Genworth Financial Inc. Reports Operating Results (10-Q)
Genworth Financial Inc. has a market cap of $6.1 billion; its shares were traded at around $12.58 with a P/E ratio of 13.8 and P/S ratio of 0.7. GNW is in the portfolios of Todd Combs of Castle Point Capital Management, LLC, HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, Edward Lampert of ESL Investments, NWQ Managers of NWQ Investment Management Co, RS Investment Management, Arnold Schneider of Schneider Capital Management, Dodge & Cox, Louis Moore Bacon of Moore Capital Management, LP, Bruce Kovner of Caxton Associates, John Keeley of Keeley Fund Management, Richard Snow of Snow Capital Management, L.P., Jeremy Grantham of GMO LLC, Steven Cohen of SAC Capital Advisors, Murray Stahl of Horizon Asset Management, George Soros of Soros Fund Management LLC.
Highlight of Business Operations: We also have Corporate and Other activities which include debt financing expenses that are incurred at our holding company level, unallocated corporate income and expenses, eliminations of inter-segment transactions and the results of non-core businesses and non-strategic products that are managed outside of our operating segments. Our non-strategic products include our institutional and corporate-owned life insurance products. Institutional products consist of funding agreements, funding agreements backing notes (FABNs) and guaranteed investment contracts (GICs). For the three months ended September 30, 2010, our Corporate and Other activities net loss available to Genworth Financial, Inc.s common stockholders and net operating loss available to Genworth Financial, Inc.s common stockholders were $35 million and $51 million, respectively. For the nine months ended September 30, 2010, our Corporate and Other activities net loss available to Genworth Financial, Inc.s common stockholders and net operating loss available to Genworth Financial, Inc.s common stockholders were $106 million and $175 million, respectively.
Certain segments of the marketplace are still experiencing declines in the performance of collateral underlying certain structured securities, but corporate impairments continued their downward trend and were at moderate levels during the first half of 2010 with a minimal increase in the third quarter of 2010. We recorded net other-than-temporary impairments of $37 million and $168 million, respectively, during the three and nine months ended September 30, 2010 which were lower than prior year levels and we expect losses to moderate further. Additionally, during the nine months ended September 30, 2010, losses related to limited partnerships decreased $137 million as compared to the nine months ended September 30, 2009 with limited partnership gains in the second and third quarters of 2010. Although economic conditions may continue to negatively impact certain investment valuations, the underlying collateral associated with securities that have not been impaired continues to perform.
Our loss mitigation activities, including those relating to workouts, loan modifications, pre-sales, rescissions and targeted settlements, net of reinstatements, have resulted in a reduction of expected losses of approximately $608 million during the nine months ended September 30, 2010 compared to $557 million during the nine months ended September 30, 2009. Workouts and loan modifications, which related to loans representing 4% of our primary risk in-force as of September 30, 2010, resulted in a reduction of loss exposure of approximately $413 million for the nine months ended September 30, 2010 compared to $140 million for the nine months ended September 30, 2009. Our workout and loan modification programs with various lender and service customers are designed to help borrowers in default regain current repayment status on their mortgage loans, which ultimately allowed many of these borrowers to remain in their homes. During the nine months ended September 30, 2010, we executed loan restructurings and modifications with our lender partners that resulted in reduced monthly mortgage loan repayment amounts either through reductions of the underlying loans interest rates and/or through a lengthening of the loans principal amortization period. The loans that are subject to workouts and loan modifications that were completed could be subject to potential re-default by the underlying borrower at some future date. In addition, pre-sales and other non-cure workouts resulted in a reduction of loss exposure of approximately $43 million for the nine months ended September 30, 2010 compared to $33 million for the nine months ended September 30, 2009. As a result of investigation activities on certain insured delinquent loans, we found significant levels of misrepresentation and non-compliance with certain terms and conditions of our underlying master insurance policies, as well as fraud. These findings separately resulted in rescission actions that reduced our loss exposure at the time of rescission by approximately $152 million for the nine months e
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