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REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS | 9 Months Ended
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Sep. 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.
|  |  | September 30, 2024
|  |  |  |  |  |  |  |  |  |  | As Previously Reported |  |  |  |  |  | Impact of Revisions |  | As Revised
|  |  |  |  |  |  |  |  |  |  | (in millions)
Consolidated Balance Sheets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amounts due from reinsurers |  |  |  |  |  |  |  |  |  |  | $ | 8,222 |  |  |  |  |  |  | $ | (154) |  |  | $ | 8,068 |
Current and deferred income taxes |  |  |  |  |  |  |  |  |  |  | 1,701 |  |  |  |  |  |  | 6 |  |  | 1,707 |
Total Assets |  |  |  |  |  |  |  |  |  |  | $ | 298,989 |  |  |  |  |  |  | $ | (148) |  |  | $ | 298,841 |
LIABILITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Policyholders’ account balances |  |  |  |  |  |  |  |  |  |  | $ | 107,433 |  |  |  |  |  |  | $ | (29) |  |  | $ | 107,404 |
Amounts due to reinsurers |  |  |  |  |  |  |  |  |  |  | 1,421 |  |  |  |  |  |  | 5 |  |  | 1,426 |
Other liabilities |  |  |  |  |  |  |  |  |  |  | 6,645 |  |  |  |  |  |  | (105) |  |  | 6,540 |
Total Liabilities |  |  |  |  |  |  |  |  |  |  | 292,791 |  |  |  |  |  |  | (129) |  |  | 292,662 |
EQUITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retained earnings |  |  |  |  |  |  |  |  |  |  | 9,977 |  |  |  |  |  |  | (13) |  |  | 9,964 |
Accumulated other comprehensive income (loss) |  |  |  |  |  |  |  |  |  |  | (6,595) |  |  |  |  |  |  | (6) |  |  | (6,601) |
Total equity attributable to Holdings |  |  |  |  |  |  |  |  |  |  | 3,220 |  |  |  |  |  |  | (19) |  |  | 3,201 |
Total Equity |  |  |  |  |  |  |  |  |  |  | 4,975 |  |  |  |  |  |  | (19) |  |  | 4,956 |
Total Equity and Redeemable NCI |  |  |  |  |  |  |  |  |  |  | 6,198 |  |  |  |  |  |  | (19) |  |  | 6,179 |
Total Liabilities, Redeemable Noncontrolling Interest and Equity |  |  |  |  |  |  |  |  |  |  | $ | 298,989 |  |  |  |  |  |  | $ | (148) |  |  | $ | 298,841 |
| Three Months Ended September 30, 2024 |  | Nine Months Ended September 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 | $ | 313 |  |  |  |  |  |  | $ | (1) |  |  | $ | 312 |  |  | $ | 870 |  |  |  |  |  |  | $ | 9 |  |  | $ | 879 |
Net investment income (loss) | 1,309 |  |  |  |  |  |  | (1) |  |  | 1,308 |  |  | 3,694 |  |  |  |  |  |  | (9) |  |  | 3,685 |
Other income | 301 |  |  |  |  |  |  | (1) |  |  | 300 |  |  | 989 |  |  |  |  |  |  | (6) |  |  | 983 |
Total revenues | 3,076 |  |  |  |  |  |  | (3) |  |  | 3,073 |  |  | 8,816 |  |  |  |  |  |  | (6) |  |  | 8,810 |
BENEFITS AND OTHER DEDUCTIONS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Remeasurement of liability for future policy benefits | 16 |  |  |  |  |  |  | (17) |  |  | (1) |  |  | 9 |  |  |  |  |  |  | (12) |  |  | (3) |
Change in market risk benefits and purchased market risk benefits | 79 |  |  |  |  |  |  | 18 |  |  | 97 |  |  | (1,154) |  |  |  |  |  |  | 31 |  |  | (1,123) |
Interest credited to policyholders’ account balances | 708 |  |  |  |  |  |  | (7) |  |  | 701 |  |  | 1,879 |  |  |  |  |  |  | — |  |  | 1,879 |
Total benefits and other deductions | 3,090 |  |  |  |  |  |  | (6) |  |  | 3,084 |  |  | 7,902 |  |  |  |  |  |  | 19 |  |  | 7,921 |
Income (loss) from continuing operations, before income taxes | (14) |  |  |  |  |  |  | 3 |  |  | (11) |  |  | 914 |  |  |  |  |  |  | (25) |  |  | 889 |
Income tax (expense) benefit | 40 |  |  |  |  |  |  | (1) |  |  | 39 |  |  | (106) |  |  |  |  |  |  | 5 |  |  | (101) |
Net income (loss) | 26 |  |  |  |  |  |  | 2 |  |  | 28 |  |  | 808 |  |  |  |  |  |  | (20) |  |  | 788 |
Net income (loss) attributable to Holdings | (134) |  |  |  |  |  |  | 2 |  |  | (132) |  |  | 408 |  |  |  |  |  |  | (20) |  |  | 388 |
Net income (loss) available to Holdings’ common shareholders | $ | (148) |  |  |  |  |  |  | $ | 2 |  |  | $ | (146) |  |  | $ | 354 |  |  |  |  |  |  | $ | (20) |  |  | $ | 334 |
EARNINGS PER COMMON SHARE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic | $ | (0.47) |  |  |  |  |  |  | $ | 0.01 |  |  | $ | (0.46) |  |  | $ | 1.09 |  |  |  |  |  |  | $ | (0.06) |  |  | $ | 1.03 |
Diluted | $ | (0.47) |  |  |  |  |  |  | $ | 0.01 |  |  | $ | (0.46) |  |  | $ | 1.08 |  |  |  |  |  |  | $ | (0.06) |  |  | $ | 1.02 |
| Three Months Ended September 30, 2024 |  | Nine Months Ended September 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) | $ | 26 |  |  |  |  |  |  | $ | 2 |  |  | $ | 28 |  |  | $ | 808 |  |  |  |  |  |  | $ | (20) |  |  | $ | 788 |
Other comprehensive income (loss) net of income taxes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Change in unrealized gains (losses), net of reclassification adjustment | 2,255 |  |  |  |  |  |  | 1 |  |  | 2,256 |  |  | 1,334 |  |  |  |  |  |  | — |  |  | 1,334 |
Change in market risk benefits - instrument-specific credit risk | (5) |  |  |  |  |  |  | 25 |  |  | 20 |  |  | (133) |  |  |  |  |  |  | 14 |  |  | (119) |
Change in defined benefit plan related items not yet recognized in periodic benefit cost, net of reclassification adjustment | 11 |  |  |  |  |  |  | (1) |  |  | 10 |  |  | 29 |  |  |  |  |  |  | — |  |  | 29 |
Foreign currency translation adjustment | 20 |  |  |  |  |  |  | (1) |  |  | 19 |  |  | 17 |  |  |  |  |  |  | — |  |  | 17 |
Total other comprehensive income (loss), net of income taxes | 2,058 |  |  |  |  |  |  | 24 |  |  | 2,082 |  |  | 1,189 |  |  |  |  |  |  | 14 |  |  | 1,203 |
Comprehensive income (loss) | 2,084 |  |  |  |  |  |  | 26 |  |  | 2,110 |  |  | 1,997 |  |  |  |  |  |  | (6) |  |  | 1,991 |
Comprehensive income (loss) attributable to Holdings | $ | 1,916 |  |  |  |  |  |  | $ | 26 |  |  | $ | 1,942 |  |  | $ | 1,590 |  |  |  |  |  |  | $ | (6) |  |  | $ | 1,584 |
| Three Months Ended September 30, 2024 |  | Nine Months Ended September 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 | $ | 3,385 |  |  | $ | (46) |  |  | $ | 3,339 |  |  | $ | 4,388 |  |  | $ | (13) |  |  | $ | 4,375 |
Total Holdings’ equity, beginning of period | 1,644 |  |  | (46) |  |  | 1,598 |  |  | 2,649 |  |  | (13) |  |  | 2,636 |
Retained earnings, beginning of year | 10,317 |  |  | (16) |  |  | 10,301 |  |  | 10,243 |  |  | 7 |  |  | 10,250 |
Net income (loss) attributable to Holdings | (134) |  |  | 2 |  |  | (132) |  |  | 408 |  |  | (20) |  |  | 388 |
Other | (2) |  |  | 1 |  |  | (1) |  |  | (1) |  |  | — |  |  | (1) |
Retained earnings, end of period | 9,977 |  |  | (13) |  |  | 9,964 |  |  | 9,977 |  |  | (13) |  |  | 9,964 |
Accumulated other comprehensive income (loss), beginning of year | (8,645) |  |  | (30) |  |  | (8,675) |  |  | (7,777) |  |  | (20) |  |  | (7,797) |
Other comprehensive income (loss) | 2,050 |  |  | 24 |  |  | 2,074 |  |  | 1,182 |  |  | 14 |  |  | 1,196 |
Accumulated other comprehensive income (loss), end of period | (6,595) |  |  | (6) |  |  | (6,601) |  |  | (6,595) |  |  | (6) |  |  | (6,601) |
Total Holdings’ equity, end of period | 3,220 |  |  | (19) |  |  | 3,201 |  |  | 3,220 |  |  | (19) |  |  | 3,201 |
Total equity, end of period | $ | 4,975 |  |  | $ | (19) |  |  | $ | 4,956 |  |  | $ | 4,975 |  |  | $ | (19) |  |  | $ | 4,956 |
|  |  | Nine Months Ended September 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) |  |  |  |  |  |  |  |  |  |  | $ | 808 |  |  |  |  |  |  | $ | (20) |  |  | $ | 788 |
Adjustments to reconcile Net income (loss) to Net cash provided by (used in) operating activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortization and depreciation |  |  |  |  |  |  |  |  |  |  | 640 |  |  |  |  |  |  | 6 |  |  | 646 |
Remeasurement of liability for future policy benefits |  |  |  |  |  |  |  |  |  |  | 9 |  |  |  |  |  |  | (12) |  |  | (3) |
Change in market risk benefits |  |  |  |  |  |  |  |  |  |  | (1,154) |  |  |  |  |  |  | 31 |  |  | (1,123) |
Reinsurance recoverable |  |  |  |  |  |  |  |  |  |  | (612) |  |  |  |  |  |  | (2) |  |  | (614) |
Current and deferred income taxes |  |  |  |  |  |  |  |  |  |  | 181 |  |  |  |  |  |  | (5) |  |  | 176 |
Other, net |  |  |  |  |  |  |  |  |  |  | 255 |  |  |  |  |  |  | 2 |  |  | 257 |
Net cash provided by (used in) operating activities |  |  |  |  |  |  |  |  |  |  | $ | 1,606 |  |  |  |  |  |  | $ | — |  |  | $ | 1,606 |

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