Equitable Holdings, Inc. - Annual Report: 2019 (Form 10-K)

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•	“AB” or “AllianceBernstein” means AB Holding and ABLP.

•	“AB Holding” means AllianceBernstein Holding L.P., a Delaware limited partnership.

•	“AB Holding Units” means units representing assignments of beneficial ownership of limited partnership interests in AB Holding.

•	“AB Units” means units of limited partnership interests in ABLP.

•	“ABLP” means AllianceBernstein L.P., a Delaware limited partnership and the operating partnership for the AB business.

•	“ACS Life” means AXA Corporate Solutions Life Reinsurance Company, a Delaware corporation and a wholly-owned direct subsidiary of Holdings.

•	“AEFS” means AXA Equitable Financial Services, LLC, a Delaware corporation and a wholly-owned direct subsidiary of Holdings.

•	“AXA” means AXA S.A., a société anonyme organized under the laws of France, and formerly our controlling stockholder.

•	“AXA Financial” means AXA Financial, Inc., a Delaware corporation and a former wholly-owned direct subsidiary of Holdings. On October 1, 2018, AXA Financial merged with and into Holdings, with Holdings assuming the obligations of AXA Financial.

•	“AXA Tech” means AXA Technology Services America, Inc, formerly a Delaware corporation and wholly-owned subsidiary of Holdings which merged into Holdings in November 2019.

•	“CS Life RE” means CS Life RE Company, an Arizona corporation and a wholly-owned indirect subsidiary of Holdings.

•	“Equitable Advisors” means AXA Advisors, LLC, a Delaware limited liability company, our retail broker/dealer for our retirement and protection businesses and a wholly-owned indirect subsidiary of Holdings.

•	“Equitable America” means Equitable Financial Life Insurance Company of America (f/k/a MONY Life Insurance Company of America), an Arizona corporation and a wholly-owned indirect subsidiary of Holdings.

•	“Equitable Distributors” means AXA Distributors, LLC, a Delaware limited liability company, our wholesale broker/dealer for our retirement and protection businesses and a wholly-owned indirect subsidiary of Holdings.

•	“Equitable FMG” means AXA Equitable Funds Management Group, LLC, a Delaware limited liability company and a wholly-owned indirect subsidiary of Holdings.

•	“Equitable L&A” means AXA Equitable Life and Annuity Company, a Colorado corporation and a wholly-owned indirect subsidiary of Holdings.

•	“Equitable Life” means AXA Equitable Life Insurance Company, a New York corporation, a life insurance company and a wholly-owned subsidiary of AEFS.

•	“Equitable Network” means AXA Network, LLC, a Delaware limited liability company and wholly-owned indirect subsidiary of Holdings and its subsidiary, AXA Network of Puerto Rico, Inc.

•	“Equitable Premier VIP Trust” means AXA Premier VIP Trust, a series trust that is a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”), as an open-end management investment company.

•	“EQAT” means EQ Advisors Trust, a series trust that is a Delaware statutory trust and is registered under the Investment Company Act as an open-end management investment company.

•	“EQ AZ Life Re” means EQ AZ Life Re Company, an Arizona corporation and a wholly-owned indirect subsidiary of Holdings.

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•	The “General Partner” means AllianceBernstein Corporation, a Delaware corporation and the general partner of AB Holding and ABLP.

•	“SCB LLC” means Sanford C. Bernstein & Co., LLC, a registered investment adviser and broker-dealer.

•	“USFL” means U.S. Financial Life Insurance Company, an Ohio corporation and a wholly-owned indirect subsidiary of Holdings.

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•	Advice and solutions for helping Americans set and meet their retirement goals and protect and transfer their wealth across generations; and

•	A wide range of investment management insights, expertise and innovations to drive better investment decisions and outcomes for clients and institutional investors worldwide.

•	Our affiliated retail sales force, Equitable Advisors, which has over 4,500 licensed financial professionals who advise on retirement, protection and investment advisory solutions; and

•	More than 200 Bernstein Financial Advisors, who are responsible for the sale of investment products and solutions to Private Wealth Management clients.

•	Distribution agreements with more than 1,000 third-party firms including broker-dealers, banks, insurance partners and brokerage general agencies, giving us access to more than 150,000 financial professionals to market our retirement, protection and investment solutions; and

•	An AB global distribution team of more than 500 professionals, who engage with our approximately 5,000 retail distribution partners and more than 500 institutional clients.

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(1)

We own an approximate 65% economic interest in AB. Our interests in AB are held through various wholly-owned subsidiaries, our economic interest consists of approximately 63% of the AB Units, approximately 4% of the AB Holding Units (representing an approximate 1% economic interest in ABLP), and 1% of the AB Units held by the GP. Our indirect, wholly-owned subsidiary, AllianceBernstein Corporation, is the General Partner of AB with the authority to manage and control AB, and accordingly, AB is consolidated in our financial statements. AB has been in the investment management and research business for more than 50 years. ABLP is the operating partnership for the AB business, and AB Holding’s activities consist of owning AB Units and engaging in related activities. AB Holding Units trade on the NYSE under the ticker symbol “AB”. AB Units do not trade publicly.

•	Individual Retirement—We are a leading provider of variable annuity products, which primarily meet the needs of individuals saving for retirement or seeking retirement income by allowing them to invest in various markets through underlying investment options.

•	Group Retirement—We offer tax-deferred investment and retirement services or products to plans sponsored by educational entities, municipalities and not-for-profit entities, as well as small and medium-sized businesses.

•	Investment Management and Research—We are a leading provider of diversified investment management, research and related services to a broad range of clients around the world.

•	Protection Solutions—We focus our life insurance products on attractive protection segments such as variable universal life (“VUL”) insurance and indexed universal life (“IUL”) insurance and our employee benefits business on small and medium-sized businesses.

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Structured Capital Strategies (“SCS”). Our index-linked variable annuity product allows the policyholder to invest in various investment options, whose performance is tied to one or more securities indices, commodities indices or exchange traded funds (“ETF”), subject to a performance cap, over a set period of time. The risks associated with such investment options are borne entirely by the policyholder, except the portion of any negative performance that we absorb (a buffer) upon investment maturity. This variable annuity does not offer GMxB features, other than an optional return of premium death benefit that we have introduced on some versions.

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Retirement Cornerstone. Our Retirement Cornerstone product offers two platforms: (i) RC Performance, which offers access to a broad selection of funds with annuitization benefits based solely on non-guaranteed account investment performance and (ii) RC Protection, which offers access to a focused selection of funds and an optional floating-rate GMxB feature providing guaranteed income for life, with a choice between two floating roll-up rate options.

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Investment Edge. Our investment-only variable annuity is a wealth accumulation variable annuity that defers current taxes during accumulation and provides tax-efficient distributions on non-qualified assets through scheduled payments over a set period of time with a portion of each payment being a return of cost basis, thus excludable from taxes. Investment Edge does not offer any GMxB feature other than an optional return of premium death benefit.

•	Other products. We offer other products which offer optional GMxB benefits. These other products do not contribute significantly to our sales.

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•	The benefit base is defined to exclude the effects of a decline in the market value of the policyholder’s AV. Accordingly, actual claim payments to be made in the future to the policyholder will be determined without giving effect to market declines.

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•	The terms of the benefit base may allow it to increase at a guaranteed rate irrespective of the rate of return on the policyholder’s AV.

•	GMDBs provide that in the event of the death of the policyholder, the beneficiary will receive the higher of the current contract account balance or the benefit base upon the death of the owner (or annuitant).

•	GMIBs provide, if elected by the policyholder after a stipulated waiting period from contract issuance, guaranteed minimum annual lifetime payments based on predetermined guaranteed annuity purchase factors that may exceed what the contract AV can purchase at then-current annuity purchase rates.

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•	we primarily offer floating (tied to interest rates), as opposed to fixed, roll-up rates;

•	we offer lower risk investment options, including passive investments and bond funds with reduced credit risk if certain optional guaranteed benefits are elected; and

•	we offer managed volatility funds, which seek to reduce the risk of large, sudden declines in AV during market downturns by managing the volatility or draw-down risk of the underlying fund holdings through re-balancing the fund holdings within certain guidelines or overlaying hedging strategies at the fund level.

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•	Return of Premium Death Benefit. This death benefit pays the greater of the AV at the time of a claim following the owner’s death or the total contributions to the contract (subject to adjustment for withdrawals). The charge for this benefit is usually included in the Mortality & Expense charge that is deducted daily from the net assets in each variable investment option.

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RMD Wealthguard Death Benefit. This death benefit features a benefit base that does not decrease by the amount of any IRS-mandated withdrawals, or “required minimum distributions” (“RMD”), from the contract. The benefit base automatically increases to equal the highest AV on the current or any prior contract anniversary until RMD withdrawals begin or until the owner reaches a specified maximum age, even if the AV is reduced by negative investment performance. The charges for this benefit are calculated based on the benefit base value and deducted annually from the AV.

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Annual Ratchet (also referred to as Highest Anniversary Value). This death benefit features a benefit base that is reset each year to equal the higher of total contributions to the contract or the highest AV on the current or any prior contract anniversary (subject to adjustment for withdrawals), even if the AV is reduced by negative investment performance. The charge for this benefit is calculated based on the benefit base value and deducted annually from the AV.

•	Roll-up Death Benefit. This death benefit features a benefit base that increases (or “rolls up”) at a specified guaranteed annual rate (subject to adjustment for withdrawals), even if the AV is reduced by negative investment performance. The charge for this benefit is calculated based on the benefit base value and deducted annually from the AV. This GMxB feature was discontinued in 2003.

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Greater of Roll-up or Annual Ratchet. This death benefit features a benefit base that increases each year to equal the higher of the initial benefit base accumulated at a specified guaranteed rate or the highest AV on the current or any prior contract anniversary (subject to adjustment for withdrawals), even if the AV is reduced by negative investment performance. The charge for this benefit is calculated based on the benefit base value and deducted annually from the AV.

•	GWBL Standard Death Benefit. This death benefit features a benefit base that is equal to total contributions to the contract less a deduction reflecting the amount of any withdrawals made.

•	GWBL Enhanced Death Benefit. This death benefit features a benefit base that is equal to total contributions to the contract plus the amounts of any ratchets and deferral bonus, less a deduction reflecting the amount of any withdrawals made. This benefit was available for an additional fee.

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(1)	See table summarizing the NAR and reserves of policyholders by type of GMxB feature for variable annuity contracts as of December 31, 2019, 2018 and 2017 under “—Net Amount at Risk.”

(2)	All Other includes individual variable annuity policies with Annual Ratchet or Roll-up GMDB, either stand-alone or in conjunction with a GMLB, or with ROP GMDB in conjunction with a GMLB.

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GMIB. GMIB is our largest block of living benefit guarantees based on in-force AV. Policyholders who purchase the GMIB rider will be eligible, at the end of a defined waiting period, to receive annuity payments for life that will never be less than a guaranteed minimum amount, regardless of the performance of their investment options prior to the first payment. During this waiting period, which is often referred to as the accumulation phase of the contract, policyholders can invest their contributions in a range of variable and guaranteed investment options to grow their AV on a tax-deferred basis while increasing the value of the GMIB benefit base that helps determine the minimum annuity payment amount. Policyholders may elect to continue the accumulation phase beyond the waiting period if they wish to maintain the ability to take withdrawals from their AV or continue to participate in the growth of both their AV and GMIB benefit base.

•	GWBL. This benefit guarantees that a policyholder can take lifetime withdrawals from their contract up to a maximum amount per year without reducing their GWBL benefit base. The amount of each guaranteed annual withdrawal is

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GMWB. This benefit guarantees that the policyholder can take withdrawals from their contract up to the amount of their total contributions, even if the AV subsequently falls to zero, provided that during each contract year total withdrawals do not exceed annual GMWB withdrawal amount that is calculated under the terms of the contract. The policyholder may choose either a 5% GMWB Annual withdrawal option or a 7% GMWB Annual withdrawal option. Annual withdrawal amounts are not cumulative year over year. The charge for the GMWB is calculated based on the GMWB benefit base value and deducted annually from the AV. We ceased offering GMWB riders in 2008.

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GMAB. This benefit guarantees that the AV can never fall below a minimum amount for a set period, which can also include locking in capital market gains. This rider protects the policyholder from market fluctuations. Two options we offered were a 100% principal guarantee and a 125% principal guarantee. Each option limited the policyholder to specified investment options. The charge for the GMAB is calculated based on the GMAB benefit base value and deducted annually from the AV. We ceased offering GMAB riders in 2008.

•	GIB. This benefit provides the policyholder with a guaranteed lifetime annuity based on predetermined annuity purchase rates applied to a GIB benefit base, with annuitization automatically triggered if and when the contract AV falls to zero. The charge for the GIB is calculated based on the GIB benefit base value and deducted annually from the AV. We ceased offering the GIB in 2012.

•	Lapse. The policyholder may lapse or exit the contract, at which time the GMIB and any other GMxB guarantees are terminated. If the policyholder partially exits, the GMIB benefit base and any other GMxB benefit bases will be reduced in accordance with the contract terms.

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Dollar-for-Dollar Withdrawals. A policyholder may request a onetime withdrawal or take systematic withdrawals from his or her contract at any time. All withdrawals reduce a contract’s AV by the dollar amount of a withdrawal. However, the impact of withdrawals on the GMIB and any other guaranteed benefit bases may vary depending on the terms of the contract. Withdrawals will reduce guaranteed benefit bases on a dollar-for-dollar basis as long as the sum of withdrawals in a contract year is equal to or less than the dollar-for-dollar withdrawal threshold defined in the contract, beyond which all withdrawals are considered “excess withdrawals.” An excess withdrawal may reduce the guaranteed benefit bases on a pro rata basis, which can have a significantly adverse effect on their values. A policyholder wishing to take the maximum amount of dollar-for-dollar withdrawals on a systematic basis may sign up for our dollar-for-dollar withdrawal service at no additional charge. Withdrawals under this automated service will never result in a pro rata reduction of the guaranteed benefit bases, provided that no withdrawals are made outside the service. If making dollar-for-dollar withdrawals in combination with negative investment reduces the AV to zero, the contract may have a no-lapse guarantee that triggers the automatic exercise of the GMIB, providing the policyholder with a stream of lifetime annuity payments determined by the GMIB benefit base value, the age and gender of the annuitant and predetermined annuity purchase factors.

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Voluntary Annuitization. The policyholder may choose to annuitize their AV or exercise their GMIB (if eligible). GMIB annuitization entitles the policyholder to receive a stream of lifetime (with or without period certain) annuity payments determined by the GMIB benefit base value, the age and gender of the annuitant and predetermined annuity purchase factors. GMIB annuitization cannot be elected past the maximum GMIB exercise age as stated in the contract, generally age 85 or 95. The policyholder may otherwise annuitize the AV and choose one of several payout options.

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Convert to a GWBL. In some products, policyholders have the option to convert their GMIB into a GWBL to receive guaranteed income through a lifetime withdrawal feature. This choice can be made as an alternative to electing to annuitize at the maximum GMIB exercise age and may be appealing to policyholders who would prefer the ability to withdraw higher annual dollar-for-dollar amounts from their contract than permitted under the GMIB, for as long as their AV remains greater than zero.

•	Remain in Accumulation Phase. If the policyholder chooses to remain in the contract’s accumulation phase past the maximum GMIB exercise age—that is, by not electing annuitization or converting to a GWBL—and as long as the AV has not fallen to zero, then the GMIB will terminate and the contract will continue until the contractual maturity date.

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(1)	See table summarizing the NAR and reserves of policyholders by type of GMxB feature for variable annuity contracts as of December 31, 2019, 2018 and 2017 under “—Net Amount at Risk.”

(2)	All Other includes individual variable annuity policies with stand-alone Annual Ratchet or stand-alone Roll-up GMDB.

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(1)	U.S. GAAP reserves for ROP death benefit only are not available, as U.S. GAAP reserve valuation basis applies on policy contracts grouped by issue year.

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•	Guaranteed Interest Option (“GIO”)—Provides a fixed interest rate and guaranteed AV.

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Structured Investment Option (“SIO”)—Provides upside market participation that tracks either the S&P 500, Russell 2000 or the MSCI EAFE index subject to a performance cap, with a downside buffer that limits losses in the investment over a one, three or five-year investment horizon. This option leverages our innovative SCS individual annuity offering, and we believe that we are the only provider that offers this type of guarantee in the defined contribution markets today.

•	Personal Income Benefit—An optional GMxB feature that enables participants to obtain a guaranteed withdrawal benefit for life for an additional fee.

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•	Tax-exempt 403(b)/457(b). We primarily serve individual employees of public school systems. To a lesser extent, we also market to government entities that sponsor 457(b) plans.

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Corporate 401(k). We target small and medium-sized businesses with 401(k) plans that generally have under $20 million in assets. Our product offerings accommodate start up plans and plans with accumulated assets. Typically, our products appeal to companies with strong contribution flows and a smaller number of participants with relatively high average participant balances. The under $20 million asset plan market is well aligned with our advisor distribution, which has a strong presence in the small and medium-sized business market, and complements our other products focused on this market (such as life insurance and employee benefits products aimed at this market).

•	Other. Our other business includes an affinity-based direct marketing program where we offer retirement and individual products to employers that are members of industry or trade associations and various other sole proprietor and small business retirement accounts.

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Institutional Services—servicing its institutional clients, including private and public pension plans, foundations and endowments, insurance companies, central banks and governments worldwide, and affiliates such as Holdings and its subsidiaries, by means of separately-managed accounts, sub-advisory relationships, structured products, collective investment trusts, mutual funds, hedge funds and other investment vehicles.

•	Retail Services—servicing its retail clients, primarily by means of retail mutual funds sponsored by AB or Equitable FMG, sub-advisory relationships with mutual funds sponsored by third parties, separately-managed account programs sponsored by financial intermediaries worldwide and other investment vehicles.

•	Private Wealth Management Services—servicing its private clients, including high net worth individuals and families, trusts and estates, charitable foundations, partnerships, private and family corporations, and other entities, by means of separately-managed accounts, hedge funds, mutual funds and other investment vehicles.

•	Bernstein Research Services—servicing institutional investors, such as pension fund, hedge fund and mutual fund managers, seeking high-quality fundamental research, quantitative services and brokerage-related services in equities and listed options.

•	Actively-managed equity strategies, with global and regional portfolios across capitalization ranges, concentration ranges and investment strategies, including value, growth and core equities

•	Actively-managed traditional and unconstrained fixed income strategies, including taxable and tax-exempt strategies;

•	Passive management, including index and enhanced index strategies;

•	Alternative investments, including hedge funds, fund of funds, direct lending and private equity; and

•	Multi-asset solutions and services, including dynamic asset allocation, customized target-date funds and target-risk funds.

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(1)	Includes index and enhanced index services.

(2)	Includes certain multi-asset solutions and services and certain alternative investments.

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(1)	Includes index and enhanced index services.

(2)	Includes certain multi-asset solutions and services and certain alternative investments.

(3)	Approximately $900 million of non-investment management fee earning taxable and tax-exempt money market assets were removed from assets under management during the second quarter of 2019.

(1)	Includes index and enhanced index services.

(2)	Includes certain multi-asset solutions and services and certain alternative investments.

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(1)	For the individual life insurance in-force, other includes current assumption universal life insurance, whole life insurance and other products available for sale but not actively marketed.

(1)	For the individual life insurance in-force, other includes current assumption universal life insurance, whole life insurance and other products available for sale but not actively marketed.

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(1)	Does not include life insurance sold as part of our employee benefits business as it is a start-up business with a limited amount of in-force policies.

(2)	Universal life includes guaranteed universal life insurance products.

(3)	Variable universal life includes variable life insurance and corporate-owned life insurance.

(4)	Does not include Protection Solutions Reserves for our employee benefits business as it is a start-up business and therefore has immaterial in-force policies.

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changes in interest rates may reduce the spread on some of our products between the amounts that we are required to pay under the contracts and the rate of return we are able to earn on our General Account investments supporting the contracts. When interest rates decline, we have to reinvest the cash income from our investments in lower yielding instruments, potentially reducing net investment income. Since many of our policies and contracts have guaranteed minimum interest or crediting rates or limit the resetting of interest rates, the spreads could decrease and potentially become negative. When interest rates rise, we may not be able to quickly replace the assets in our General Account with higher yielding assets needed to fund the higher crediting rates necessary to keep these products and contracts competitive, which may result in higher lapse rates;

•	when interest rates rise rapidly, policy loans and surrenders and withdrawals of annuity contracts and life insurance policies may increase as policyholders seek to buy products with perceived higher returns, requiring us to sell investment assets potentially resulting in realized investment losses, or requiring us to accelerate the amortization of DAC, which could reduce our net income;

•	a decline in interest rates accompanied by unexpected prepayments of certain investments may result in reduced investment income and a decline in our profitability. An increase in interest rates accompanied by unexpected extensions of certain lower yielding investments may result in a decline in our profitability;

•	changes in the relationship between long-term and short-term interest rates may adversely affect the profitability of some of our products;

•	changes in interest rates could result in changes to the fair value of our GMIB reinsurance contracts asset, which could increase the volatility of our earnings. Higher interest rates reduce the value of the GMIB reinsurance contract asset which reduces our earnings, while lower interest rates increase the value of the GMIB reinsurance contract asset which increases our earnings;

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•	changes in interest rates could result in changes to the fair value liability of our variable annuity GMxB business. Higher interest rates decrease the fair value liability of our GMxB variable annuity business, which increases our earnings; while lower interest rates increase the fair value liability of our GMxB variable annuity business, which decreases our earnings;

•	changes in interest rates may adversely impact our liquidity and increase our costs of financing and the cost of some of our hedges;

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our mitigation efforts with respect to interest rate risk are primarily focused on maintaining an investment portfolio with diversified maturities that has a weighted average duration that is within an acceptable range of the duration of our estimated liability cash flow profile given our risk appetite. However, our estimate of the liability cash flow profile may turn out to be inaccurate. In addition, there are practical and capital market limitations on our ability to accomplish this objective. Due to these and other factors we may need to liquidate investments prior to maturity at a loss in order to satisfy liabilities or be forced to reinvest funds in a lower rate environment;

•	we may not be able to effectively mitigate, including through our hedging strategies, and we may sometimes choose based on economic considerations and other factors not to fully mitigate or to increase, the interest rate risk of our assets relative to our liabilities; and

•	for certain of our products, a delay between the time we make changes in interest rate and other assumptions used for product pricing and the time we are able to reflect these assumptions in products available for sale may negatively impact the long-term profitability of products sold during the intervening period.

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•	adverse effects on our earnings;

•	additional demand on our existing employees;

•	unanticipated difficulties integrating operating facilities technologies and new technologies;

•	higher than anticipated costs related to integration;

•	existence of unknown liabilities or contingencies that arise after closing; and

•	potential disputes with counterparties.

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we could experience long-term interruptions in our service and the services provided by our significant vendors due to the effects of catastrophic events. Some of our operational systems are not fully redundant, and our disaster recovery and business continuity planning cannot account for all eventualities. Additionally, unanticipated problems with our disaster recovery systems could further impede our ability to conduct business, particularly if those problems affect our computer-based data processing, transmission, storage and retrieval systems and destroy valuable data;

•	the outbreak of a pandemic disease, like the novel coronavirus COVID-19, could have a material adverse effect on our liquidity, financial condition and the operating results of our insurance business due to increased mortality and, in certain cases, morbidity rates and/or its impact on the economy and financial markets;

•	the occurrence of any pandemic disease, natural disaster, terrorist attack or any other catastrophic event that results in our workforce being unable to be physically located at one of our facilities could result in lengthy interruptions in our service;

•	a localized catastrophic event that affects the location of one or more of our corporate-owned or employer sponsored life insurance customers could cause a significant loss due to the corresponding mortality claims; and

•	a terrorist attack in the United States could have long-term economic impacts that may have severe negative effects on our investment portfolio, including loss of AUM and losses due to significant volatility, and disrupt our business operations. Any continuous and heightened threat of terrorist attacks could also result in increased costs of reinsurance.

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Market Factors. Global financial markets performed very well in 2019, supported by three 25 basis point interest rate cuts from the U.S. Federal Reserve, which were designed to prevent negative impacts from global risks that emerged during the year. Other central banks around the world also provided additional monetary accommodation, boosting global financial markets broadly even as aggregate growth slowed in 2019 relative to 2018. Investor optimism about the eventual resolution of the trade dispute between the United States and China provided a significant boost to global equities in the fourth quarter of 2019. In addition, the Federal Reserve resumed expansion of its balance sheet late in the year, which has been viewed by many financial market participants as indicative of the central bank’s willingness to keep liquidity ample. Subdued inflation kept interest rates generally low, which supported both economic growth and strong financial market performance. Some key risks to market performance in 2020 we are considering include a

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Client Preferences. Generally, AB’s clients may withdraw their assets at any time and on short notice. Also, changing market dynamics and investment trends, particularly with respect to sponsors of defined benefit plans choosing to invest in less risky investments and the ongoing shift to lower-fee passive services described below, may continue to reduce interest in some of the investment products AB offers, or clients and prospects may continue to seek investment products that AB may not currently offer. Loss of, or decreases in, AUM reduces AB’s investment advisory and services fees and revenues.

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AB’s Investment Performance. AB’s ability to achieve investment returns for clients that meet or exceed investment returns for comparable asset classes and competing investment services is a key consideration when clients decide to keep their assets with AB or invest additional assets, and when a prospective client is deciding whether to invest with AB. Poor investment performance, both in absolute terms or relative to peers and stated benchmarks, may result in clients withdrawing assets and in prospective clients choosing to invest with competitors.

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Investing Trends. AB’s fee rates vary significantly among the various investment products and services AB offers to its clients. For example, AB generally earns higher fees from assets invested in its actively-managed equity services than in its actively-managed fixed income services or passive services. Also, AB often earns higher fees from global and international services than AB does from U.S. services. An adverse mix shift would reduce AB’s investment advisory and services fees and revenues.

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Service Changes. AB may be required to reduce its fee levels, restructure the fees it charges or adjust the services it offers to its clients because of, among other things, regulatory initiatives (whether industry-wide or specifically targeted), changing technology in the asset management business (including algorithmic strategies and emerging financial technology), court decisions and competitive considerations. A reduction in fees would reduce AB’s revenues.

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•	industry or general market conditions;

•	domestic and international economic factors unrelated to our performance;

•	changes in our customers’ preferences;

•	new regulatory pronouncements and changes in regulatory guidelines;

•	lawsuits, enforcement actions and other claims by third parties or governmental authorities;

•	adverse publicity related to us or another industry participant;

•	actual or anticipated fluctuations in our operating results;

•	changes in securities analysts’ estimates of our financial performance or lack of research coverage and reports by industry analysts;

•	action by institutional stockholders or other large stockholders, including future sales of our common stock;

•	failure to meet any guidance given by us or any change in any guidance given by us, or changes by us in our guidance practices;

•	announcements by us of significant impairment charges;

•	speculation in the press or investment community;

•	investor perception of us and our industry;

•	changes in market valuations or earnings of similar companies;

•	announcements by us or our competitors of significant contracts, acquisitions, dispositions or strategic partnerships;

•	war, terrorist acts and epidemic disease;

•	any future sales of our common stock or other securities;

•	additions or departures of key personnel; and

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•	misconduct or other improper actions of our employees.

•	authorize the issuance of shares of our common stock to create voting impediments or to frustrate persons otherwise seeking to affect a takeover or gain control;

•	authorize the issuance of “blank check” preferred stock that could be issued by our Board to thwart a takeover attempt;

•	provide that vacancies on our Board, including vacancies resulting from an enlargement of our Board, may be filled only by a majority vote of directors then in office;

•	prohibit stockholders from calling special meetings of stockholders;

•	prohibit stockholder action by written consent, thereby requiring all actions to be taken at a meeting of the stockholders;

•	establish advance notice requirements for nominations of candidates for election as directors or to bring other business before an annual meeting of our stockholders; and

•	require the approval of holders of at least 66 2⁄3% of the outstanding shares of our common stock to amend our amended and restated by-laws and certain provisions of our amended and restated certificate of incorporation.

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•	any breach of the director’s duty of loyalty;

•	acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law;

•	under Section 174 of the DGCL (unlawful dividends); or

•	any transaction from which the director derives an improper personal benefit.

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(1)	On November 6, 2019, Holdings’ Board of Directors approved a $400 million increase to Holdings’ share repurchase program.

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•	fee income derived from our retirement and protection products and our investment management and research services;

•	premiums from our traditional life insurance and annuity products; and

•	investment income from our General Account investment portfolio.

•	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.

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Variable annuity hedging programs. We use a dynamic hedging program (within this program, generally, we reevaluate our economic exposure at least daily and rebalance our hedge positions accordingly) to mitigate certain risks associated with the GMxB features that are embedded in our liabilities for our variable annuity products. This program utilizes various derivative instruments that are managed in an effort to reduce the economic impact of unfavorable changes in GMxB features’ exposures attributable to movements in the equity markets and interest rates. Although this program is designed to provide a measure of economic protection against the impact of adverse market conditions, it does not qualify for hedge accounting treatment. Accordingly, changes in value of the derivatives will be recognized in the period in which they occur with offsetting changes in reserves partially recognized in the current period, resulting in net income volatility. In addition to our dynamic hedging program, we have a hedging program using static hedge positions (derivative positions intended to be held to maturity 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 an increase in net income volatility. The impacts are most pronounced for variable annuity products in our Individual Retirement segment. See “Business—Segment Information—Individual Retirement.”

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GMIB reinsurance contracts. Historically, GMIB reinsurance contracts were used to cede to non-affiliated reinsurers a portion of our exposure to variable annuity products that offer a GMIB feature. We account for the GMIB reinsurance contracts as derivatives and report them at fair value. Gross GMIB reserves are calculated on the basis of assumptions related to projected benefits and related contract charges over the lives of the contracts. Accordingly, our gross reserves will not immediately reflect the offsetting impact on future claims exposure resulting from the same capital market or interest rate fluctuations that cause gains or losses on the fair value of the GMIB reinsurance contracts.

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•	For the Individual Retirement segment, the impacts primarily reflect favorable updates to Amortization of DAC from lower lapse assumptions.

•	For the Group Retirement segment, the impacts primarily reflect a favorable update to maintenance expenses.

•	For the Protection Solutions segment, the results primarily reflect unfavorable updates to mortality and economic assumptions, partially offset by a favorable update to maintenance expenses.

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•	For the Individual Retirement segment, the impacts primarily reflect favorable updates to DAC amortization from primarily lower annuitization assumptions and other policyholder behavior updates.

•	For the Group Retirement segment, the impacts primarily reflect a favorable update reflecting lower withdrawal rates.

•	For the Protection Solutions segment, the results primarily reflect favorable updates to surrender rates, expenses and General Account investment yields, partially offset by an increase in mortality assumptions. As a result of these changes, the variable and interest sensitive products in the Protection Solutions segment are no longer in loss recognition.

•	For the Individual Retirement and Group Retirement segments, the impacts primarily reflect favorable updates to the period over which DAC is amortized.

•	For the Protection Solutions segment, the impacts primarily reflect actuarial assumption updates and model changes, a maintenance expense assumption update, a mortality table update and loss recognition testing.

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Certain of our variable annuity and life insurance products pay guaranteed minimum interest crediting rates. We are required to pay these guaranteed minimum rates even if earnings on our investment portfolio decline, with the resulting investment margin compression negatively impacting earnings. In addition, we expect more policyholders to hold policies with comparatively high guaranteed rates longer (lower lapse rates) in a low interest rate environment. Conversely, a rise in average yield on our investment portfolio should positively impact earnings. Similarly, we expect policyholders would be less likely to hold policies with existing guaranteed rates (higher lapse rates) as interest rates rise.

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A prolonged low interest rate environment also may subject us to increased hedging costs or an increase in the amount of statutory reserves that our insurance subsidiaries are required to hold for GMxB features, lowering their statutory surplus, which would adversely affect their ability to pay dividends to us. In addition, it may also increase the perceived value of GMxB features to our policyholders, which in turn may lead to a higher rate of annuitization and higher persistency of those products over time. Finally, low interest rates may continue to cause an acceleration of DAC amortization or reserve increase due to loss recognition for interest sensitive products, primarily for our Protection Solutions segment.

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Items related to variable annuity product features, which include certain changes in the fair value of the derivatives and other securities we use to hedge these features, the effect of benefit ratio unlock adjustments and changes in the fair value of the embedded derivatives reflected within variable annuity products’ net derivative results and the impact of these items on DAC amortization on our SCS product;

•	Investment (gains) losses, which includes other-than-temporary impairments of securities, sales or disposals of securities/investments, realized capital gains/losses and valuation allowances;

•	Goodwill impairment, which includes a write-down of goodwill in 2017.

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•	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 includes restructuring costs related to severance, lease write-offs related to non-recurring restructuring activities, and separation costs; and

•	Income tax expense (benefit) related to the above items and non-recurring tax items, which includes the effect of uncertain tax positions for a given audit period, permanent differences due to goodwill impairment and the Tax Reform Act.

(1)	Had we modified the treatment of the amortization of DAC for SCS starting in 2017, the adjustment related to Variable annuity product features for the years ended 2018 and 2017 would have been ($126) million and $1.1 billion.

(2)	Other adjustments include separation costs of $222 million, $213 million and $93 million in 2019, 2018 and 2017, respectively.

(3)	Had we modified the treatment of the amortization of DAC for SCS starting in 2017, the adjustment related to Income tax expense (benefit) related to above adjustments for the years ended 2018 and 2017 would have been ($99) million and ($634) million.

(4)	Had we modified the treatment of the amortization of DAC for SCS starting in 2017, Non-GAAP Operating Earnings for the years ended 2018 and 2017 would have been $2.1 billion and $2.0 billion.

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(1)	Had we modified the treatment of the amortization of DAC for SCS starting in 2017, Operating earnings for the years ended 2018 and 2017 for the Individual Retirement segment would have been $1.5 billion and $1.2 billion.

(2)	For average capital amounts by segment, capital components pertaining directly to specific segments such as DAC along with targeted capital are directly attributed to these segments. Targeted capital for each segment is established using assumptions supporting statutory capital adequacy levels (including CTE98).

(3)	Had we modified the treatment of the amortization of DAC for SCS starting in 2017, Non-GAAP Operating ROC for the years ended 2018 and 2017 for the Individual Retirement segment would have been 21.8% and 17.6%.

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(1)	Had we modified the treatment of the amortization of DAC for SCS starting in 2017, the adjustment related to Variable annuity product features for the years ended 2018 and 2017 would have been ($0.23) and $1.89.

(2)	“Other adjustments” includes separation costs of $0.45, $0.38 and $0.17 for the years ended December 31, 2019, 2018 and 2017, respectively.

(3)	Had we modified the treatment of the amortization of DAC for SCS starting in 2017, the adjustment related to Income tax expense (benefit) related to above adjustments for the years ended 2018 and 2017 would have been ($0.18) and ($1.13).

(4)	Had we modified the treatment of the amortization of DAC for SCS starting in 2017, Non-GAAP Operating EPS - common stock, diluted for the years ended 2018 and 2017 would have been $3.81 and $3.57.

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(1)	Had we modified the treatment of the amortization of DAC for SCS starting in 2017, Non-GAAP Operating Earnings for the years ended 2018 and 2017 would have been $2.1 billion and $2.0 billion.

(1)	Had we modified the treatment of the amortization of DAC for SCS starting in 2017, Non-GAAP Operating EPS - common stock, basic for the years ended 2018 and 2017 would have been $3.81 and $3.57.

(2)	Had we modified the treatment of the amortization of DAC for SCS starting in 2017, Non-GAAP Operating EPS - common stock, diluted for the years ended 2018 and 2017 would have been $3.81 and $3.57.

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Increase in Net derivative losses of $3.8 billion mainly due to losses from freestanding derivatives reflecting lower interest rates in 2019, and an increase in the fair value of the GMIBNLG liability due to lower interest rates in 2019. The increase in Net derivative losses was partially offset by the smaller impact from unfavorable assumption updates ($0.6 billion in 2019 versus $1.1 billion in 2018).

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Increase in Policyholders’ benefits of $1.5 billion mainly due to our Individual Retirement segment driven by the unfavorable impact from assumption updates ($890 million unfavorable in 2019 compared to $731 million favorable in 2018), and the impacts of lower interest rates and higher equity markets in 2019 versus 2018, partly offset by a decrease in our Protection Solutions segment driven by the favorable impact from assumption updates ($42 million favorable in 2019 compared to $53 million unfavorable in 2018).

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Increase in Amortization of DAC of $246 million mainly due to increases in our Individual Retirement, Protection Solutions and Group Retirement segments. The increase in our Individual Retirement segment was primarily due to the impacts of lower interest rates and equity market movements in 2019 on assets supporting our SCS block, partially offset by the favorable impact from assumption updates ($92 million in 2019 versus $60 million in 2018). The increase in our Protection Solutions segment was mainly due to the unfavorable impact from assumption updates ($49 million unfavorable in 2019 compared to $183 million favorable in 2018). The increase in our Group Retirement segment was primarily due to the less favorable impact of assumption updates ($3 million in 2019 versus $43 million in 2018).

•	Increase in Interest credited to policyholders’ account balances of $151 million mainly driven by our Individual Retirement segment primarily attributable to higher SCS AV due to new business growth. This was partially offset by the favorable impact from assumption updates of $13 million, and an increase in Indexed Universal Life reserves due to new business in our Protection Solutions segment.

•	Increase in Compensation, benefits and other operating expenses of $85 million mainly driven by our Investment Management and Research segment resulting from higher employee compensation, promotion and servicing, and general and administrative expenses.

•	Increase in Commissions and distribution-related payments of $82 million mainly driven by higher commission expense due to higher distribution-related payments in our Investment Management and Research segment, as well as the growth in sales of non-proprietary and employee benefits products in our Protection Solutions segment.

•	Increase in Net investment income of $1.0 billion mainly due to a change in the market value of trading securities supporting our variable annuity products due to lower interest rates in 2019 compared to 2018, and higher investment income from higher asset balances and the General Account investment portfolio optimization.

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Increase in Fee-type revenue of $117 million mainly driven by an increase in our Investment Management and Research segment attributable to higher base fees resulting from higher average AUM, the growth in sales of our employee benefits products and the favorable impacts from assumption updates ($3 million favorable in 2019 versus $24 million unfavorable in 2018) in our Protection Solutions segment, partially offset by a decrease in our Individual Retirement segment mainly due to lower average Separate Accounts AV in 2019 compared to 2018 resulting from a decline in equity markets in the fourth quarter of 2018 and net outflows in our older fixed-rate GMxB block.

•	Increase in Net investment gains of $159 million primarily due to the rebalancing of our U.S. Treasury portfolio, partially offset by a $134 million impairment on assets and liabilities held-for-sale.

•	Decrease in Net income attributable to noncontrolling interest of $37 million mainly due to lower AB Net income and from the increase in our ownership percentage of AB in 2019 that reduced the noncontrolling interest's share of AB's Net income.

•	Increase in Income tax benefit of $906 million driven primarily by a pre-tax loss in the year ended 2019 compared to pre-tax income in the year ended 2018 and by a $63 million income tax benefit from the release of a state income tax liability in the second quarter of 2019.

•	Increase in Net investment income of $440 million mainly due to the positive impacts from higher asset balances, the General Account investment portfolio optimization, and higher income from seed capital investment subject to market risk.

•	Increase in Net derivative gains of $107 million mainly due to a $180 million increase in our Individual Retirement segment largely offsetting the impact of lower interest rates on our GMxB liabilities in 2019.

•	Decrease in Policyholders’ benefits of $95 million mainly in our Protection Solution segment driven by the favorable impact from assumption updates ($42 million favorable in 2019 compared to $53 million unfavorable in 2018), partly

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•	Decrease in Earnings attributable to the noncontrolling interest of $65 million mainly in our Investment Management and Research segment due to lower AB Operating earnings and from the increase in our ownership percentage of AB that reduced the noncontrolling interest’s share of AB’s Operating earnings.

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Increase in Fee-type revenue of $39 million mainly driven by an increase in our Investment Management and Research segment attributable to higher base fees resulting from higher average AUM, the growth in sales of our employee benefits products and the favorable impact from assumption updates ($3 million favorable in 2019 versus $24 million unfavorable in 2018) in our Protection Solutions segment, partially offset by a decrease in our Individual Retirement segment mainly due to lower average Separate Accounts AV in 2019 compared to 2018 resulting from a decline in equity markets in the fourth quarter of 2018 and net outflows in our older fixed-rate GMxB block.

•	Increase in Interest credited to policyholders’ account balances of $151 million driven by our Individual Retirement segment primarily attributable to higher SCS AV due to new business growth partially offset by the favorable impact of assumption updates of $13 million in 2019, and an increase in Indexed Universal Life reserves due to new business in our Protection Solutions segment.

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Increase in Amortization of DAC of $128 million due to increases in our Protection Solutions, Group Retirement and Individual Retirement segments. The increase in our Protection Solutions segment was mainly due to the unfavorable impact from assumption updates ($49 million unfavorable in 2019 versus $183 million favorable in 2018). The increase in our Group Retirement segment was primarily due to the less favorable impact from assumption updates ($3 million in 2019 compared to $43 million in 2018). The increase in our Individual Retirement segment was primarily due to the impact of lower interest rates and higher equity market movements on assets supporting our SCS block in 2019 versus 2018, partially offset by the favorable impact from assumption updates ($92 million in 2019 versus $60 million in 2018). Had we modified the treatment of the amortization of DAC for SCS starting in 2017, the SCS-related DAC amortization excluded from Non-GAAP Operating Earnings would have been $56 million lower, decreasing Non-GAAP Operating Earnings.

•	Increase in Commissions and distribution-related payments of $82 million mainly driven by higher distribution-related payments in our Investment Management and Research segment, as well as the growth in sales of non-proprietary and employee benefits products in our Protection Solutions segment.

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Increase in Compensation, benefits and other operating costs and expenses of $52 million mainly driven by our Investment Management and Research segment resulting from higher employee compensation, promotion and servicing, and general and administrative expenses, partially offset by the non-recurrence of a $43 million expense related to the impact of adopting revenue recognition standard ASC 606 in the year ended 2018.

•	Increase in Income tax expense of $95 million mainly driven by higher pre-tax earnings in 2019. Had we modified the treatment of the amortization of DAC for SCS starting in 2017, the income tax benefit excluded from Non-GAAP Operating Earnings would have been $12 million lower.

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(1)	Had we modified the treatment of the amortization of DAC for SCS starting in 2017, Operating earnings for the years ended 2018 and 2017 for the Individual Retirement segment would have been $1.5 billion and $1.2 billion.

(2)	Had we modified the treatment of the amortization of DAC for SCS starting in 2017, Non-GAAP Operating Earnings for the years ended 2018 and 2017 would have been $2.1 billion and $2.0 billion.

(1)	Had we modified the treatment of the amortization of DAC for SCS starting in 2017, Operating earnings for the years ended 2018 and 2017 for the Individual Retirement segment would have been $1.5 billion and $1.2 billion.

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(1)	Had we modified the treatment of the amortization of DAC for SCS starting in 2017, Amortization of deferred policy acquisition costs for the years ended 2018 and 2017 for the Individual Retirement segment would have been $242 million and $154 million.

(2)	Had we modified the treatment of the amortization of DAC for SCS starting in 2017, Segment benefits and other deductions for the years ended 2018 and 2017 for the Individual Retirement segment would have been $2.3 billion and $2.7 billion.

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•	Increase in Net investment income of $167 million mainly due to higher SCS asset balances and the General Account investment portfolio optimization.

•	Improvement in GMxB results of $71 million primarily due to assumption updates in the third quarter of 2018. GMxB results include Policy charges and fee income, Net derivative gains (losses) and Policyholders’ benefits.

•	Commissions and distribution-related payments decreased by $10 million due to lower asset balances.

•	Fee-type revenue decreased by $63 million mainly due to lower average Separate Accounts AV in 2019 compared to 2018 as a result of the sharp decline in equity markets in the fourth quarter of 2018, and net outflows in our older fixed-rate GMxB block.

•	Increase in Interest credited to policyholders’ account balances of $59 million primarily driven by higher SCS AV due to new business growth, partially offset by a $13 million favorable impact from assumption updates.

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Increase in Amortization of DAC of $34 million, primarily due to the impact of interest rate and equity market movements on our SCS block in 2018 and higher normal amortization in 2019, partially offset by the favorable impact from assumption updates ($92 million in 2019 versus $60 million in 2018). Had we modified the treatment of the amortization of DAC for SCS starting in 2017, the SCS-related DAC amortization excluded from Operating earnings would have been $56 million lower.

•	Compensation, benefits and other operating costs and expenses increased by $20 million due to a one-time release of a legal fee reserve in 2018.

•	Non-GMxB related Policyholders’ benefits increased by $28 million mainly due to the normal growth of the Payout reserves.

•	Increase in Income tax expense of $26 million was driven by higher pre-tax earnings. Had the treatment in our Non-GAAP Operating Earnings measure of the Amortization of DAC for SCS been modified starting in 2017, income tax benefit excluded from Non-GAAP Operating Earnings would have been $12 million lower.

•	The higher in AV of $14.3 billion in 2019 was due primarily to higher equity markets and net outflows in our older fixed-rate GMxB block.

•	Net outflows of $499 million were $698 million higher than in 2018, mainly driven by $3.8 billion of outflows on our older fixed-rate GMxB block, which were partially offset by $3.3 billion of inflows on our newer, less capital-intensive products.

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•	Net investment income increased by $38 million due to higher asset balances and the General Account investment portfolio optimization.

•	Increase in fee-type revenues of $18 million due to positive net flows and equity market performance in 2019.

•	Amortization of DAC increased by $42 million mainly due to the less favorable impact from assumption updates ($3 million in 2019 versus $43 million in 2018 which was driven by improved lapse experience).

•	Interest credited to policyholders’ account balances increased by $12 million due to AV growth.

•	The increase in AV of $5.5 billion in 2019 was primarily due to positive net flows and equity market performance in 2019.

•	Net inflows of $267 million increased $171 million, driven by record sales in the corporate market as well as strong renewals reflecting high retention in all markets.

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(1)	Includes index and enhanced index services.

(2)	Includes multi-asset solutions and services, and certain alternative investments.

•	Increase in Net investment income of $67 million mainly due to the seed capital investment subject to market risk.

•	Increase in fee-type revenues of $51 million primarily due to higher base fees driven by higher average AUM, partly offset by lower Bernstein Research Services revenues and lower performance-based fees mainly due to the non-recurrence of a $78 million increase in revenues in the year ended 2018 from the impact of adopting revenue recognition standard ASC 606 in 2018.

•	Earnings attributable to the noncontrolling interest decreased by $76 million due to lower AB Operating earnings and from the increase in our ownership percentage of AB that reduced the noncontrolling interests’ share of AB’s Operating earnings.

•	Higher commissions and distribution-related payments of $61 million due to higher payments to financial intermediaries for distribution of AB mutual funds.

•	Compensation, benefits and other operating costs and expenses increased $59 million primarily due to higher employee compensation, promotion and servicing, and general and administrative expenses, partially offset by the non-recurrence of a $43 million expense related to the impact of adopting revenue recognition standard ASC 606 in the year ended 2018.

•	Net derivative gains (losses) decreased $50 million primarily due to derivative losses economically hedging the seed capital investment subject to market risk.

•	Total AUM as of December 31, 2019 was $622.9 billion, up $106.5 billion, or 20.6 %, during 2019. The increase was driven by market appreciation of $82.2 billion, and net inflows of $25.2 billion (primarily due to Retail inflows of 23.8 billion).

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(1)	Does not include Protection Solutions Reserves for our employee benefits business as it is a start-up business and therefore has immaterial in-force policies.

(1)	Includes individual life insurance and does not include employee benefits as it is a start-up business and therefore has immaterial in-force policies.

(2)	Universal Life includes Guaranteed Universal Life.

(3)	Variable Universal Life includes VL and COLI.

•	Decrease in Policyholders’ benefits of $224 million mainly driven by the favorable impact from assumption updates ($42 million favorable in 2019 compared to $53 million unfavorable in 2018), combined with improved mortality experience and a release in our profits followed by losses reserve.

•	Net investment income increased by $66 million primarily due to higher asset balances and the General Account investment portfolio optimization.

•	Compensation, benefits and other operating costs and expenses decreased by $34 million mainly due to the release of a litigation reserve and productivity initiatives.

•	Fee-type revenue increased by $22 million mainly driven by higher sales of non-proprietary and employee benefits products, and the favorable impact from assumption updates ($3 million favorable in 2019 compared to $24 million unfavorable in 2018), partially offset by an inforce update that reduced our policy charges and fee income (offset in amortization of DAC).

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Increase in Amortization of DAC of $45 million mainly due to the unfavorable impact from assumption updates ($49 million unfavorable in 2019 compared to $183 million favorable in 2018 which was partially offset by a $123 million DAC write-off as we exited loss recognition in the second quarter of 2018), and an inforce update that reduced the amortization of DAC (offset in Policy charges and fee income) in 2019.

•	Interest credited to policyholders’ account balances increased $39 million primarily due to an increase in Indexed Universal Life reserves due to new business, partially offset by higher Net derivative gains.

•	Increase in Commissions and distribution-related payments of $24 million due to the growth in sales of non-proprietary and employee benefits products.

•	Income tax expense increased $44 million driven by higher pre-tax earnings.

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(1)	Includes, as of December 31, 2019, 2018 and 2017 respectively, $338 million, $211 million and $25 million of other invested assets.

(2)	Amount for fixed maturities and mortgages represents original cost, reduced by repayments, write-downs, adjusted amortization of premiums, accretion of discount and valuation allowances. Cost for equity securities represents original cost reduced by write-downs; cost for other limited partnership interests represents original cost adjusted for equity in earnings and reduced by distributions.

(3)	December 31, 2019 excludes assets reclassified to Held-for-Sale of $1.0 billion and income of $38 million.

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(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)	Excludes amounts reclassified as Held-for-Sale.

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(1)	Excludes amounts reclassified as Held-for-Sale.

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(1)

Policyholders’ liabilities represent estimated cash flows out of the General Account related to the payment of death and disability claims, policy surrenders and withdrawals, annuity payments, minimum guarantees on Separate Account funded contracts, matured endowments, benefits under accident and health contracts, policyholder dividends and future renewal premium-based and fund-based commissions offset by contractual future premiums and deposits on in-force contracts. These estimated cash flows are based on mortality, morbidity and lapse assumptions comparable with the Company’s experience and assume market growth and interest crediting consistent with actuarial assumptions used in amortizing DAC. These amounts are undiscounted and, therefore, exceed the policyholders’ account balances and future policy benefits and other policyholder liabilities included in the consolidated balance sheet included elsewhere in this Annual Report on Form 10-K. They do not reflect projected recoveries from reinsurance agreements. Due to the use of assumptions, actual cash flows will differ from these estimates, see “— Summary of Critical Accounting Estimates — Liability for Future Policy Benefits.” Separate Accounts liabilities have been excluded as they are legally insulated from General Account obligations and will be funded by cash flows from Separate Accounts assets.

•	At year-end 2019, AB had a $255 million accrual for compensation and benefits, of which $168 million is expected to be paid in 2020, $54 million in 2021 and 2022, $15 million in 2023-2024 and the rest thereafter. Further, AB expects to make contributions to its qualified profit-sharing plan of $15 million in each of the next four years.

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In addition, the Company has obligations under contingent commitments at December 31, 2019, including: the AB Credit Facility; the Company’s $1.9 billion undrawn letters of credit; the Company’s $1.2 billion and $260 million commitments under equity financing arrangements to certain limited partnership and existing mortgage loan agreements, respectively. Information on these contingent commitments can be found in Notes 12, 17 and 18 to the Notes to the Consolidated Financial Statements.

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During 2010, as general partner of AllianceBernstein U.S. Real Estate L.P. (“Real Estate Fund”), AB committed to invest $25 million in the Real Estate Fund. As of December 31, 2019, we had funded $22 million of this commitment. During 2014, as general partner of AllianceBernstein U.S. Real Estate II L.P. (“Real Estate Fund II”), AB committed to invest $28 million, as amended in 2015, in the Real Estate Fund II. As of December 31, 2019, AB had funded $20 million of this commitment.

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•	liabilities for future policy benefits;

•	accounting for reinsurance;

•	capitalization and amortization of DAC and policyholder bonus interest credits;

•	estimated fair values of investments in the absence of quoted market values and investment impairments;

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•	estimated fair values of freestanding derivatives and the recognition and estimated fair value of embedded derivatives requiring bifurcation;

•	goodwill and related impairment;

•	measurement of income taxes and the valuation of deferred tax assets; and

•	liabilities for litigation and regulatory matters.

•	Universal life (“UL”) and investment-type contract policyholder account balances are equal to the policy AV. The policy AV represent an accumulation of gross premium payments plus credited interest less expense and mortality charges and withdrawals.

•	Participating traditional life insurance future policy benefit liabilities are calculated using a net level premium method on the basis of actuarial assumptions equal to guaranteed mortality and dividend fund interest rates.

•	Non-participating traditional life insurance future policy benefit liabilities are estimated using a net level premium method on the basis of actuarial assumptions as to mortality, persistency and interest.

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Loan-to-value ratio—Derived from current loan balance divided by the fair market value of the property. An allowance for credit loss is typically recommended when the loan-to-value ratio is in excess of 100%. In the case where the loan-to-value is in excess of 100%, the allowance for credit loss is derived by taking the difference between the fair market value (less cost of sale) and the current loan balance.

•	Debt service coverage ratio—Derived from actual Operating Earnings divided by annual debt service. If the ratio is below 1.0x, then the income from the property does not support the debt.

•	Occupancy—Criteria vary by property type but low or below market occupancy is an indicator of sub-par property performance.

•	Lease expirations—The percentage of leases expiring in the upcoming 12 to 36 months are monitored as a decline in rent and/or occupancy may negatively impact the debt service coverage ratio. In the case of single-tenant properties or properties with large tenant exposure, the lease expiration is a material risk factor.

•	Maturity—Mortgage loans that are not fully amortizing and have upcoming maturities within the next 12 to 24 months are monitored in conjunction with the capital markets to determine the borrower’s ability to refinance the debt and/or pay off the balloon balance.

•	Borrower/tenant related issues—Financial concerns, potential bankruptcy, or words or actions that indicate imminent default or abandonment of property.

•	Payment status - current vs. delinquent—A history of delinquent payments may be a cause for concern.

•	Property condition—Significant deferred maintenance observed during the lenders annual site inspections.

•	Other—Any other factors such as current economic conditions may call into question the performance of the loan.

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(1)	See Note 2 for details of balances with variable interest entities.

(2)	See Note 23 for details of Redeemable noncontrolling interest.

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(1)	A reclassification of $5 million and $3 million has been made to the previously reported amounts for the years ended December 31, 2018 and 2017, respectively to conform to the current period’s presentation.

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•	The Individual Retirement segment offers a diverse suite of variable annuity products which are primarily sold to affluent and high net worth individuals saving for retirement or seeking retirement income.

•	The Group Retirement segment offers tax-deferred investment and retirement services or products to plans sponsored by educational entities, municipalities and not-for-profit entities, as well as small and medium-sized businesses.

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The Investment Management and Research segment provides diversified investment management, research and related solutions globally to a broad range of clients through three main client channels - Institutional, Retail and Private Wealth Management - and distributes its institutional research products and solutions through Bernstein Research Services. The Investment Management and Research segment reflects the business of AllianceBernstein Holding L.P. (“AB Holding”), AllianceBernstein L.P. (“ABLP”) and their subsidiaries (collectively, “AB”).

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The Protection Solutions segment includes the Company’s life insurance and group employee benefits businesses. The life insurance business offers a variety of variable universal life, indexed universal life and term life products to help affluent and high net worth individuals, as well as small and medium-sized business owners, with their wealth protection, wealth transfer and corporate needs. Our group employee benefits business offers a suite of life, short- and long-term disability, dental and vision insurance products to small and medium-size businesses across the United States.

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Loan-to-value ratio – Derived from current loan balance divided by the fair market value of the property. An allowance for credit loss is typically recommended when the loan-to-value ratio is in excess of 100%. In the case where the loan-to-value is in excess of 100%, the allowance for credit loss is derived by taking the difference between the fair market value (less cost of sale) and the current loan balance.

•	Debt service coverage ratio – Derived from actual operating earnings divided by annual debt service. If the ratio is below 1.0x, then the income from the property does not support the debt.

•	Occupancy – Criteria varies by property type but low or below market occupancy is an indicator of sub-par property performance.

•	Lease expirations – The percentage of leases expiring in the upcoming 12 to 36 months are monitored as a decline in rent and/or occupancy may negatively impact the debt service coverage ratio. In the case of single-tenant properties or properties with large tenant exposure, the lease expiration is a material risk factor.

•	Maturity – Mortgage loans that are not fully amortizing and have upcoming maturities within the next 12 to 24 months are monitored in conjunction with the capital markets to determine the borrower’s ability to refinance the debt and/or pay off the balloon balance.

•	Borrower/tenant related issues – Financial concerns, potential bankruptcy or words or actions that indicate imminent default or abandonment of property.

•	Payment status (current vs. delinquent) – A history of delinquent payments may be a cause for concern.

•	Property condition – Significant deferred maintenance observed during the lenders annual site inspections.

•	Other – Any other factors such as current economic conditions may call into question the performance of the loan.

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(1)	Corporate fixed maturities include both public and private issues.

(2)	Includes publicly traded agency pass-through securities and collateralized obligations.

(3)	Includes credit-tranched securities collateralized by sub-prime mortgages and other asset types and credit tenant loans.

(4)	Amounts represent OTTI losses in AOCI, which were not included in Net income (loss).

(5)	Excludes amounts reclassified as Held-for-Sale.

(1)	Excludes amounts reclassified as Held-for-Sale.

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(1)	Represents circumstances where the Company determined in the current period that it intends to sell the security, or it is more likely than not that it will be required to sell the security before recovery of the security’s amortized cost.

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(1)	Represents “transfers out” related to the portion of OTTI losses during the period that were not recognized in Net income (loss) for securities with no prior OTTI loss.

(2)	Includes a $113 million benefit from the impact of adoption of ASU 2018-02.

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(1)	Excludes amounts reclassified as Held-for-Sale.

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(1)	The debt service coverage ratio is calculated using the most recently reported operating income results from property operations divided by annual debt service.

(2)	The loan-to-value ratio is derived from current loan balance divided by the most recent fair value estimate of the property. The fair value of the underlying commercial properties is updated annually.

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(1)	Reported in Other invested assets in the consolidated balance sheets.

(2)	Reported in Net derivative gains (losses) in the consolidated statements of income (loss).

(3)	Reported in Future policy benefits and other policyholders’ liabilities in the consolidated balance sheets.

(4)	SCS, SIO, MSO and IUL indexed features are reported in Policyholders’ account balances in the consolidated balance sheets.

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(1)	Reported in Other invested assets in the consolidated balance sheets.

(2)	Reported in Net derivative gains (losses) in the consolidated statements of income (loss).

(3)	Reported in Future policy benefits and other policyholders’ liabilities in the consolidated balance sheets.

(4)	SCS, SIO, MSO and IUL indexed features are reported in Policyholders’ account balances in the consolidated balance sheets.

(5)	Reported in Other assets or Other liabilities in the consolidated balance sheets.

(6)	Reported in Other income in the consolidated statements of income (loss).

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(1)	Excludes Investment Management and Research segment’s derivative assets of consolidated VIEs/VOEs.

(2)	Excludes Investment Management and Research segment’s derivative liabilities of consolidated VIEs/VOEs.

(3)	Includes primarily financial instrument sent (held).

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(1)	Excludes Investment Management and Research segment’s derivative assets of consolidated VIEs/VOEs.

(2)	Excludes Investment Management and Research segment’s derivative liabilities of consolidated VIEs/VOEs.

(3)	Excludes expense of $2 million included in Securities sold under agreement to repurchase on the consolidated balance sheets.

(4)	U.S. Treasury and agency securities are in Fixed maturities available for sale on consolidated balance sheets.

(1)	Excludes expense of $2 million in Securities sold under agreement to repurchase on the consolidated balance sheets.

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Level 1	Unadjusted quoted prices for identical instruments in active markets. Level 1 fair values generally are supported by market transactions that occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar instruments, quoted prices in markets that are not active, and inputs to model-derived valuations that are directly observable or can be corroborated by observable market data.

Level 3	Unobservable inputs supported by little or no market activity and often requiring significant management judgment or estimation, such as an entity’s own assumptions about the cash flows or other significant components of value that market participants would use in pricing the asset or liability.

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(1)	Excludes amounts reclassified as Held-for-Sale.

(2)	Corporate fixed maturities includes both public and private issues.

(3)	Includes publicly traded agency pass-through securities and collateralized obligations.

(4)	Includes credit-tranched securities collateralized by sub-prime mortgages and other asset types and credit tenant loans.

(5)	Separate account assets included in the fair value hierarchy exclude investments in entities that calculate NAV per share (or its equivalent) as a practical expedient. Such investments excluded from the fair value hierarchy include investments in real estate and commercial mortgages. At December 31, 2019 the fair value of such investments was $356 million.

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(1)	Corporate fixed maturities includes both public and private issues.

(2)	Includes publicly traded agency pass-through securities and collateralized obligations.

(3)	Includes credit-tranched securities collateralized by sub-prime mortgages and other asset types and credit tenant loans.

(4)	Separate account assets included in the fair value hierarchy exclude investments in entities that calculate NAV per share (or its equivalent) as a practical expedient. Such investments excluded from the fair value hierarchy include investments in real estate and commercial mortgages. At December 31, 2018 the fair value of such investments was $353 million.

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(1)	Transfers into/out of the Level 3 classification are reflected at beginning of period fair values.

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(1)	The Company’s non-performance risk is recorded through Net derivative gains (losses).

(2)	For the GMIB reinsurance contract asset, and GMxB derivative features liability, represents attributed fee.

(3)	For the GMIB reinsurance contract asset, represents recoveries from reinsurers and for GMxB derivative features liability represents benefits paid.

(4)	For contingent payment arrangements, it represents payments under the arrangement.

(5)	Transfers into/out of the Level 3 classification are reflected at beginning-of-period fair values.

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(1)	Mortality rates vary by age and demographic characteristic such as gender. Mortality rate assumptions are based on a combination of company and industry experience. A mortality improvement assumption is also applied. For any given contract, mortality rates vary throughout the period over which cash flows are projected for purposes of valuating the embedded derivatives.

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(1)	Mortality rates vary by age and demographic characteristic such as gender. Mortality rate assumptions are based on a combination of company and industry experience. A mortality improvement assumption is also applied. For any given contract, mortality rates vary throughout the period over which cash flows are projected for purposes of valuating the embedded derivatives.

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(1)	Excludes amounts reclassified as Held-for-Sale.

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•	Return of Premium: the benefit is the greater of current account value or premiums paid (adjusted for withdrawals);

•	Ratchet: the benefit is the greatest of current account value, premiums paid (adjusted for withdrawals), or the highest account value on any anniversary up to contractually specified ages (adjusted for withdrawals);

•	Roll-Up: the benefit is the greater of current account value or premiums paid (adjusted for withdrawals) accumulated at contractually specified interest rates up to specified ages;

•	Combo: the benefit is the greater of the ratchet benefit or the roll-up benefit, which may include either a five year or an annual reset; or

•	Withdrawal: the withdrawal is guaranteed up to a maximum amount per year for life.

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(1)	In general, for policies with the highest contractual interest rate shown (10%), the rate applied only for the first 10 years after issue, which has now elapsed.

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(1)	There were no amounts of reinsurance ceded in any period presented.

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•	JP Morgan Chase Bank, N.A. ($150 million)

•	Citibank Europe PLC ($175 million)

•	Barclays Bank PLC ($150 million)

•	HSBC Bank USA, National Association ($150 million)

•	Credit Agricole Corporate and Investment Bank ($400 million)

•	Landesbank Hessen-Thuringen Girozentrale ($300 million)

•	Commerzbank AG, New York Branch ($325 million)

•	Natixis, New York Branch ($250 million)

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•	services AXA or its subsidiaries (other than the Company) receive pursuant to a contract with a third-party service provider, which AXA or its subsidiaries then provide to the Company on a pass-through basis;

•	services the Company receives pursuant to a contract with a third-party service provider, which the Company then provides to AXA or its subsidiaries (excluding the Company) on a pass-through basis;

•	certain services the Company receives directly from AXA or its subsidiaries (excluding the Company); and

•	certain services the Company provides directly to AXA or its subsidiaries (excluding the Company).

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(1)	Actuarial gains and losses are a product of changes in the discount rate as shown below.

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(1)	Cannot sell or transfer ownership interest without prior written consent to transfer, and by meeting several criteria (e.g., does not adversely affect other investors).

(2)	Cannot sell interest in the vehicle without prior written consent of the managing member.

(3)	March, June, September and December.

(4)	Includes Equity method investments of $115 million and $128 million at December 31, 2019 and 2018, respectively.

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(1)	The $9 million, $11 million and $14 million difference between the funding agreements carrying value shown in fair value table for 2019, 2018 and 2017, respectively, reflects the remaining amortization of a hedge implemented and closed, which locked in the funding agreements borrowing rates.

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•	The Individual Retirement segment offers a diverse suite of variable annuity products which are primarily sold to affluent and high net worth individuals saving for retirement or seeking retirement income.

•	The Group Retirement segment offers tax-deferred investment and retirement services or products to plans sponsored by educational entities, municipalities and not-for-profit entities, as well as small and medium-sized businesses.

•	The Investment Management and Research segment provides diversified investment management, research and related solutions globally to a broad range of clients through three main client channels- Institutional, Retail and Private Wealth Management-and distributes its institutional research products and solutions through Bernstein Research Services.

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The Protection Solutions segment includes our life insurance and group employee benefits businesses. Our life insurance business offers a variety of variable universal life, universal life and term life products to help affluent and high net worth individuals, as well as small and medium-sized business owners, with their wealth protection, wealth transfer and corporate needs. Our group employee benefits business offers a suite of dental, vision, life, and short- and long-term disability and other insurance products to small and medium-size businesses across the United States.

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Items related to variable annuity product features, which include certain changes in the fair value of the derivatives and other securities we use to hedge these features, the effect of benefit ratio unlock adjustments and changes in the fair value of the embedded derivatives reflected within variable annuity products’ net derivative results and the impact of these items on DAC amortization on our SCS product;

•	Investment (gains) losses, which includes other-than-temporary impairments of securities, sales or disposals of securities/investments, realized capital gains/losses and valuation allowances;

•	Goodwill impairment, which includes a write-down of goodwill in 2017.

•	Net actuarial (gains) losses, which includes actuarial gains and losses as a result of differences between actual and expected experience on pension plan assets or projected benefit obligation during a given period related

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•	Other adjustments, which includes restructuring costs related to severance, lease write-offs related to non-recurring restructuring activities, and separation costs; and

•	Income tax expense (benefit) related to the above items and non-recurring tax items, which includes the effect of uncertain tax positions for a given audit period, permanent differences due to goodwill impairment and the Tax Reform Act.

(1)	Had we modified the treatment of the amortization of DAC for SCS starting in 2017, the adjustment related to Variable annuity product features for the years ended 2018 and 2017 would have been ($126) million and $1.1 billion.

(2)	Other adjustments include separation costs of $222 million, $213 million and $93 million in 2019, 2018 and 2017, respectively.

(3)	Had we modified the treatment of the amortization of DAC for SCS starting in 2017, the adjustment related to Income tax expense (benefit) related to above adjustments for the years ended 2018 and 2017 would have been ($99) million and ($634) million.

(4)	Had we modified the treatment of the amortization of DAC for SCS starting in 2017, Operating earnings for the years ended 2018 and 2017 would have been $2.1 billion and $2.0 billion.

(5)	Had we modified the treatment of the amortization of DAC for SCS starting in 2017, Operating earnings for the years ended 2018 and 2017 for the Individual Retirement segment would have been $1.5 billion and $1.2 billion.

(6)	Includes interest expense and financing fees of $228 million, $223 million and $138 million, in 2019, 2018 and 2017, respectively.

•	Items related to variable annuity product features, which include certain changes in the fair value of the derivatives and other securities we use to hedge these features and changes in the fair value of the embedded derivatives reflected within the net derivative results of variable annuity product features;

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•	Investment gains (losses), net, which include other-than-temporary impairments of securities, sales or disposals of securities/investments, realized capital gains/losses, and valuation allowances; and

•	Other adjustments, which includes investment income (loss) from certain derivative instruments, excluding derivative instruments used to hedge risks associated with interest margins on interest sensitive life and annuity contracts and freestanding and embedded derivatives associated with products with GMxB features.

(1)	Includes investment expenses charged by AB of $76 million, $67 million and $68 million for 2019, 2018 and 2017, respectively, for services provided to the Company.

(2)	Inter-segment investment management and other fees of $104 million, $94 million and $96 million for 2019, 2018 and 2017, respectively, are included in segment revenues of the Investment Management and Research segment.

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(1)	A reclassification of $10 million and $5 million, respectively has been made to the December 31, 2018 and 2017 previously reported balances to conform to the current period’s presentation.

(2)	2018 includes a $113 million decrease to Accumulated other comprehensive loss from the impact of adoption of ASU 2018-02.

(3)	2018 includes a $202 million increase to Accumulated other comprehensive loss from the impact of adoption of ASU 2018-02.

(4)	2018 includes a $7 million decrease to Accumulated other comprehensive loss from the impact of adoption of ASU 2016-01.

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(1)	See “Reclassification adjustments” in Note 3. Reclassification amounts presented net of income tax expense (benefit) of $(43) million, $13 million and $5 million for the years December 31, 2019, 2018 and 2017, respectively.

(2)	A reclassification of $5 million and $3 million has been made to the previously reported amounts for the years ended December 31, 2018 and 2017, respectively to conform to the current period’s presentation.

(3)	These AOCI components are included in the computation of net periodic costs (see “Employee Benefit Plans” in Note 14).

(1)	Calculated using the treasury stock method.

(2)	Shares in the diluted EPS calculation represent basic shares for the year ended 2019 due to the net loss in this period. The shares excluded from the calculation were 1.1 million.

(3)	The incremental dilution from AB represents the impact of AB’s dilutive units on the Company’s diluted earnings per share and is calculated based on the Company’s proportionate ownership interest in AB.

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(1)	Excludes amounts reclassified as Held-for-Sale.

(2)	Cost for fixed maturities represents original cost, reduced by repayments and write-downs and adjusted for amortization of premiums or accretion of discount; cost for equity securities represents original cost reduced by write-downs; cost for other limited partnership interests represents original cost adjusted for equity in earnings and reduced by distributions.

(3)	Carrying value for mortgage loans on real estate represents original cost adjusted for amortization of premiums or accretion of discount and reduced by valuation allowance.

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(1)	Net investment income (loss) is allocated to segments. Includes net derivative gains (losses).

(2)	Operating expenses are allocated to segments.

(3)	Excludes amounts reclassified as Held-for-Sale.

(1)	Net investment income (loss) is allocated to segments. Includes net derivative gains (losses).

(2)	Operating expenses are allocated to segments.

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(1)	Net investment income (loss) is allocated to segments. Includes net derivative gains (losses).

(2)	Operating expenses are allocated to segments.

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(1)	Includes amounts related to the discontinued group life and health business.

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(i)	the revision of the interim financial statements for the nine, six, and three months ended September 30, June 30, and March 31, 2018 and 2017, respectively, and the annual financial statements for the year ended December 31, 2017;

(ii)	the amended restatement of the interim financial statements for the nine months ended September 30, 2017 and the six months ended June 30, 2017, and the year ended December 31, 2016 and revisions for the six and three months ended June 30, 2018 and March 31, 2018, respectively, and the three months ended March 31, 2017 and the years ended December 31, 2017, 2015, 2014, and 2013, respectively

(iii)	the revision of the annual financial statements for the year ended December 31, 2017 and amended the restated annual financial statements for the year ended December 31, 2016, and amended the restated interim financial statements for the nine and six months ended September 30, 2017, and June 30, 2017, respectively;

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•	We have designed, implemented and tested an enhanced model validation control framework, including a rotational schedule to periodically re-validate all U.S. GAAP models.

•	We have designed, implemented and tested enhanced controls and governance processes for new model implementations.

•	We have designed, implemented and tested enhanced controls for model changes.

•	We have designed, implemented and tested enhanced controls over the annual assumption setting process, including a comprehensive master assumption inventory and risk framework.

•	We have designed, implemented and tested new controls and are redesigning certain of these controls to validate the reliability of significant data flows feeding actuarial models and assumptions

•	With respect to insufficient personnel, we have strengthened our finance team by adding approximately 25 employees to the Accounting and Financial Reporting areas. These additional resources have provided additional requisite skills and experience needed to support a public-company accounting and reporting

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•	To improve controls over journal entries, a less controlled secondary process that was used for consolidating certain entities, reflecting adjustments to prior periods, and generating the business segment disclosures has been eliminated. Beginning with third quarter 2018, all journal entries are recorded in the Company’s general ledger and the secondary process is no longer necessary.

•	We have enhanced the controls over journal entries through the implementation of new standards designed to ensure effective review and approval of journal entries with sufficient supporting documentation.

•	We have designed, implemented and tested new management review controls within the period end financial reporting process that operate at a level of precision sufficient to detect errors that could result in a material misstatement.

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(1)

Represents 2,317,991 outstanding Options, 2,578,980 outstanding Restricted Stock Units and 1,922,604 outstanding Performance Shares as of December 31, 2019 under the 2018 & 2019 Omnibus Plan. Totals include dividend equivalents on Performance Shares of 30,142 and on Restricted Stock Units of 81,550. The number of Performance Shares represents the number of shares that would be received based on maximum performance, reduced for cancellations through December 31, 2019. The actual number of shares the Compensation Committee will award at the end of each performance period will range between 0% and 200% of the target number of units granted, based upon a measure of the reported performance of the Company relative to stated goals.

(2)	Represents the weighted average exercise price of the Options disclosed in column (a).

(3)

The AXA Equitable Holdings, Inc. Stock Purchase Plan is a non-qualified Employee Stock Purchase Plan to which up to 8,000,000 shares of Common Stock were authorized for issuance, all of which have been registered on Form S-8. Under the plan, eligible participants have the opportunity to receive a 15% match on EQH share purchases, up to a maximum of $3,750 per calendar year. Employer matching contributions will be used to purchase additional shares for the participant. Participants may not contribute more than $50,000 through payroll deductions during any calendar year, and the maximum amount of contributions for a calendar year that is eligible to receive an employer matching contribution is $25,000.

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