RICHMOND, Va., Dec. 18 /PRNewswire-FirstCall/ -- Genworth Financial, Inc. today announced actions being taken to advance the company's strategic goals in response to the current economic downturn. These actions include the elimination of approximately 1,000 jobs globally.
"A workforce reduction is among the most difficult decisions any organization has to make," said Michael D. Fraizer, Genworth chairman and chief executive officer. "We are making tough business decisions to become substantially more streamlined and support our cost and capital positioning during this unprecedented period. This move is one step along with other cost efficiency actions being taken to reduce pretax operating expenses by approximately $100 million to $150 million on an annual run rate by the end of 2009."
Genworth expects to record a pretax non-operating charge of approximately $45 million in the fourth quarter of 2008 for severance, outplacement and other costs associated with the plan for workforce reduction and other restructuring actions.
Genworth estimated its outlook for its life companies' risk-based capital ratio for year end 2008 to be at or above 360 percent. Additionally, at the holding company level, Genworth has repurchased $302 million of its $1.1 billion senior debt scheduled to mature in the first half of 2009.
About Genworth
Genworth Financial, Inc. is a leading Fortune 500 global financial security company. Genworth has more than $100 billion in assets and employs approximately 7,300 people with a presence in more than 25 countries. Its products and services help meet the investment, protection, retirement and lifestyle needs of more than 15 million customers. Genworth operates through three segments: U.S. Retirement and Protection, U.S. Mortgage Insurance and International. Its products and services are offered through financial intermediaries, advisors, independent distributors and sales specialists. Genworth Financial, which traces its roots back to 1871, became a public company in 2004 and is headquartered in Richmond, Virginia. For more information, visit Genworth.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements may be identified by words such as "expects," "intends," "anticipates," "plans," "believes," "seeks," "estimates," "will," or words of similar meaning and include, but are not limited to, statements regarding the outlook for the company's future business and financial performance. Forward- looking statements are based on management's current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially due to global political, economic, business, competitive, market, regulatory and other factors and risks, including the following:
-- Risks relating to our businesses, including adverse capital and credit market conditions, downturns and volatility in equity and credit markets, downgrades in the company's financial strength or credit ratings, the impact of government actions on the financial markets, the company's ability to access current and future government support programs, interest rate fluctuations, the valuation of fixed maturity, equity and trading securities, defaults, downgrades or impairments of portfolio investments, goodwill impairments, the soundness of other financial institutions, the company's ability to access sources of liquidity, declines in risk-based capital, insufficiency of reserves, legal constraints on dividend distributions by subsidiaries, intense competition, availability and adequacy of reinsurance, defaults by counterparties, loss of key distribution partners, regulatory restrictions on the company's operations and changes in applicable laws and regulations, legal or regulatory investigations or actions, the failure or compromise of the security of the company's computer systems, and the occurrence of natural or man-made disasters or a pandemic;
-- Risks relating to our Retirement and Protection segment, including changes in morbidity and mortality, accelerated amortization of deferred acquisition costs and present value of future profits, reputational risks as a result of rate increases on certain in-force long-term care insurance products, medical advances such as genetic mapping research, unexpected changes in persistency rates, increases in statutory reserve requirements, and the failure of demand for long-term care insurance to increase as the company expects;
-- Risks relating to our International segment, including political and economic instability, foreign exchange rate fluctuations, unexpected changes in unemployment rates, unexpected increases in mortgage insurance delinquency rates or severity of defaults, decreases in the volume of high loan-to-value international mortgage originations, increased competition with government- owned and government-sponsored enterprises offering mortgage insurance, changes in regulations, and growth in the global mortgage insurance market that is slower than the company expects;
-- Risks relating to our U.S. Mortgage Insurance segment, including the outcome of the company's review of strategic alternatives for the segment, increases in mortgage insurance delinquency rates or severity of defaults, deterioration in economic conditions or a decline in home price appreciation, the effect of the conservatorship of Fannie Mae and Freddie Mac on mortgage originations, the influence of Fannie Mae, Freddie Mac and a small number of large mortgage lenders and investors, decreases in the volume of high loan-to- value mortgage originations or increases in mortgage insurance cancellations, increases in the use of alternatives to private mortgage insurance (such as simultaneous second mortgages) and reductions by lenders in the level of coverage they select, increases in the use of reinsurance with reinsurance companies affiliated with the company's mortgage lending customers, increased competition with government-owned and government-sponsored enterprises offering mortgage insurance, changes in regulations, legal actions under the Real Estate Settlement Practices Act of 1974 ("RESPA"), and potential liabilities in connection with the company's U.S. contract underwriting services;
-- Other risks, including the possibility that in certain circumstances the company will be obligated to make payments to General Electric Company ("GE") under the company's tax matters agreement with GE even if the company's corresponding tax savings are never realized and the company's payments could be accelerated in the event of certain changes in control, and provisions of the company's certificate of incorporation and bylaws and its tax matters agreement with GE may discourage takeover attempts and business combinations that stockholders might consider in their best interests; and
-- Risks relating to our common stock, including the suspension of dividends and share price fluctuation.
The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.
