attributable to Holdings increased $454 million to $168 million during the six months ended June 30, 2026, from a $286 million net loss in the six months ended June 30, 2025. The following were notable changes in net income (loss):
Favorable items included:
•Change in market risk benefits and purchased market risk benefits decreased by $742 million mainly due to higher equity market appreciation and an increase in interest rates in the first six months of 2026 compared to lower equity market appreciation and a decrease in interest rates in the first six months of 2025.
•Policyholders’ benefits decreased by $726 million primarily due to the reinsurance transaction with RGA.
•Compensation, benefits, interest and other operating expenses decreased by $475 million mainly due to the Venerable novation loss recorded in the prior year.
•Net investment income increased by $78 million mainly due to higher average asset balances, partially offset by the reinsurance transaction with RGA and lower income from Alternative investments.
These were partially offset by the following unfavorable items:
•Net derivative losses increased by $900 million primarily due to higher equity market appreciation during the first six months of 2026 compared to the first six months of 2025.
•Fee-type revenue decreased by $219 million mainly driven by the reinsurance transaction with RGA, partially offset by higher advisory fee-type revenue and higher Separate Account values.
•Interest credited to policyholders’ account balances increased by $130 million mainly due to growth of account values in our Retirement segment, partially offset by the reinsurance transaction with RGA.
•Commissions and distribution-related payments increased by $129 million mainly due to higher retirement sales and asset-based commissions.
•Amortization of DAC increased by $42 million mainly due to growth in our Retirement segment from sales momentum.
•Investment losses increased by $9 million primarily due to mortgage valuation allowances.
•Net income attributable to noncontrolling interest increased by $57 million mainly due to increased gains from consolidated VIEs and higher AB pre-tax earnings, partially offset by an increase in average economic ownership of AB.
•Income tax expense was $16 million for the first six months of 2026 compared to an income tax benefit of $56 million for the first six months of 2025. This was primarily due to pre-tax income in the first six months of 2026 compared to a pre-tax loss in the first six months of 2025.
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 increased by $187 million to $960 million for the six months ended June 30, 2026 from $773 million in the six months ended June 30, 2025. The following were notable changes in Non-GAAP Operating Earnings:
Favorable items included:
•Policyholders’ benefits decreased by $726 million due to the impact of the reinsurance transaction with RGA.
•Compensation, benefits, interest expense and other operating costs decreased by $17 million mainly due to the reinsurance transaction with RGA.
•Net income attributable to the noncontrolling interest decreased by $12 million mainly due to an increase in average economic ownership of AB, partially offset by higher pre-tax earnings.
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These were partially offset by the following unfavorable items:
•Fee-type revenue decreased by $252 million mainly driven by the reinsurance transaction with RGA, partially offset by higher advisory fee-type revenue and higher Separate Account values.
•Interest credited to policyholders’ account balances increased by $148 million mainly due to growth of AVs in our Retirement segment, partially offset by the reinsurance transaction with RGA.
•Commissions and distribution-related payments increased by $129 million mainly due to higher retirement sales and asset-based commissions.
•Amortization of DAC increased by $42 million mainly due to growth in our Retirement segment from sales momentum.
Results of Operations by Segment
As previously announced, effective July 1, 2025, our financial reporting presentation was revised to reflect the reorganization of the Company’s reportable segments to reflect how the Company’s CODM now makes operating decisions and assesses performance. Prior period results have been revised in connection with updates to our reportable segments.
We manage our business through the following three segments: Retirement, Asset Management and Wealth Management. We report certain activities and items that are not included in our three segments in Corporate and Other. The following section presents our discussion of operating earnings (loss) by segment and trends in AUM, AV and Policy Reserves, 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 16 of the Notes to the Consolidated Financial Statements for further information on our segments.
The following table summarizes operating earnings (loss) on our segments and Corporate and Other:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions)
Operating earnings (loss) by segment:
Retirement $ 402 $ 354 $ 798 $ 734
Asset Management 158 131 298 257
Wealth Management 63 50 118 95
Corporate and Other (135) (183) (254) (313)
Non-GAAP Operating Earnings $ 488 $ 352 $ 960 $ 773
Effective Tax Rates by Segment
The following table summarizes income tax expense which was allocated to the Company’s business segments:
Six Months Ended June 30,
2026 2025
(percentages)
Effective Tax Rates by Segment:
Retirement 12 % 16 %
Asset Management 22 % 26 %
Wealth Management 22 % 25 %
Consolidated Non-GAAP Operating Earnings 16 % 20 %
Retirement
The Retirement segment provides retirement savings and income solutions to individual and institutional clients. Our primary offerings include individual and group annuities, retirement savings plans, and institutional savings products, which we distribute through both proprietary and third-party distribution. Results of our spread lending business are also reported within the Retirement segment.
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The following table summarizes operating earnings (loss) of our Retirement segment:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions)
Operating earnings (loss) $ 402 $ 354 $ 798 $ 734
Key components of operating earnings (loss) were:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions)
REVENUES
Policy charges, fee income and premiums $ 328 $ 287 $ 635 $ 593
Net investment income 1,234 1,048 2,427 2,035
Net derivative gains (losses) (4) (5) (10) (10)
Investment management, service fees and other income 190 161 375 328
Segment revenues $ 1,748 $ 1,491 $ 3,427 $ 2,946
BENEFITS AND OTHER DEDUCTIONS
Policyholders’ benefits $ 79 $ 76 $ 149 $ 168
Remeasurement of liability for future policy benefits (2) — (3) (1)
Interest credited to policyholders’ account balances 774 632 1,511 1,162
Commissions and distribution-related payments 176 145 347 287
Amortization of deferred policy acquisition costs 164 143 324 282
Compensation, benefits and other operating costs and expenses 105 71 197 175
Interest expense — — — —
Segment benefits and other deductions $ 1,296 $ 1,067 $ 2,525 $ 2,073
The following table summarizes AV for our Retirement segment:
June 30, 2026 December 31, 2025
(in millions)
AV (1)
General Account $ 106,931 $ 97,628
Separate Accounts 82,008 77,257
Total AV $ 188,939 $ 174,885
_____________
(1)AV presented are net of reinsurance.
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The following table summarizes a roll-forward of AV for our Retirement segment:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions)
Balance, beginning of period $ 171,597 $ 149,608 $ 174,885 $ 151,198
Gross premiums and deposits 6,881 6,164 13,500 12,217
Surrenders, withdrawals and benefits (5,197) (4,245) (10,528) (8,674)
Net flows 1,684 1,919 2,972 3,543
Net flows ceded for third-party flow reinsurance (496) — (891) —
Change in market value and reinvestment 8,233 5,303 6,481 5,025
Change in fair value of embedded derivative instruments 7,921 4,612 5,492 1,676
Balance, end of period 188,939 161,442 188,939 161,442
End of period embedded derivative 25,230 18,097 25,230 18,097
Balance as of end of period, net of embedded derivative 163,709 143,345 163,709 143,345
Total spread lending balances, end of period 19,658 16,315 19,658 16,315
Reserves, end of period (excluding MRBs) 5,400 4,995 5,400 4,995
Balance, end of period, General Account asset value $ 188,767 $ 164,655 $ 188,767 $ 164,655
Three Months Ended June 30, 2026 Compared to the Three Months Ended June 30, 2025 for the Retirement Segment
Operating earnings
Operating earnings increased $48 million to $402 million during the three months ended June 30, 2026 from $354 million during the three months ended June 30, 2025. The following notable items were the primary drivers of the change in operating earnings:
Favorable items included:
•Net investment income increased by $186 million mainly due to higher average asset balances.
•Fee-type revenue increased by $70 million mainly due to higher Separate Account values from market appreciation.
•Income tax expense decreased by $20 million mainly driven by a lower effective rate for the three months ended June 30, 2026.
These were partially offset by the following unfavorable items:
•Interest credited to policyholders’ account balances increased by $142 million mainly due to the growth of account values.
•Compensation, benefits, interest expense and other operating costs increased by $34 million driven by higher allocated corporate expenses.
•Commissions and distribution-related payments increased by $31 million mainly due to higher asset-based commissions and sales volumes.
•Amortization of DAC increased by $21 million mainly driven by growth in the business from sales momentum.
Net Flows and AV
•Total AV as of June 30, 2026 was $188.9 billion, an increase of $17.3 billion, compared to March 31, 2026. The increase in AV was primarily due to $16.2 billion of market appreciation and change in fair value of embedded derivative instruments in the second quarter 2025 and $1.7 billion of net inflows.
•Net inflows of $1.7 billion were $235 million lower than in the three months ended June 30, 2025, mainly driven by higher outflows, partially offset by higher gross premiums.
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Six Months Ended June 30, 2026, Compared to the Six Months Ended June 30, 2025, for the Retirement Segment
Operating earnings
Operating earnings increased $64 million to $798 million during the six months ended June 30, 2026, from $734 million during the six months ended June 30, 2025. The following were notable changes in operating earnings (losses):
Favorable items included:
•Net investment income increased by $392 million mainly due to higher average asset balances.
•Fee-type revenue increased by $89 million mainly due to higher Separate Account values from market appreciation.
•Policyholders’ benefits decreased by $19 million mainly due to lower annuitizations, offset by lower premiums in fee-type revenue.
•Income tax expense decreased by $35 million mainly driven by a lower effective rate for the six months ended June 30, 2026.
These were partially offset by the following unfavorable items:
•Interest credited to policyholders’ account balances increased by $349 million mainly due to growth of account values.
•Commissions and distribution-related payments increased by $60 million mainly due to higher asset-based commissions and sales volumes.
•Amortization of DAC increased by $42 million mainly due to growth in the business from sales momentum.
•Compensation, benefits, interest expense and other operating costs increased by $22 million mainly due to higher allocated corporate expenses.
Net Flows and AV
•The increase in AV of $14.1 billion in the six months ended June 30, 2026, was driven by an increase in investment performance as a result of market appreciation and change in fair value of embedded derivative instruments of $12.0 billion in the six months ended June 30, 2026, partially offset by net inflows of $3.0 billion.
•Net inflows of $3.0 billion were $571 million lower than in the six months ended June 30, 2025, mainly driven by higher outflows in the six months ended June 30, 2026, partially offset by higher gross premiums.
Asset Management
The Asset Management segment provides diversified investment management and related services to a broad range of clients around the world. Operating earnings (loss), net of tax, presented here represents our average economic interest in AB of approximately 68% and 68% during the three and six months ended June 30, 2026, respectively, and 69% and 65% during the three and six months ended June 30, 2025, respectively. The increase in economic interest was due to the purchase of AB Holding Units relating to the AB Tender Offer completed on April 3, 2025.
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions)
Operating earnings (loss) $ 158 $ 131 $ 298 $ 257
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Key components of operating earnings (loss) were:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions)
REVENUES
Net investment income (loss) $ 12 $ 22 $ 6 $ 25
Net derivative gains (losses) (10) (11) (6) (24)
Investment management, service fees and other income 1,132 1,083 2,248 2,181
Segment revenues $ 1,134 $ 1,094 $ 2,248 $ 2,182
BENEFITS AND OTHER DEDUCTIONS
Commissions and distribution related payments $ 194 $ 197 $ 391 $ 398
Compensation, benefits and other operating costs and expenses 649 625 1,281 1,232
Interest expense 7 9 14 16
Segment benefits and other deductions $ 850 $ 831 $ 1,686 $ 1,646
Changes in AUM in the Asset Management segment were as follows:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in billions)
Balance, beginning of period $ 838.6 $ 784.5 $ 866.9 $ 792.2
Long-term flows
Sales/new accounts 44.8 27.9 80.4 64.0
Redemptions/terminations (37.5) (30.7) (73.3) (60.4)
Cash flow/unreinvested dividends (6.5) (3.9) (13.4) (7.9)
Net long-term (outflows) inflows 0.8 (6.7) (6.3) (4.3)
Market appreciation (depreciation) 66.1 51.3 44.9 41.2
Net change 66.9 44.6 38.6 36.9
Balance, end of period $ 905.5 $ 829.1 $ 905.5 $ 829.1
Average AUM in the Asset Management segment for the periods presented by distribution channel and investment services were as follows:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in billions)
Distribution Channel:
Institutions $ 363.1 $ 329.0 $ 361.1 $ 327.5
Retail 355.1 331.3 355.7 334.1
Private Wealth 163.0 139.2 161.2 138.9
Total $ 881.2 $ 799.5 $ 878.0 $ 800.5
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Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in billions)
Investment Service:
Equity Actively Managed $ 273.2 $ 258.5 $ 275.2 $ 261.7
Equity Passively Managed (1) 82.3 67.8 80.9 68.5
Fixed Income Actively Managed – Taxable 208.6 210.2 210.9 210.7
Fixed Income Actively Managed – Tax-exempt 96.3 78.6 94.7 78.1
Fixed Income Passively Managed (1) 11.6 10.1 10.8 10.2
Alternatives/Multi-Asset Solutions (2) 209.2 174.3 205.5 171.3
Total $ 881.2 $ 799.5 $ 878.0 $ 800.5
____________
(1)Includes index and enhanced index services.
(2)Includes certain multi-asset solutions and services not included in equity or fixed income services.
Three Months Ended June 30, 2026 Compared to the Three Months Ended June 30, 2025 for the Asset Management Segment
Operating earnings
Operating earnings increased $27 million to $158 million during the three months ended June 30, 2026 from $131 million during the three months ended June 30, 2025. The following notable items were the primary drivers of the change in operating earnings:
Favorable items included:
•Fee-type revenue increased by $49 million primarily due to higher investment base advisory fees and higher distribution revenue from higher average AUM, partially offset by lower revenue from performance fees and lower portfolio fee rates.
•Income tax expense decreased by $12 million mainly driven by a lower effective tax rate for the six months ended June 30, 2026.
These were partially offset by the following unfavorable items included:
•Compensation, benefits and other operating costs and expenses increased by $24 million primarily due to higher incentive compensation.
•Net investment income decreased by $10 million mainly due to lower gains from seed capital investments.
Long-Term Net Flows and AUM
•Total AUM as of June 30, 2026 was $905.5 billion, up $66.9 billion or 8.0%, compared to March 31, 2026. During the second quarter 2026, AUM increased as a result of market appreciation of $66.1 billion and net inflows of $0.8 billion. Market appreciation was attributed to Retail of $31.6 billion, Institutions of $22.1 billion, and Private Wealth of $12.4 billion. Net inflows were due to Institutions net inflows of $0.6 billion, Retail net inflows of $0.9 billion, partially offset by Private Wealth net outflows of $0.7 billion.
Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025 for the Asset Management Segment
Operating earnings
Operating earnings increased $41 million to $298 million during the six months ended June 30, 2026, from $257 million in the six months ended June 30, 2025. The following were notable changes in operating earnings (losses):
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Favorable items included:
•Fee-type revenue increased by $67 million primarily due to higher investment base advisory fees from higher average AUM partially offset by lower performance fees and lower fee rates.
•Net derivative losses decreased by $18 million mainly due to higher losses from economically hedging seed capital investments (primarily offset in Net investment income).
•Commissions and distribution-related payments decreased by $7 million mainly due to lower distribution expenses from shift in product mix of funds with lower distribution rates partially offset by higher average AUM.
•Net income attributable to noncontrolling interest decreased by $11 million due to an increase in average economic ownership of AB, partially offset by higher pre-tax earnings.
These were partially offset by the following unfavorable items:
•Compensation, benefits and other operating costs and expenses increased by $49 million primarily due to higher incentive compensation and higher general administrative expenses.
•Net investment income decreased by $19 million mainly due to lower gains from seed capital investments (primarily offset by Net derivatives losses).
Long-Term Net Flows and AUM
•Total AUM as of June 30, 2026, was $905.5 billion, up $38.6 billion, or 4.5%, compared to December 31, 2025. The increase is primarily the result of market appreciation of $44.9 billion and net outflows of $6.3 billion. Market appreciation of $44.9 billion is attributed to Institutions of $17.2 billion, Retail of $16.9 billion and Private Wealth of $10.8 billion. Net outflows were driven by Retail of $4.9 billion and Institutions of $1.4 billion.
Wealth Management
The Wealth Management segment is an emerging leader in the wealth management space with a differentiated advice value proposition that offers discretionary and non-discretionary investment advisory accounts, financial planning and advice, life insurance, and annuity products.
The following table summarizes operating earnings (loss) of our Wealth Management segment:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions)
Operating earnings (loss) $ 63 $ 50 $ 118 $ 95
Key components of operating earnings (loss) were:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions)
REVENUES
Net investment income $ 3 $ 2 $ 6 $ 5
Investment management, service fees and other income 541 467 1,079 926
Segment revenues $ 544 $ 469 $ 1,085 $ 931
BENEFITS AND OTHER DEDUCTIONS
Commissions and distribution-related payments $ 353 $ 296 $ 701 $ 589
Compensation, benefits and other operating costs and expenses 112 105 233 214
Segment benefits and other deductions $ 465 $ 401 $ 934 $ 803
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The following table summarizes revenue by activity type for our Wealth Management segment:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions)
Revenue by Activity Type
Investment management, service fees and other income:
Investment management and advisory fees $ 235 $ 184 $ 464 $ 365
Distribution fees 289 268 581 531
Interest income 9 10 18 21
Service and other income 8 5 16 9
Total Investment management, service fees and other income $ 541 $ 467 $ 1,079 $ 926
The following table summarizes a roll-forward of AUA for our Wealth Management segment:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions)
Total Wealth Management Assets
Advisory assets:
Balance, beginning of period $ 87,605 $ 66,795 $ 82,594 $ 65,839
Acquired assets — — 4,508 —
Net new assets 1,992 2,027 4,013 4,008
Market appreciation (depreciation) and other 6,151 4,471 4,633 3,446
Advisory ending assets $ 95,748 $ 73,293 $ 95,748 $ 73,293
Acquired assets, brokerage and direct $ — — — —
Brokerage and direct assets 44,838 36,972 44,838 36,972
Balance, end of period (1) $ 140,586 $ 110,265 $ 140,586 $ 110,265
_____________
(1)Some operating metrics have been revised for prior periods. Net New Assets consist of total client deposits into advisory accounts less total client withdrawals from advisory accounts, plus dividends, plus interest, minus advisory fees. AUA reflects adjusted balances with no financial impact.
Three Months Ended June 30, 2026 Compared to the Three Months Ended June 30, 2025 for the Wealth Management Segment
Operating earnings
Operating earnings increased by $13 million to $63 million during the three months ended June 30, 2026 from $50 million in the three months ended June 30, 2025. The following were notable changes in operating earnings:
Favorable items included:
•Investment management, service fees and other income increased by $74 million mainly due to higher advisory fee type revenue attributed to higher average asset balances combined with increased distribution fees from higher retirement sales.
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These were partially offset by the following unfavorable items:
•Commissions and distribution-related payments increased by $57 million mainly due to higher distribution and advisory fee type revenue from higher retirement sales and average asset balances.
Net Flows and AV
•The increase in AUA of $8.1 billion in the three months ended June 30, 2026 was mainly driven by market appreciation and strong advisory net new assets of $2.0 billion.
•Advisory net new assets of $2.0 billion were $35 million lower than in the three months ended June 30, 2025.
Six Months Ended June 30, 2026, Compared to the Six Months Ended June 30, 2025, for the Wealth Management Segment
Operating earnings
Operating earnings increased $23 million to $118 million during the six months ended June 30, 2026, compared to $95 million in the six months ended June 30, 2025. The following were notable changes in operating earnings:
Favorable items included:
•Investment management, service fees and other income increased by $153 million mainly due to higher advisory fee-type revenue attributed to higher average asset balances combined with increased distribution fees from higher retirement sales.
These were partially offset by the following unfavorable items:
•Commissions and distribution-related payments increased by $112 million mainly driven by higher distribution and advisory fee-type revenue from higher retirement sales and average asset balances.
•Compensation, benefits and other operating costs and expenses increased by $19 million mainly due to higher variable compensation from higher sales.
Net Flows and AUA
•The increase in AUA of $13.2 billion in the six months ended June 30, 2026, was mainly driven by $4.5 billion of acquired assets and net new assets of $4.0 billion, as well as market appreciation of $4.6 billion.
•Net new assets of $4.0 billion were in line with the six months ended June 30, 2025.
Corporate and Other
Corporate and Other includes the Closed Block, results from our run-off blocks of business, and certain strategic investments and unallocated items, including interest and corporate expenses. In addition, beginning with the third quarter of 2025, results for the Individual Life and Employee Benefits businesses are reported in Corporate and Other. On August 3, 2026, Equitable Financial and Equitable America entered into a definitive agreement to sell their respective employee benefits businesses to The Hartford. The transaction is not expected to have a material impact on the financial results of the Company. AB’s results of operations are reflected in the Asset Management segment. Accordingly, Corporate and Other does not include any items applicable to AB.
The following table summarizes operating earnings (loss) of Corporate and Other:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions)
Operating earnings (loss) $ (135) $ (183) $ (254) $ (313)
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Key components of operating earnings (loss) were:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions)
REVENUES
Policy charges, fee income and premiums $ 366 $ 599 $ 728 $ 1,233
Net investment income 86 274 125 501
Net derivative gains (losses) (22) (12) (20) (3)
Investment management, service fees and other income 118 116 240 255
Segment revenues $ 548 $ 977 $ 1,073 $ 1,986
BENEFITS AND OTHER DEDUCTIONS
Policyholders’ benefits $ 356 $ 711 $ 671 $ 1,378
Remeasurement of liability for future policy benefits (13) (13) (3) (14)
Interest credited to policyholders’ account balances 54 173 105 306
Commissions and distribution-related payments 74 72 152 155
Amortization of deferred policy acquisition costs 50 50 99 99
Compensation, benefits and other operating costs and expenses 121 141 209 314
Interest expense 58 69 124 124
Segment benefits and other deductions $ 700 $ 1,203 $ 1,357 $ 2,362
Three Months Ended June 30, 2026 Compared to the Three Months Ended June 30, 2025 for Corporate and Other
Operating earnings (losses)
Operating losses decreased by $48 million to $135 million during the three months ended June 30, 2026 from an operating loss of $183 million during the three months ended June 30, 2025. The following were notable changes in operating earnings:
Favorable items included:
•Policyholders’ benefits decreased by $355 million primarily due to the reinsurance transaction with RGA.
•Interest credited to policyholders’ account balances decreased by $119 million primarily due to the reinsurance transaction with RGA.
•Compensation, benefits, interest expense and other operating costs decreased by $31 million primarily due to the reinsurance transaction with RGA and a one-time adjustment.
These were partially offset by the following unfavorable items:
•Fee-type revenue decreased by $231 million primarily due to the reinsurance transaction with RGA.
•Net investment income decreased by $188 million primarily due to the reinsurance transaction with RGA.
•Net derivative losses increased by $10 million primarily due to higher losses from economically hedging seed capital, offset by Net investment income.
•Income tax benefit decreased by $26 million primarily due to lower pre-tax loss and a lower effective tax rate for the three months ended June 30, 2026.
Six Months Ended June 30, 2026, Compared to the Six Months Ended June 30, 2025, for Corporate and Other
Operating earnings (losses)
Operating losses decreased by $59 million to $254 million during the six months ended June 30, 2026, from an operating loss of $313 million during the six months ended June 30, 2025. The following were notable changes in operating earnings:
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Favorable items included:
•Policyholders’ benefits decreased by $707 million primarily due to the impact of the reinsurance transaction with RGA.
•Interest credited to policyholders’ account balances decreased by $201 million primarily due to the reinsurance transaction with RGA.
•Compensation, benefits, interest expense and other operating costs decreased by $105 million primarily due to the reinsurance transaction with RGA.
These were partially offset by the following unfavorable items:
•Fee-type revenue decreased by $520 million primarily due to the reinsurance transaction with RGA.
•Net investment income decreased by $376 million primarily due to lower average asset balances primarily related to the reinsurance transaction with RGA.
•Net derivative losses increased by $17 million primarily due to higher losses from economically hedging seed capital, offset in Net investment income.
•Remeasurement of liability for future policy benefits increased by $11 million due to more favorable one-time adjustments in 2025 compared to 2026.
•Income tax benefit decreased by $34 million primarily due to a lower pre-tax loss and a lower effective tax rate for the six months ended June 30, 2026.
General Account Investment Portfolio
Our investment philosophy is driven by our long-term commitments to clients, robust risk management and strategic asset allocation. Our General Account investment portfolio investment strategy seeks to achieve sustainable risk-adjusted returns by focusing on principal preservation and investment return, subject to duration and liquidity requirements by product as well as diversification of investment risks. Investment activities are undertaken based on established investment 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 issuers and asset classes, each of which seek to mitigate the impact of cash flow variability arising from these risks. Significant interest rate increases and market volatility since 2022 have reduced the fair value of fixed maturities from a net unrealized gain position to a net unrealized loss. 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 General Account investment portfolio consists largely of investment grade fixed maturities, short-term investments, commercial, agricultural and residential mortgage loans, 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, agency and non-agency mortgage-backed securities and asset-backed securities. In addition, from time to time we use derivatives to hedge our exposure to equity markets, interest rates, foreign currency and credit spreads.
We incorporate ESG factors into the investment processes for a significant portion of our General Account portfolio. As investors with a long-term horizon, we believe that companies with sustainable practices are better positioned to deliver value to stakeholders over an extended period. 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 and quality of our investment portfolio.
Investments in our surplus portfolio are generally comprised of a mix of fixed maturity investment grade and below investment grade securities as well as various alternative investments, primarily private equity and real estate equity. Although alternative investments are subject to period over period earnings fluctuations, they have historically achieved returns in excess of the fixed maturity portfolio.
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The General Account investment portfolio reflects certain differences from the presentation of the U.S. GAAP Consolidated Financial Statements. This presentation is consistent with how we manage the General Account investment portfolio. For further investment information, see Note 3 and Note 4 of the Notes to the Consolidated Financial Statements.
Investment Results of the General Account Investment Portfolio
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 June 30,
2026 2025
Yield Amount (2) Yield Amount (2)
(Dollars in millions)
Fixed Maturities:
Income (loss) 4.61 % $ 974 4.35 % $ 931
Ending assets 85,753 86,509
Mortgages:
Income (loss) 5.38 % 322 4.87 % 256
Ending assets 24,848 21,536
Other Equity Investments: (1)
Income (loss) 4.41 % 38 5.28 % 47
Ending assets 3,506 3,571
Trading Securities:
Income (loss) 5.92 % 13 12.80 % 21
Ending assets 909 723
Policy Loans:
Income (loss) 4.73 % 22 4.79 % 52
Ending assets 1,846 4,355
Cash and Short-term Investments:
Income (loss) 3.14 % 85 4.22 % 86
Ending assets 13,958 12,239
Total:
Investment income (loss) 4.64 % 1,454 4.52 % 1,393
Less: investment fees (3) (0.19) % (59) (0.16) % (49)
Investment Income, Net 4.45 % 1,395 4.36 % 1,344
Ending Net Assets $ 130,820 $ 128,933
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Six Months Ended June 30, Year Ended December 31
2026 2025 2025
Yield Amount (2) Yield Amount (2) Yield Amount (2)
(Dollars in millions)
Fixed Maturities:
Income (loss) 4.61 % $ 1,922 4.37 % $ 1,859 4.41 % $ 3,693
Ending assets 85,753 86,509 81,816
Mortgages:
Income (loss) 5.33 % 621 4.99 % 516 4.96 % 1,061
Ending assets 24,848 21,536 22,718
Other Equity Investments: (1)
Income (loss) 3.82 % 67 5.75 % 101 5.22 % 185
Ending assets 3,506 3,571 3,519
Trading Securities:
Income (loss) 6.00 % 25 9.47 % 29 5.80 % 42
Ending assets 909 723 804
Policy Loans:
Income (loss) 4.93 % 46 4.93 % 107 4.57 % 168
Ending assets 1,846 4,355 1,862
Cash and Short-term Investments:
Income (loss) 3.14 % 151 4.26 % 126 3.94 % 323
Ending assets 13,958 12,239 9,103
Total:
Investment income (loss) 4.62 % 2,832 4.56 % 2,738 4.51 % 5,472
Less: investment fees (0.18) % (112) (0.16) % (97) (0.16) % (199)
Investment Income, Net 4.44 % 2,720 4.40 % 2,641 4.35 % 5,273
Ending Net Assets $ 130,820 $ 128,933 $ 119,822
_____________
(1)Includes, as of June 30, 2026, June 30, 2025 and December 31, 2025 respectively, $438 million, $364 million and $439 million of other invested assets. Amounts for certain consolidated VIE investments are shown net of associated non-controlling interest.
(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.
AFS 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 below investment grade securities in the General Account investment portfolio consist of loans to middle market companies, public high-yield securities, bank loans, as well as “fallen angels,” originally purchased as investment grade investments.
AFS Fixed Maturities by Industry
The following table sets forth these fixed maturities by industry category along with their associated gross unrealized gains and losses:
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AFS Fixed Maturities by Industry (1)
Amortized Cost Allowance for Credit Losses Gross Unrealized Gains Gross Unrealized Losses Fair Value Percentage of Total (%)
(Dollars in millions)
As of June 30, 2026
Corporate Securities:
Finance $ 16,033 $ — $ 87 $ 988 $ 15,132 19 %
Manufacturing 10,210 — 62 1,086 9,186 11
Utilities 8,082 — 51 701 7,432 9
Services 7,208 7 57 774 6,484 8
Energy 2,633 — 19 213 2,439 3
Retail and wholesale 3,100 — 31 274 2,857 4
Transportation 2,240 — 30 187 2,083 3
Other 515 — 8 52 471 1
Total corporate securities 50,021 7 345 4,275 46,084 58
U.S. government 5,308 — 1 1,373 3,936 5
Residential mortgage-backed (2) 7,782 — 49 127 7,704 9
Preferred stock 54 — 3 — 57 —
State & political 374 — 1 70 305 —
Foreign governments 510 — 1 75 436 1
Commercial mortgage-backed 4,789 — 11 264 4,536 6
Asset-backed securities (3) 16,915 — 57 95 16,877 21
Total $ 85,753 $ 7 $ 468 $ 6,279 $ 79,935 100 %
As of December 31, 2025
Corporate Securities:
Finance (4) $ 14,676 $ — $ 172 $ 902 $ 13,946 18 %
Manufacturing (4) 9,904 — 129 1,041 8,992 12
Utilities 7,873 — 102 656 7,319 10
Services (4) 7,328 — 123 728 6,723 9
Energy 2,373 — 32 207 2,198 3
Retail and wholesale 3,047 — 51 262 2,836 3
Transportation 2,162 — 46 185 2,023 3
Other 376 — 2 29 349 —
Total corporate securities 47,739 — 657 4,010 44,386 58
U.S. government 5,040 — 1 1,304 3,737 5
Residential mortgage-backed (2) 7,093 — 85 92 7,086 9
Preferred stock 54 — 4 — 58 —
State & political 378 — 3 71 310 —
Foreign governments 556 — 3 77 482 1
Commercial mortgage-backed 4,814 — 26 250 4,590 6
Asset-backed securities (3) (4) 16,142 — 126 46 16,222 21
Total $ 81,816 $ — $ 905 $ 5,850 $ 76,871 100 %
______________
(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.
(3)Includes credit-tranched securities collateralized by sub-prime mortgages, credit risk transfer securities and other asset types.
(4)Prior period amounts have been revised to improve comparability.
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Fixed Maturities Credit Quality
The SVO of the NAIC evaluates the investments of insurers for regulatory reporting purposes and assigns fixed maturities 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 Designation is based on the expected ratings indicated by internal analysis.
The following table sets forth the General Account’s fixed maturities portfolio by NAIC rating:
AFS Fixed Maturities
NAIC Designation Rating Agency Equivalent AmortizedCost Allowance for Credit Losses GrossUnrealizedGains GrossUnrealizedLosses Fair Value
(in millions)
As of June 30, 2026
1................................ Aaa, Aa, A $ 60,311 $ — $ 246 $ 4,267 $ 56,290
2................................ Baa 24,079 — 215 1,950 22,344
Investment grade 84,390 — 461 6,217 78,634
3................................ Ba 542 1 1 30 512
4................................ B 602 2 1 15 586
5................................ Caa 167 4 4 13 154
6................................ Ca, C 52 — 1 4 49
Below investment grade 1,363 7 7 62 1,301
Total Fixed Maturities $ 85,753 $ 7 $ 468 $ 6,279 $ 79,935
As of December 31, 2025:
1................................ Aaa, Aa, A $ 56,880 $ — $ 513 $ 3,896 $ 53,497
2................................ Baa 23,488 — 380 1,884 21,984
Investment grade 80,368 — 893 5,780 75,481
3................................ Ba 554 — 2 32 524
4................................ B 622 — 5 12 615
5................................ Caa 248 — 5 23 230
6................................ Ca, C 24 — — 3 21
Below investment grade 1,448 — 12 70 1,390
Total Fixed Maturities $ 81,816 $ — $ 905 $ 5,850 $ 76,871
Mortgage Loans
The mortgage portfolio primarily consists of commercial, agricultural, and residential mortgage loans. The investment strategy for the mortgage loan portfolio emphasizes diversification by property type and geographic location with a primary focus on asset quality. The commercial mortgage loan portfolio is backed by high quality properties located in primary markets typically owned by experienced institutional investors with a demonstrated ability to manage their assets through business cycles. Our commercial loan portfolio is monitored on an ongoing basis, assigning credit quality ratings for each loan, with particular emphasis on loans that are scheduled to mature in the next 12 months. Scheduled maturities for the remainder of 2026 are $2.7 billion and 16% of the commercial mortgage portfolio. The commercial mortgage portfolio consists of 75% fixed rate loans and 25% floating rate loans. For floating rate loans, the borrower is typically required to purchase an interest rate cap to the scheduled maturity of the loan to protect against rising rates.
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Commercial mortgage loans are evaluated annually to determine a current LTV ratio. Property financial statements, current rent roll, lease maturities, tenant creditworthiness, property physical inspections, and forecasted leasing market strength are used to develop projected cash flows. A discounted cash flow methodology which incorporates market data is used to determine property values. The average LTV ratio at origination provided by a certified appraisal firm was 55%. The average LTV ratio was 67% and 66% at June 30, 2026 and December 31, 2025, respectively, which reflects the most recent opinion of value on the underlying collateral.
We use AB CarVal to invest in residential whole loans and other private investments. These investments allow us to leverage AB CarVal’s expertise in asset classes where we are looking to increase exposure. The residential mortgage portfolio primarily consists of purchased closed end, amortizing residential mortgage loans. The investment strategy for the residential mortgage loan portfolio emphasizes high credit quality borrowers, conservative LTV ratios, superior ability to repay and geographic diversification.
Residential mortgage loans are pooled by loan type (i.e., Jumbo, Agency Eligible, Non-Qualified, etc.) and pooled by similar risk profiles (including consumer credit score and LTV ratios). The portfolio is monitored monthly primarily based on payment activity, occurrence of regional natural disasters and borrower interactions with the mortgage servicer.
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. Mortgage loans carried at fair value using the fair value option of $71 million as of June 30, 2026, are excluded from the below tables.
Mortgage Loans by Region and Property Type
June 30, 2026 December 31, 2025
Amortized Cost % of Total Amortized Cost % of Total
(Dollars in millions)
By Region:
U.S. Regions:
Pacific $ 6,385 25 % $ 5,781 25 %
Middle Atlantic 4,718 19 4,844 21
South Atlantic 4,115 16 3,529 16
East North Central 1,205 5 1,245 5
Mountain 2,269 9 1,865 8
West North Central 880 3 940 4
West South Central 2,187 9 2,007 9
New England 932 4 826 4
East South Central 1,141 5 950 4
Total U.S. 23,832 95 21,987 96
Other Regions:
Europe 1,285 5 994 4
Total Other 1,285 5 994 4
Total Mortgage Loans $ 25,117 100 % $ 22,981 100 %
By Property Type:
Office $ 4,687 19 % $ 4,686 20 %
Multifamily 8,879 35 8,629 38
Agricultural loans 2,683 11 2,650 12
Retail 671 3 673 3
Industrial 2,315 9 2,523 11
Hospitality 826 3 781 3
Residential 3,722 15 1,946 8
Other 1,334 5 1,093 5
Total Mortgage Loans $ 25,117 100 % $ 22,981 100 %
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Private Credit
We invest in an array of private credit strategies, including private placements, private ABS, and direct lending. At June 30, 2026 and December 31, 2025, the amortized cost of these investments was $21.7 billion and $18.3 billion, respectively.
Private Credit Investments
June 30, 2026 December 31, 2025
Amortized Cost % Amortized Cost %
(in millions)
Private placements (1) $ 14,908 69 % $ 13,292 72 %
Private ABS 6,116 28 4,338 24
Direct middle market loans 663 3 666 4
Total $ 21,687 100 % $ 18,296 100 %
_____________
(1)Private placements primarily include investment‑grade corporate and infrastructure debt.
June 30, 2026 December 31, 2025
Amortized Cost % Amortized Cost %
(in millions)
Investment grade $ 20,764 96 % $ 17,449 95 %
Below investment grade 923 4 847 5
Total $ 21,687 100 % $ 18,296 100 %
Other Equity Assets
The following table includes information related to our alternative investments in certain other equity investments and consolidated VIEs, including private equity funds, real estate funds and other alternative investments. These investments are typically structured as limited partnerships or LLCs and are reported to us on a lag of one month and three months for hedge funds and private equity funds, respectively.
At June 30, 2026 and December 31, 2025, the fair value of alternative investments was $3.2 billion and $3.2 billion, respectively. Alternative investments were 2.2% and 2.4% of cash and invested assets at June 30, 2026 and December 31, 2025, respectively.
Alternative Investments (1)
June 30, 2026 December 31, 2025
Fair Value % Fair Value %
(in millions)
Private Equity $ 1,662 52 % $ 1,677 52 %
Private Debt 316 10 307 10
Infrastructure 159 5 204 6
Real Estate 687 22 674 21
Hedge Funds 65 2 64 2
Other (2) 302 9 272 9
Total (3) $ 3,191 100 % $ 3,198 100 %
_____________
(1)Reported in Other Equity Investments in the consolidated balance sheets.
(2)Includes CLO equity, co-investments and investments in other strategies. CLO equity investments are consolidated and assets are reported in Fixed Maturities, at fair value using the fair value option in the consolidated balance sheets.
(3)Includes $967 million and $993 million of non-General Account assets as of June 30, 2026 and December 31, 2025, respectively.
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Liquidity and Capital 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, we 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, Asset Management, and Wealth Management segments; the insurance businesses reported in Corporate and Other are managed with the Retirement segment.
On September 9, 2025, Holdings’ Board approved an additional $500 million under Holdings’ share repurchase program. The repurchase program does not obligate Holdings to purchase any particular number of shares. On February 11, 2026, Holdings’ Board approved an additional $1.0 billion share repurchase program. As of June 30, 2026, Holdings had authorized capacity of approximately $1.5 billion remaining in its share repurchase program. See Note 13 of the Notes to the Consolidated Financial Statements for additional details on the repurchase program.
Sources and Uses of Liquidity
The Company has sufficient cash flows from operations to satisfy liquidity requirements in 2026.
Cash Flows of Holdings
As a holding company with no business operations of its own, Holdings primarily derives cash flows from dividends from its subsidiaries and distributions related to its economic interest in AB, all of which is currently held outside our insurance company 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 may include stock repurchases) loans and capital contributions, if needed, to our insurance subsidiaries. Our principal sources of liquidity and our capital position are described in the following paragraphs.
Sources and Uses of Holding Company Highly Liquid Assets
The following table sets forth Holdings’ principal sources and uses of highly liquid assets:
Six Months Ended June 30,
2026 2025
(in millions)
Highly Liquid Assets, beginning of period $ 1,239 $ 1,982
Dividends from subsidiaries 424 327
Capital contributions to subsidiaries — —
M&A Activity — —
Purchase of AllianceBernstein Units — (758)
Total Business Capital Activity 424 (431)
Purchase of treasury shares (513) (497)
Shareholder dividends paid (159) (156)
Total Share Repurchases, Dividends and Acquisition Activity (672) (653)
Issuance/(redemption) of preferred stock — (279)
Preferred stock dividend (27) (32)
Total Preferred Stock Activity (27) (311)
Issuance of long-term debt — 500
Repayment of long-term debt — —
Total External Debt Activity — 500
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Six Months Ended June 30,
2026 2025
(in millions)
Repayments of loans from affiliates (675) —
Proceeds from loans from affiliates 600 —
Net decrease (increase) in existing facilities to affiliates (1) 230 60
Total Affiliated Debt Activity 155 60
Interest paid on external debt and P-Caps (113) (106)
Others, net 124 (15)
Total Other Activity 11 (121)
Net increase (decrease) in highly liquid assets (109) (956)
Highly Liquid Assets, end of period $ 1,130 $ 1,026
_______________
(1) Represents net activity of draws and repayments of existing credit facilities between Holdings and affiliates.
Capital Contribution to Our Subsidiaries
Holdings did not make any capital contributions to its subsidiaries during the six months ended June 30, 2026.
Loans from Our Subsidiaries
In March 2026, Equitable America made a $600 million five-year loan to Holdings with an interest rate of 4.40% which matures in March 2031. In March 2026, Holdings also made a $600 million partial repayment on the $1.0 billion loan due June 2031 from Equitable Financial. In April 2026, Holdings made an additional $75 million partial repayment on the $1.0 billion loan due June 2031 from Equitable Financial.
Cash Distributions from Our Non-Insurance Subsidiaries
During the six months ended June 30, 2026, Holdings received cash distributions of $336 million from AB and $88 million from the investment management contracts with EFIM and EIM.
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.
Equitable’s primary insurance regulators in the U.S are the NYDFS and the Arizona Department of Insurance and Financial Institutions. Under New York’s insurance laws, which are applicable to Equitable Financial, a domestic stock life insurer may not pay an Ordinary Dividend exceeding an amount calculated based on a statutory formula without prior approval of the NYDFS. Extraordinary Dividends 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. Similarly, under Arizona insurance law, which is applicable to Equitable America, a domestic life insurer may not pay a dividend to its shareholders that exceeds an amount calculated based on a statutory formula without prior approval of the Arizona Department of Insurance and Financial Institutions.
In 2025, Equitable America had Ordinary Dividend capacity of $347 million. In June 2025, Equitable America received approval from the Arizona Department of Insurance and Financial Institutions for an Extraordinary Dividend of $1.7 billion. During 2025 Holdings received dividend distributions from Equitable America of $1.5 billion under the Extraordinary Dividend capacity. In 2026, Equitable America estimates it will have Ordinary Dividend capacity of $408 million.
Based on the NYDFS formula, Equitable Financial had no Ordinary Dividend capacity in 2025 and 2026.
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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 is 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 AB Holding Units pro rata in accordance with their percentage interest 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.
As of June 30, 2026, Holdings and its non-insurance company subsidiaries hold approximately 199.3 million AB Units, 0.1 million AB Holding Units and the 1% General Partnership interest in ABLP.
As of June 30, 2026, the ownership structure of ABLP, including AB Units outstanding as well as the General Partner’s 1% interest, was as follows:
Owner Percentage Ownership
EQH and its subsidiaries 68.1 %
AB Holding 31.3
Unaffiliated holders 0.6
Total 100.0 %
Including both the general partnership and limited partnership interests in AB Holding and ABLP, Holdings and its subsidiaries had an approximate 68.1% economic interest in AB as of June 30, 2026.
Holdings Credit Facilities
On July 29, 2025, Holdings entered into a new Revolving Credit Agreement with respect to a $1.0 billion five-year senior unsecured revolving credit facility (the “Credit Facility”), and terminated the Amended and Restated Revolving Credit Agreement, dated as of June 24, 2021, as amended.
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 $525 million (the “LOC Facilities”), primarily to be used to support our life insurance business reinsured to EQ AZ Life Re in April 2018. As of June 30, 2026, $445 million was outstanding under the LOC Facilities. In August 2025 Holdings entered into amendments with two of the issuers of its bilateral letter of credit facilities to effect changes in terms similar to the provisions of the Credit Facility and in one instance add two years of extension options. In August 2025 the Company also terminated six of its bilateral letter of credit facilities with different counterparties.
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 certain indebtedness that may be incurred by our subsidiaries and the dollar amount of certain secured indebtedness that may be incurred by us, which could
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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 June 30, 2026, we were in compliance with the covenants under the Credit Facility and LOC Facilities.
Contingent Funding Arrangements
For information regarding activity pertaining to our contingent funding arrangements and other off-balance sheet commitments, see “Commitments and Contingent Liabilities” in Note 15 of the Notes to the Consolidated Financial Statements.
Series A Preferred Stock and Series C Preferred Stock
For information pertaining to our Series A Preferred Stock and Series C Preferred Stock see Note 13 of the Notes to the Consolidated Financial Statements.
Capital Position of 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 capital 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.
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.
Dividends Declared and Paid
The declaration and payment of future dividends is subject to the discretion of our Board 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 on our common stock will be substantially restricted in the event that we do not declare and pay (or set aside) dividends on the Series A and the Series C Preferred Stock for the last proceeding dividend period. For additional information on our preferred stock, see “—Series A Preferred Stock and Series C Preferred Stock”.
For information regarding activity pertaining to common and preferred dividends declared and paid, see Note 13 of the Notes to the Consolidated Financial Statements.
Share Repurchase Programs
For information regarding activity pertaining to share repurchase programs, see Note 13 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 can meet payment obligations linked to our 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 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
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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 HTM 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 Portfolio” and Note 3 and Note 4 of the Notes to the Consolidated Financial Statements for a description of our portfolio of liquid assets.
Hedging Activities
Because the future claims exposure on our insurance products, and in particular our variable annuity 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 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 represent one of our biggest drivers for liquidity needs for our insurance subsidiaries.
FHLB Membership
Equitable Financial and Equitable America are members of the FHLB, which provides access to collateralized borrowings and other FHLB products.
See Note 15 of the Notes to the Consolidated Financial Statements for further description of our FHLB program.
FABN
Under the FABN program, Equitable Financial and Equitable America may issue funding agreements in U.S. dollars or other foreign currencies.
See Note 15 of the Notes to the Consolidated Financial Statements for further description of our FABN program.
FABCP
Under the FABCP program, Equitable Financial and Equitable America may issue funding agreements in U.S. dollars to a SPLLC.
See Note 15 of the Notes to the Consolidated Financial Statements for further description of our FABCP program.
Farmer Mac
Under the Farmer Mac program, Equitable Financial may enter into collateralized funding agreements.
See Note 15 of the Notes to the Consolidated Financial Statements for further description of our Farmer Mac program.
Sources and Uses of Liquidity of our Asset Management Segment
The principal sources of liquidity for our Asset Management business include investment management fees and borrowings under its credit facilities 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
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primary liquidity risk for our fee-based Asset Management business is its profitability, which is impacted by market conditions and our investment management performance.
AB Commercial Paper
As of June 30, 2026 and December 31, 2025, AB had $0 million of 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 six months ended June 30, 2026, and full year 2025 were $188 million and $200 million, respectively, with weighted average interest rates of approximately 3.8% and 4.4%, respectively.
AB Credit Facility
AB has an $800 million committed, unsecured senior revolving credit facility (the “AB Credit Facility”) with a group of commercial banks and other lenders. The Credit Facility has a maturity date of August 5, 2030. The credit facility provides for possible increases in the principal amount by up to an aggregate incremental amount of $200 million. Any such increase is subject to the consent of the affected lenders. The AB Credit Facility is available for AB business purposes, including the support of AB’s commercial paper program. AB can draw directly under the AB Credit Facility and AB management expects to draw on the AB Credit Facility from time to time.
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 June 30, 2026, 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 pre-payments and commitment reductions requested by AB are permitted at any time without a fee (other than customary breakage costs relating to the pre-payment 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 rate equal to an applicable margin, which is subject to adjustment based on the credit ratings of AB, plus one of the following indices: a term SOFR; a Prime rate; or the Federal Funds rate.
As of June 30, 2026 and December 31, 2025, AB had no amounts outstanding under the AB Credit Facility. During the six months ended June 30, 2026 and full year 2025, AB and SCB LLC did not draw upon the AB Credit Facility.
SCB LLC had three uncommitted lines of credit with three financial institutions, two of these lines of credit allowed SCB LLC up to an aggregate of $150 million. One of those lines of credit was terminated March 20, 2026. As of June 30, 2026 SCB LLC has two uncommitted lines of credit with two financial institutions. One of these lines of credit permits SCB LLC to borrow up to an aggregate of approximately $100 million, with AB named as an additional borrower, while the other has no stated limit. AB has agreed to guarantee the obligations on SCB LLC under these lines of credit. As of June 30, 2026 and December 31, 2025, SCB LLC had no outstanding balance on these lines of credit. Average daily borrowings during the six months ended June 30, 2026 and the full year 2025, were $1 million and $1 million with weighted average interest rates of approximately 6.8% and 7.3%, respectively.
EQH Facility
AB has a $900 million committed, unsecured senior credit facility (the “EQH Facility”). The EQH Facility matures on August 31, 2029. The EQH Facility 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. As of June 30, 2026, AB was in compliance with these covenants. 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.
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Amounts under the EQH Facility may be borrowed, repaid and re-borrowed by AB from time 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 change of control of AB’s General Partner.
As of June 30, 2026 and December 31, 2025, AB had $580 million and $810 million outstanding under the EQH Facility, with interest rates of approximately 3.7% and 3.7%, respectively. Average daily borrowing of the EQH Facility during the first six months of 2026 and full year 2025 were $509 million and $392 million, respectively, with weighted average interest rates of approximately 3.6% and 4.2%, respectively.
EQH Uncommitted Facility
In addition to the EQH Facility, AB has a $300 million uncommitted, unsecured senior credit facility (the “EQH Uncommitted Facility”) with EQH. The EQH Uncommitted Facility matures on August 31, 2029 and is available for AB’s general business purposes. Borrowings under the EQH Uncommitted Facility bear interest generally at a rate per annum based on prevailing overnight commercial paper rates. The EQH Uncommitted Facility contains affirmative, negative and financial covenants, which are substantially similar to those in the EQH Facility. As of June 30, 2026, AB was in compliance with these covenants.
As of June 30, 2026 and December 31, 2025, AB had no amounts outstanding under the EQH Uncommitted Facility. During the first six months of 2026 and full year 2025, AB did not draw upon the EQH Uncommitted Facility.
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 TAC does not meet or exceed certain RBC levels. At the date of the most recent annual statutory financial statements filed with insurance regulators, the TAC of each of these insurance company subsidiaries subject to these requirements was in excess of each of those RBC levels.
See Note 17 of the Notes to the Consolidated Financial Statements for additional information relating to Prescribed and Permitted Accounting Practices and their impact on our statutory surplus.
Captive Reinsurance Companies
We use captive reinsurance companies 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 assume business from affiliates only and are closed to new business. Our captive reinsurance companies are wholly-owned subsidiaries located in the United States. In addition to state insurance regulation, our captive reinsurance companies are subject to internal policies governing their activities. We continue to analyze the use of our existing captive reinsurance structure, as well as additional third-party reinsurance arrangements.
Borrowings
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.
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The following table sets forth the Company’s total consolidated borrowings. Short-term and long-term debt consists of the following:
June 30, 2026 December 31, 2025
(in millions)
Short-term debt:
CLO Short-term debt (4.91%) (1) — 25
Total short-term debt $ — $ 25
Long-term debt:
Senior Debenture (7.00%, due 2028) 250 250
Senior Note (4.35%, due 2028) 996 995
Senior Note (4.57%, due 2029) 310 307
Senior Note (5.59%, due 2033) 498 498
Senior Note (5.00%, due 2048) 1,290 1,290
Junior Sub Debt Securities due 2055 495 495
Total long-term debt 3,839 3,835
Total short and long-term debt $ 3,839 $ 3,860
Notes and Debentures
The Senior Notes and Senior Debentures contain customary affirmative and negative covenants, including a limitation on certain liens and a limit on the Company’s ability to consolidate, merge or sell or otherwise dispose of all 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 accelerated. As of June 30, 2026, the Company is in compliance with all 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.
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 Moody’s
Last review date Mar '26 Mar '26 Mar '26
Financial Strength Ratings:
Equitable Financial Life Insurance Company A A+ A1
Equitable Financial Life Insurance Company of America A A+ A1
Credit Ratings:
Equitable Holdings, Inc. bbb+ A- Baa1
Last review date Oct' 25 Mar '25
AllianceBernstein L.P. A A2
Material Cash Requirement
Our material cash requirements include policyholder obligations, long-term debt, commercial paper, EB, operating leases and various funding commitments. See “Material Cash Requirements” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2025 Form 10-K for additional information.
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Summary of Critical Accounting Estimates
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 the Notes to the Consolidated Financial Statements. The most critical estimates include those used in determining:
•MRBs and purchased MRBs;
•accounting for reinsurance;
•estimated fair values of investments in the absence of quoted market values and investment impairments;
•estimated fair values of freestanding derivatives;
•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.