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AXA Equitable Holdings Reports First Quarter 2018 Results

AXA Equitable Holdings, Inc. (“AXA Equitable Holdings”, or the
“Company”) (NYSE:EQH) today announced financial results for the first
quarter of 2018, ending March 31, 2018. The results are the first
quarterly earnings reported by AXA Equitable Holdings following its
initial public offering. Shares of AXA Equitable Holdings began trading
on the NYSE on May 10, 2018.

“We are pleased with AXA Equitable Holdings’ strong results in the first
quarter following our transition to becoming a public company,” said
Mark Pearson, President and CEO of AXA Equitable Holdings. “Our IPO
last month marked an important new chapter in our 159-year history, and
I am proud of our team for achieving this significant milestone. For the
quarter, earnings were strong with continued solid performance across
our two well-established franchises, AXA Equitable Life and
AllianceBernstein. These results reflect the strength of our business
model and our ability to execute on our core initiatives of growing our
business, enhancing productivity and optimizing our capital. Going
forward, we remain focused on growing our leading position at the
intersection of advice, asset management and financial protection to
deliver value for our shareholders.”

(in millions, except per share data or unless otherwise noted)

$

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Net income attributable to Holdings in the first quarter of 2018 was
$168 million, an improvement of $458 million compared to the first
quarter of 2017.

Non-GAAP Operating Earnings in the first quarter of 2018, including the
benefit from corporate tax reform, increased to $464 million from $304
million in the first quarter of 2017. Excluding the impacts of tax
reform, Non-GAAP Operating Earnings were up 32% relative to the first
quarter of 2017.

As of March 31, 2018, Book value per share, including accumulated other
comprehensive income (“AOCI”), was $24.18. Book value per share,
excluding AOCI, was $25.87 per share.

First Quarter 2018 Highlights

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Initial Public Offering (“IPO”)

Business Segment Results.

Individual Retirement

Group Retirement

Investment Management and Research

Protection Solutions

Corporate and Other

Operating loss of $(76) million, down $48 million year-over-year, driven
by lower revenues from run-off business and higher interest expense from
floating rate debt.

Earnings Conference Call

AXA Equitable Holdings will host a conference call on Wednesday, June
20, 2018, at 8 a.m. ET, to discuss its first quarter results. The
conference call webcast, along with additional earnings materials will
be accessible on the Company’s investor relations website at ir.axaequitableholdings.com.
Please log on to the webcast at least 15 minutes prior to the call to
download and install any necessary software. To join the conference call
via telephone, please use one of the following dial-in numbers:

A webcast replay will be made available on the AXA Equitable Holdings
Investor Relations website at ir.axaequitableholdings.com.

About AXA Equitable Holdings

AXA Equitable Holdings, Inc. (NYSE: EQH) is one of the leading financial
services companies in the U.S. and is comprised of two complementary and
well-established principal franchises, AXA Equitable Life Insurance
Company and AllianceBernstein. We have been helping clients prepare for
their financial future since 1859 and have a combined total of more than
12,100 employees and financial professionals, 5.4 million customer
relationships and $665 billion of assets under management (as of
3/31/18).

Forward-looking and cautionary statements

This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements give expectations or forecasts of future
events. These statements can be identified by the fact that they do not
relate strictly to historical or current facts. Words such as “expects,”
“believes,” “anticipates,” “intends,” “seeks,” “aims,” “plans,”
“assumes,” “estimates,” “projects,” “should,” “would,” “could,” “may,”
“will,” “shall” or variations of such words are generally part of
forward-looking statements. Forward-looking statements are made based on
management’s current expectations and beliefs concerning future
developments and their potential effects upon AXA Equitable Holdings and
its subsidiaries. There can be no assurance that future developments
affecting AXA Equitable Holdings will be those anticipated by
management. Forward-looking statements include, without limitation, all
matters that are not historical facts.

Forward-looking statements are subject to known and unknown risks and
uncertainties, many of which may be beyond our control. We caution you
that forward-looking statements are not guarantees of future performance
or outcomes and that actual performance and outcomes, including, without
limitation, our actual results of operations or financial condition, may
differ materially from those made in or suggested by the forward-looking
statements contained herein. In addition, even if our results of
operations, financial condition and cash flows are consistent with the
forward-looking statements contained herein, those results may not be
indicative of results in subsequent periods. New factors emerge from
time to time that may cause our business not to develop as we expect,
and it is not possible for us to predict all of them. Factors that could
cause actual results and outcomes to differ from those reflected in
forward-looking statements include, without limitation: adverse
conditions in the global capital markets and the economy; variable
annuity guaranteed benefits features within certain of our products;
inadequacy of our reinsurance and hedging programs; competition from
other insurance companies, banks, asset managers and other financial
institutions; the failure of our new business strategy in accomplishing
our objectives; risks related to our Investment Management and Research
segment, including significant fluctuations in AB’s AUM, the
industry-wide shift from actively-managed investment services to passive
services, termination of investment advisory agreement, inability to
deliver consistent performance, the quantitative models AB uses in
certain of its investment services containing errors, and fluctuations
in exchange rates; inability to recruit, motivate and retain key
employees and experienced and productive financial professionals; the
amount of statutory capital we have and must hold to meet our statutory
capital requirements and our financial strength and credit ratings
varying significantly from time to time; Holdings’ dependence on the
ability of its insurance subsidiaries to pay dividends and other
distributions to Holdings, and the failure of its insurance subsidiaries
to generate sufficient statutory earnings or have sufficient statutory
surplus to enable them to pay ordinary dividends; operational failures,
failure of information systems or failure to protect the confidentiality
of customer information, including by service providers, or losses due
to defaults, errors or omissions by third parties and affiliates; risks
related to strategic transactions; the occurrence of a catastrophe,
including natural or man-made disasters; failure to protect our
intellectual property and infringement claims by a third party; our
investment advisory agreements with clients, and selling and
distribution agreements with various financial intermediaries and
consultants, being subject to termination or non-renewal on short
notice; failure of our insurance to fully cover potential exposures;
changes in accounting standards; Risks and increased compliance and
regulatory costs due to certain of our administrative operations and
offices being located internationally; our counterparties’ requirements
to pledge collateral or make payments related to declines in estimated
fair value of specified assets and changes in the actual or perceived
soundness or condition of other financial institutions and market
participants; gross unrealized losses on fixed maturity and equity
securities, illiquid investments and defaults on investments; changes to
policyholder behavior assumptions under the contracts reinsured to our
affiliated captives, the performance of their hedging program, their
liquidity needs, their overall financial results and changes in
regulatory requirements regarding the use of captives; the failure to
administer or meet any of the complex product and regulatory
requirements of our retirement and protection products; changes in
statutory reserve or other requirements; a downgrade in our financial
strength and claims-paying ratings; consolidation of or a loss of, or
significant change in, key product distribution relationships; the
failure of our risk management policies and procedures to adequately
identify, monitor and manage risks; inadequate reserves due to
differences between our actual experience and management’s estimates and
assumptions; mortality, longevity and morbidity rates or persistency
rates differing significantly from our pricing expectations; the
acceleration of the amortization of DAC; inherent uncertainty in our
financial models that rely on a number of estimates, assumptions and
projections; subjective determination of the amount of allowances and
impairments taken on our investments; changes in the partnership
structure of AB or changes in the tax law governing partnerships; U.S.
federal and state legislative and regulatory action affecting financial
institutions and changes in supervisory and enforcement policies; the
Tax Cuts and Jobs Act and future changes in U.S. tax laws and
regulations or interpretations thereof; adverse outcomes of legal or
regulatory actions; conflicts of interest that arise because our
controlling stockholder and its affiliates have continuing agreements
and business relationships with us; and our failure to effectively
remediate the material weaknesses in our internal control over financial
reporting; costs associated with any rebranding that we expect to
undertake after AXA ceases to own at least a majority of our outstanding
common stock; failure to replicate or replace functions, systems and
infrastructure provided by AXA or certain of its affiliates and loss of
benefits from AXA’s global contracts; and future sales of shares by
existing stockholders could cause our stock price to decline.

Forward-looking statements should be read in conjunction with the other
cautionary statements included and the risks, uncertainties and other
factors identified in our Quarterly Report on Form 10-Q and in our Form
S-1 Registration Statement (file no. 333-221521), filed or to be filed
with the U.S. Securities and Exchange Commission, including in the
sections entitled “Risk Factors” and “Management’s Discussion and
Analyses of Results of Operations and Financial Condition”. Further, any
forward-looking statement speaks only as of the date on which it is
made, and we undertake no obligation to update or revise any
forward-looking statement to reflect events or circumstances after the
date on which the statement is made or to reflect the occurrence of
unanticipated events, except as otherwise may be required by law.

Use of Non-GAAP financial measures

In addition to our results presented in accordance with U.S. GAAP, we
report Non-GAAP Operating Earnings, Non-GAAP Operating EPS and Book
value per share, excluding AOCI, each of which is a measure that is not
determined in accordance with U.S. GAAP. Management believes that the
use of these non-GAAP financial measures, together with relevant U.S.
GAAP measures, provides a better understanding of our results of
operations and the underlying profitability drivers and trends of our
business. These non-GAAP financial measures are intended to remove from
our results of operations the impact of market changes (other than with
respect to equity method investments) as well as certain other expenses
which are not part of our underlying profitability drivers or likely to
re-occur in the foreseeable future, as such items fluctuate from
period-to-period in a manner inconsistent with these drivers. These
measures should be considered supplementary to our results that are
presented in accordance with U.S. GAAP and should not be viewed as a
substitute for the U.S. GAAP measures. Other companies may use similarly
titled non-GAAP financial measures that are calculated differently from
the way we calculate such measures. Consequently, our non-GAAP financial
measures may not be comparable to similar measures used by other
companies.

Non-GAAP Operating Earnings

Non-GAAP Operating Earnings is an after-tax non-GAAP financial measure
used to evaluate our financial performance on a consolidated basis that
is determined by making certain adjustments to our consolidated
after-tax net income attributable to Holdings. The most significant of
such adjustments relates to our derivative positions, which protect
economic value and statutory capital, and are more sensitive to changes
in market conditions than the variable annuity product liabilities as
valued under U.S. GAAP. This is a large source of volatility in net
income.

In the first quarter of 2018, the Company revised its Non-GAAP Operating
Earnings definition as it relates to the treatment of certain elements
of the profitability of its variable annuity products with
indexed-linked features to align with the treatment of its variable
annuity products with GMxB features. In addition, adjustments for
variable annuity products with index-linked features previously included
within Other adjustments in the calculation of Non-GAAP Operating
Earnings are now included with the adjustments for variable annuity
products with GMxB features in the broader adjustment category, Variable
annuity product features. The presentations of Non-GAAP Operating
Earnings in prior periods were revised to reflect this change in
definition.

Non-GAAP Operating Earnings equals our consolidated after-tax net income
attributable to Holdings adjusted to eliminate the impact of the
following items:

Because Non-GAAP Operating Earnings excludes the foregoing items that
can be distortive or unpredictable, management believes that this
measure enhances the understanding of the Company’s underlying drivers
of profitability and trends in our business, thereby allowing management
to make decisions that will positively impact our business.

We use our prevailing corporate federal income tax rate of 21% in 2018
and 35% in 2017, while taking into account any nonrecurring differences
for events recognized differently in our financial statements and
federal income tax returns as well as partnership income taxed at lower
rates when reconciling Net income (loss) attributable to Holdings to
Non-GAAP Operating Earnings.

The table below presents a reconciliation of Net income (loss)
attributable to Holdings to Non-GAAP Operating Earnings for the three
months ended March 31, 2018 and 2017:

March 31,

Non-GAAP Operating EPS

Non-GAAP Operating EPS is calculated by dividing Non-GAAP Operating
Earnings by ending common shares outstanding – diluted. The table below
presents a reconciliation of GAAP EPS to Non-GAAP Operating EPS for the
three months ended March 31, 2018 and 2017:

March 31,

Book Value Per Share, excluding AOCI

We use the term “book value” to refer to “stockholder’s equity.” Book
value per share, excluding AOCI, is our stockholder’s equity, excluding
AOCI, divided by ending common shares outstanding – diluted.

Other Operating Measures

We also use certain operating measures which management believes provide
useful information about our businesses and the operational factors
underlying our financial performance.

Account Value

Account value generally equals the aggregate policy account value of our
retirement products.

Assets Under Management (“AUM”)

AUM means investment assets that are managed by one of our subsidiaries
and includes: (i) assets managed by AB, (ii) the assets in our general
account investment assets portfolio and (iii) the separate account
assets of our Individual Retirement, Group Retirement and Protection
Solutions businesses. Total AUM reflects exclusions between segments to
avoid double counting.

Conditional Tail Expectation (“CTE”) 98

CTE98 is defined as the amount of assets required to satisfy contract
holder obligations across market environments in the average of the
worst 2 percent of scenarios over the life of the contracts.

Consolidated Statements of Income (Loss)

Three Months Ended March 31,

(in millions, except earnings per share data)

Commissions and distribution related payments (includes $120 and
$132 of deferred acquisition costs)

Amortization of deferred policy acquisition costs (net of
capitalization of $160 and $173)

Earnings Per Share

Three Months Ended March 31,

(in millions, except earnings per share data)

Results of Operations by Segment

Three Months Ended March 31,

Select Balance Sheet Statistics

14,511

Assets Under Management

Assets under management

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