EQUITY

9 Months Ended

Sep. 30, 2020

Preferred Stock

Preferred stock authorized, issued and outstanding was as follows:


	September 30, 2020			December 31, 2019
Series	Shares Authorized	Shares Issued	Shares Outstanding	Shares Authorized	Shares Issued	Shares Outstanding
Series A (1)	32,000	32,000	32,000	32,000	32,000	32,000
Series B (2)	20,000	20,000	20,000	—	—	—
Total	52,000	52,000	52,000	32,000	32,000	32,000

Series B Fixed Rate Reset Noncumulative Perpetual Preferred Stock

On August 11, 2020, Holdings issued 500,000 depositary shares, each representing a 1/25th interest in a share of the Company’s Series B Fixed Rate Reset Noncumulative Perpetual Preferred Stock (“Series B Preferred Stock”), $1.00 par value per share and liquidation preference of $25,000 per share, for aggregate net cash proceeds of $494 million ($500 million gross). The Series B Preferred Stock ranks senior to Holdings’ common stock and on parity with Holdings’ Series A Preferred Stock with respect to the payment of dividends and liquidation. Holdings will pay dividends on the Series B Preferred Stock on a noncumulative basis only when, as and if declared by the Company’s Board of Directors (or a duly authorized committee of the Board) and will be payable semi-annually in arrears, at an annual rate equal to the fixed rate of 4.950%, which is reset every 5 years starting on December 15, 2025 (“Reset Date”), at a rate per annum equal to the five-year U.S. Treasury Rate plus 4.736%.

In connection with the issuance of the depositary shares and the underlying Series B Preferred Stock, Holdings incurred $6 million of issuance costs, which have been recorded as a reduction of additional paid-in capital. The Series B Preferred Stock is redeemable at Holdings’ option in whole or in part, from time to time, during the three-month period prior to, and including, each Reset Date, at a redemption price equal to $25,000 per share of preferred stock, plus any declared and unpaid dividends. Furthermore, the preferred stock is redeemable at Holdings’ option, in whole but not in part at any time, within 90 days after the occurrence of certain rating agency events at a redemption price equal to $25,500 per share, plus any declared and unpaid dividends or after the occurrence of certain regulatory capital events at a redemption price equal to $25,000 per share, plus any declared and unpaid dividends.

Preferred Stock

Dividends to Shareholders

Dividends declared per share were as follows for the periods indicated:


	Three Months Ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Series A dividends declared	$	328.13	$	—	$	1,049.99	$	—
Series B dividends declared	$	—	$	—	$	—	$	—

Common Stock

Dividends to Shareholders

Dividends declared per share of common stock were as follows for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Dividends declared	$	0.17	$	0.15	$	0.49	$	0.43

Share Repurchase

On November 6, 2019, Holdings’ Board of Directors authorized a $400 million share repurchase program with an expiration date of December 31, 2020. On February 26, 2020, Holdings’ Board of Directors authorized an increase of $600 million to the capacity of this program as well as the extension of the term of the program until March 31, 2021. Under this program, Holdings may, from time to time through March 31, 2021, purchase up to $1.0 billion of its common stock but it is not obligated to purchase any particular number of shares. Repurchases may be effected in the open market, through derivative, accelerated repurchase and other negotiated transactions and through prearranged trading plans complying with Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

During the three and nine months ended September 30, 2020, Holdings repurchased 4.7 million and 19.7 million shares of its common stock in the open market. As of September 30, 2020, Holdings had capacity of approximately $270 million remaining in its stock repurchase program.

Accumulated Other Comprehensive Income (Loss)

AOCI represents cumulative gains (losses) on items that are not reflected in Net income (loss). The balances as of September 30, 2020 and 2019 follow:


	September 30,
	2020		2019
	(in millions)
Unrealized gains (losses) on investments	$	5,115	$	2,459
Defined benefit pension plans	(912)		(883)
Foreign currency translation adjustments	(56)		(74)
Total accumulated other comprehensive income (loss)	4,148		1,502
Less: Accumulated other comprehensive income (loss) attributable to noncontrolling interest	(40)		(44)
Accumulated other comprehensive income (loss) attributable to Holdings	$	4,188	$	1,546

The components of OCI, net of taxes for the three and nine months ended September 30, 2020 and 2019 follow:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in millions)
Change in net unrealized gains (losses) on investments:
Net unrealized gains (losses) arising during the period	$	309	$	1,279	$	4,675	$	4,002
(Gains) losses reclassified into net income (loss) during the period (1)	(26)		(158)		(225)		(153)
Net unrealized gains (losses) on investments	283		1,121		4,450		3,849
Adjustments for policyholders’ liabilities, DAC, insurance liability loss recognition and other	(54)		(375)		(1,177)		(975)
Change in unrealized gains (losses), net of adjustments (net of deferred income tax expense (benefit) of $61, $198, $870 and $759)	229		746		3,273		2,874
Change in defined benefit plans:
Reclassification to Net income (loss) of amortization of net prior service credit included in net periodic cost	21		18		71		85
Change in defined benefit plans (net of deferred income tax expense (benefit) of $6, $7, $19 and $25)	21		18		71		85
Foreign currency translation adjustments:
Foreign currency translation gains (losses) arising during the period	16		(12)		1		(12)

Foreign currency translation adjustment	16		(12)		1		(12)
Total other comprehensive income (loss), net of income taxes	266		752		3,345		2,947
Less: Other comprehensive income (loss) attributable to noncontrolling interest	6		(5)		1		(7)
Other comprehensive income (loss) attributable to Holdings	$	260	$	757	$	3,344	$	2,954

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(1)See “Reclassification adjustments” in Note 3. Reclassification amounts presented net of income tax expense (benefit) of $(7) million, $(42) million, $(60) million, and $(41) million for the three and nine months ended September 30, 2020 and 2019, respectively

Investment gains and losses reclassified from AOCI to Net income (loss) primarily consist of realized gains (losses) on sales and credit losses of AFS securities and are included in Total investment gains (losses), net on the consolidated statements of income (loss). Amounts reclassified from AOCI to Net income (loss) as related to defined benefit plans primarily consist of amortization of net (gains) losses and net prior service cost (credit) recognized as a component of net periodic cost and reported in Compensation and benefits in the consolidated statements of income (loss). Amounts presented in the table above are net of tax.