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REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

6 Months Ended

Jun. 30, 2025

Accounting Changes and Error Corrections [Abstract]

REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

During the period ended March 31, 2025, the Company identified an immaterial error related to the initial bookkeeping of ceded accrued fees within policyholders’ account balance ultimately impacting the initial deposit accounting of a reinsurance transaction. The impact of this error to prior periods’ financial statements was not considered to be material. To improve the consistency and comparability of the financial statements, management voluntarily revised the financial statements to include the revisions discussed herein. As a result of the determination to revise previously issued financial statements for the deposit accounting discussed above, management also has corrected other previously identified but uncorrected errors and errors recorded in incorrect periods including, a) pension liability overstatement due to a reconciling item, b) incorrect FX impacting the FABN carrying value, c) incorrect inputs ratio in our MRB modeling and incorrect inputs in the deposit accounting calculation, d) the hedging impact of Treasury Inflation-Protected Securities (TIPS) hedging income was incorrectly recorded in Accumulated other comprehensive income, e) error in the manual accrual in an input calculation in the treasury package overstating Policyholders’ account balance and Interest credited to policyholders, f) incorrect actuarial indication impacting the Liability for MRB and purchased MRB, and g) incorrect allocation of earned premiums to loss ratio impacting reserves.

Management assessed the materiality of this change within prior period financial statements based upon SEC Staff Accounting Bulletin Number 99, Materiality, which is since codified in ASC 250, Accounting Changes and Error Corrections. The prior period comparative financial statements that are presented herein have been revised.

The following tables present line items for prior period financial statements that have been affected by the revision. For these line items, the tables detail the amounts as previously reported, the impact upon those line items due to the revision, and the amounts as currently revised within the financial statements.

			June 30, 2024
			As Previously Reported																		Impact of Revisions						As Revised
			(in millions)
Consolidated Balance Sheets:
ASSETS
Amounts due from reinsurers			$	8,237																	$	(150)					$	8,087
Current and deferred income taxes			2,117																		12						2,129
Purchased market risk benefits			7,993																		9						8,002
Other assets			3,825																		3						3,828
Assets for market risk benefits			803																		(4)						799
Total Assets			$	287,769																	$	(130)					$	287,639
LIABILITIES
Policyholders’ account balances			$	104,072																	$	(23)					$	104,049
Liability for market risk benefits			12,593																		19						12,612
Future policy benefits and other policyholders’ liabilities			17,417																		16						17,433
Amounts due to reinsurers			1,363																		10						1,373
Other liabilities			6,718																		(106)						6,612
Total Liabilities			283,296																		(84)						283,212
EQUITY
Retained earnings			10,317																		(16)						10,301
Accumulated other comprehensive income (loss)			(8,645)																		(30)						(8,675)
Total equity attributable to Holdings			1,644																		(46)						1,598
Noncontrolling interest			1,741																		—						1,741
Total Equity			3,385																		(46)						3,339
Total Equity and Redeemable NCI			4,473																		(46)						4,427
Total Liabilities, Redeemable Noncontrolling Interest and Equity			$	287,769																	$	(130)					$	287,639

			Three Months Ended June 30, 2024																		Six Months Ended June 30, 2024
			As Previously Reported																		Impact of Revisions						As Revised						As Previously Reported																		Impact of Revisions						As Revised
			(in millions, except per share data)
Consolidated Statements of Income (Loss)
REVENUES
Premiums			$	282																	$	—					$	282					$	557																	$	10					$	567
Net investment income (loss)			1,166																		1						1,167						2,385																		(8)						2,377
Investment management and service fees			1,240																		—						1,240						2,518																		—						2,518
Other income			429																		(4)						425						688																		(5)						683
Total revenues			3,510																		(3)						3,507						5,740																		(3)						5,737
BENEFITS AND OTHER DEDUCTIONS
Remeasurement of liability for future policy benefits			(8)																		1						(7)						(7)																		5						(2)
Change in market risk benefits and purchased market risk benefits			(133)																		1						(132)						(1,233)																		13						(1,220)
Interest credited to policyholders’ account balances			605																		(6)						599						1,171																		7						1,178
Other operating costs and expenses			427																		1						428						980																		—						980
Total benefits and other deductions			2,829																		(3)						2,826						4,812																		25						4,837
Income (loss) from continuing operations, before income taxes			681																		—						681						928																		(28)						900
Income tax (expense) benefit			(116)																		—						(116)						(146)																		6						(140)
Net income (loss)			565																		—						565						782																		(22)						760
Less: Net (income) loss attributable to the noncontrolling interest			137																		—						137						240																		—						240
Net income (loss) attributable to Holdings			428																		—						428						542																		(22)						520
Less: Preferred stock dividends			26																		—						26						40																		—						40
Net income (loss) available to Holdings’ common shareholders			$	402																	$	—					$	402					$	502																	$	(22)					$	480
EARNINGS PER COMMON SHARE
Basic			$	1.24																	$	—					$	1.24					$	1.53																	$	(0.06)					$	1.47
Diluted			$	1.23																	$	—					$	1.23					$	1.52																	$	(0.07)					$	1.45
Shares Outstanding:
Basic			324.2																		—						324.2						327.2																		—						327.2
Diluted			327.3																		—						327.3						330.4																		—						330.4

			Three Months Ended June 30, 2024																		Six Months Ended June 30, 2024
			As Previously Reported																		Impact of Revisions						As Revised						As Previously Reported																		Impact of Revisions						As Revised
			(in millions)
Consolidated Statements of Comprehensive Income (Loss)
Net income (loss)			$	565																	$	—					$	565					$	782																	$	(22)					$	760
Other comprehensive income (loss) net of income taxes:
Change in unrealized gains (losses), net of reclassification adjustment			(408)																		(1)						(409)						(921)																		(1)						(922)
Change in market risk benefits - instrument-specific credit risk			(153)																		(6)						(159)						(128)																		(11)						(139)
Change in defined benefit plan related items not yet recognized in periodic benefit cost, net of reclassification adjustment			10																		1						11						18																		1						19
Foreign currency translation adjustment			8																		1						9						(3)																		1						(2)
Total other comprehensive income (loss), net of income taxes			(476)																		(5)						(481)						(869)																		(10)						(879)
Comprehensive income (loss)			89																		(5)						84						(87)																		(32)						(119)
Less: Comprehensive income (loss) attributable to the noncontrolling interest			140																		—						140						239																		—						239
Comprehensive income (loss) attributable to Holdings			$	(51)																	$	(5)					$	(56)					$	(326)																	$	(32)					$	(358)

			Three Months Ended June 30, 2024																		Six Months Ended June 30, 2024
			As Previously Reported						Impact of Revisions						As Revised						As Previously Reported						Impact of Revisions						As Revised
			(in millions)
Consolidated Statements of Equity:
Equity, beginning of period			$	3,755					$	(40)					$	3,715					$	4,388					$	(13)					$	4,375
Total Holdings’ equity, beginning of period			2,032						(40)						1,992						2,649						(13)						2,636
Retained earnings, beginning of year			10,110						(15)						10,095						10,243						7						10,250
Net income (loss) attributable to Holdings			428						—						428						542						(22)						520
Other			1						(1)						—						1						(1)						—
Retained earnings, end of period			10,317						(16)						10,301						10,317						(16)						10,301
Accumulated other comprehensive income (loss), beginning of year			(8,166)						(25)						(8,191)						(7,777)						(20)						(7,797)
Other comprehensive income (loss)			(479)						(5)						(484)						(868)						(10)						(878)
Accumulated other comprehensive income (loss), end of period			(8,645)						(30)						(8,675)						(8,645)						(30)						(8,675)
Total Holdings’ equity, end of period			1,644						(46)						1,598						1,644						(46)						1,598
Total equity, end of period			$	3,385					$	(46)					$	3,339					$	3,385					$	(46)					$	3,339

			Six Months Ended June 30, 2024
			As Previously Reported																		Impact of Revisions						As Revised
			(in millions)
Consolidated Statements of Cash Flows:
Cash flows from operating activities:
Net income (loss)			$	782																	$	(22)					$	760
Adjustments to reconcile Net income (loss) to Net cash provided by (used in) operating activities:
Interest credited to policyholders’ account balances			1,171																		7						1,178
Amortization and depreciation			429																		5						434
Remeasurement of liability for future policy benefits			(7)																		5						(2)
Change in market risk benefits			(1,233)																		13						(1,220)
Reinsurance recoverable			(626)																		(2)						(628)
Current and deferred income taxes			155																		(6)						149
Net cash provided by (used in) operating activities			$	923																	$	—					$	923

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- Definition

The entire disclosure for reporting error correction.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 7
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483443/250-10-50-7

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