
(Amounts in millions)	Three months ended June 30, 2021		Six months ended June 30, 2021

Revenues:
Premiums	$	—	$	51
Net investment income		—		4
Net investment gains (losses)		—		(5	)

Total revenues		—		50

Benefits and expenses:
Benefits and other changes in policy reserves		—		11
Acquisition and operating expenses, net of deferrals		—		7
Amortization of deferred acquisition costs and intangibles		—		6
Interest expense		—		1

Total benefits and expenses		—		25

Income before income taxes and loss on sale (1)		—		25
Provision for income taxes		—		8

Income before loss on sale		—		17
Loss on sale, net of taxes		—		(3	)

Income from discontinued operations, net of taxes		—		14

Less: net income from discontinued operations attributable to noncontrolling interests		—		8

Income from discontinued operations available to Genworth Financial, Inc.’s common stockholders	$	—	$	6

(1)	The six months ended June 30, 2021, includes pre-tax income from discontinued operations available to Genworth Financial, Inc.’s common stockholders of $13 million.

In addition, we recorded

after-tax

income (loss) of $(1) million and $11 million for the six months ended June 30, 2022 and 2021, respectively, associated with refinements to our tax matters agreement

liability.

Lifestyle protection insurance

On December 1, 2015, Genworth Financial, through its subsidiaries, completed the sale of its lifestyle protection insurance business to AXA. In 2017, AXA sued us for damages on an indemnity in the 2015 agreement related to alleged remediation it paid to customers who purchased payment protection insurance (“PPI”). On July 20, 2020, we reached a settlement agreement related to losses incurred from mis-selling

complaints on policies sold from 1970 through 2004. As part of the settlement agreement, Genworth Holdings agreed to make payments for certain PPI mis-selling claims, along with a significant portion of future claims to be invoiced by AXA. Under the settlement agreement, Genworth Holdings issued a secured promissory note to AXA, in which it agreed to make deferred cash payments in two installments in June 2022 and September 2022.

In connection with the Genworth Australia sale, Genworth Holdings made a mandatory principal payment to AXA of approximately £176 million ($245 million) in March 2021. The mandatory payment fully repaid the first installment obligation originally due in June 2022 and partially prepaid the September 2022 installment payment.

On September 21, 2021, Genworth Holdings used a portion of the net proceeds from the minority IPO of Enact Holdings to repay the remaining outstanding balance of the secured promissory note of approximately £215 million ($296 million). As of December 31, 2021, we accrued approximately £22 million ($30 million) of estimated future claims still in process of being invoiced. In February 2022, Genworth Holdings paid AXA $30 million, which constitutes the majority of the estimated remaining unprocessed claims. We have established our current best estimates for claims still being processed by AXA, as well as other expenses; however, there may be future adjustments to this estimate. If amounts are different from our estimate, it could result in an adjustment to our liability and an additional amount reflected in income (loss) from discontinued operations.

The following table presents the amounts owed to AXA under the settlement agreement reflected as liabilities related to discontinued operations in our condensed consolidated balance sheets as of the periods presented:


(Amounts in millions)	British Pounds						U.S. Dollar
	June 30, 2022			December 31, 2021			June 30, 2022			December 31, 2021
Installment payments due to AXA:
June 2022:
Beginning balance	£	—		£	159		$	—		$	217
Prepayments (1)		—			(159	)		—			(217	)

Ending balance		—			—			—			—

September 2022:
Beginning balance		—			187			—			256
Amounts billed as future losses		—			45			—			61
Prepayments (1)		—			(232	)		—			(324	)
Foreign exchange and other		—			—			—			7

Ending balance		—			—			—			—

Total amounts due under the promissory note		—			—			—			—
Future claims:
Estimated beginning balance		22			79			30			108
Plus: Additional amounts invoiced		2			—			2			—
Change in estimated future claims		—			(10	)		—			(14	)
Less: Amounts billed and included as mandatory prepayments		—			(45	)		—			(61	)
Less: Amounts paid		(23	)		(2	)		(31	)		(3	)
Foreign exchange and other		—			—			—			—

Estimated future claims		1			22			1			30

Total amounts due to AXA under the settlement agreement	£	1		£	22		$	1		$	30

(1)

On March 3, 2021, we completed the sale of Genworth Australia and received net proceeds of approximately AUD483 million ($370 million). The sale of Genworth Australia resulted in a mandatory

principal payment of approximately £176 million ($245 million) related to our outstanding secured promissory note issued to AXA, dated as of July 20, 2020, as amended by the parties in connection with the Genworth Australia sale. On September 21, 2021, we used a portion of the net proceeds from the minority IPO of Enact Holdings to repay the remaining outstanding balance of the secured promissory note of approximately £215 million ($296 million).

We recorded an

after-tax

loss from discontinued operations of $1 million and $4 million for the three months ended June 30, 2022 and 2021, respectively, and $2 million and $5 million for the six months ended June 30, 2022 and 2021, respectively, related to the settlement agreement with AXA. In the event AXA recovers amounts from third parties related to the

mis-selling

losses, including from the distributor responsible for the sale of the policies, we have certain rights to share in those recoveries to recoup payments for the underlying

mis-selling

losses. As of June 30, 2022, we have not recorded any amounts associated with recoveries from third parties.

In addition to the future claims still being processed under the settlement agreement, we also have an unrelated liability that is owed to AXA associated with a tax gross up on underwriting losses attributable to a product sold by a distributor in our former lifestyle protection insurance business. As of June 30, 2022 and December 31, 2021, the balance of the liability was $3 million and $4 million, respectively, and is included as liabilities related to discontinued operations in our condensed consolidated balance sheets. For the six months ended June 30, 2021, we recorded an

after-tax

loss of $4 million associated with adjustments to an underwriting loss liability previously owed to AXA.