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Income Taxes Income Tax Expense (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Components of Income Tax Expense (Benefit)

Income tax expense (benefit) consists of the following:

			Successor									Predecessor
(In millions)			Year Ended December 31, 2022									Year Ended December 31, 2021						Year Ended December 31, 2020
Current			$	381								$	410					$	107
Deferred			(1,357)									(24)						178
Income tax expense (benefit)			$	(976)								$	386					$	285

Total income taxes were as follows:

			Successor									Predecessor
(In millions)			Year Ended December 31, 2022									Year Ended December 31, 2021						Year Ended December 31, 2020
Income tax expense (benefit)			$	(976)								$	386					$	285
Income tax expense (benefit) from OCI			(3,083)									(371)						413
Total income tax expense (benefit)			$	(4,059)								$	15					$	698

Schedule of Income before Income Tax

Income tax expense (benefit) was calculated based on the following income (loss) before income taxes by jurisdiction:

			Successor									Predecessor
(In millions)			Year Ended December 31, 2022									Year Ended December 31, 2021						Year Ended December 31, 2020
Bermuda			$	(3,425)								$	2,780					$	903
US			(3,627)									1,559						1,083
United Kingdom			(178)									(153)						220
Income (loss) before income taxes			$	(7,230)								$	4,186					$	2,206

Schedule of Effective Income Tax Rate Reconciliation

expected tax provision computed on pre-tax income was calculated using a weighted average tax rate as the sum of the pre-tax income in each jurisdiction multiplied by that jurisdiction’s applicable statutory tax rate. Statutory tax rates of 0%, 21% and 19% had been used for Bermuda, the US and the United Kingdom (UK), respectively. A reconciliation of the difference between the expected tax provision at the weighted average tax rate and income tax expense (benefit) is as follows:

			Successor									Predecessor
(In millions, except for percentages)			Year Ended December 31, 2022									Year Ended December 31, 2021						Year Ended December 31, 2020
Expected tax provision computed on pre-tax income (loss)			$	(1,518)								$	299					$	268
(Decrease) increase in income taxes resulting from:
Deferred tax valuation allowance			39									(2)						8
Non-deductible expenses			1									19						5
Prior year true-up			48									4						(4)
Corporate owned life insurance			—									52						(6)
Stock compensation expense			9									2						—
Noncontrolling interests			443									—						—
Other			2									12						14
Income tax expense (benefit)			$	(976)								$	386					$	285
Effective tax rate			13		%							9		%				13		%

During the third quarter of 2021, we recorded an out-of-period adjustment that affected the consolidated statements of income (loss). The adjustment related to the correction of errors in jurisdictional income, which resulted in the misstatement of income tax expense. The adjustment understated income tax expense for the year ended December 31, 2021 by $63 million. We evaluated the out-of-period adjustment and determined it was not material to the consolidated financial statements for the year ended December 31, 2021, or any other previously reported period.

Schedule of Gross Current and Deferred Tax Assets and Liabilities

Current and deferred income tax assets and liabilities were as follows:

			Successor									Predecessor
(In millions)			December 31, 2022									December 31, 2021
Current income tax recoverable			$	272								$	2
Current income tax payable			—									169
Net current income tax recoverable (payable)			$	272								$	(167)
Deferred tax assets			$	5,913								$	—
Deferred tax liabilities			34									576
Net deferred tax assets (liabilities)			$	5,879								$	(576)

Schedule of Deferred Tax Assets and Liabilities

Deferred income tax assets and liabilities consisted of the following:

			Successor									Predecessor
(In millions)			December 31, 2022									December 31, 2021
Deferred tax assets
Insurance liabilities			$	2,668								$	2,169
Net unrealized losses on AFS			3,083									—
Net operating and capital loss carryforwards			185									60
Investments, including derivatives			282									—
Employee benefits			8									22
Investment in foreign subsidiaries			1,011									—
Other			74									39
Total deferred tax assets			7,311									2,290
Valuation allowance			(105)									(66)
Deferred tax assets, net of valuation allowance			7,206									2,224
Deferred tax liabilities
Investments, including derivatives			—									974
Intangible assets			379									—
Net unrealized gains on AFS			—									626
DAC, DSI and VOBA			946									1,026
Other			2									174
Total deferred tax liabilities			1,327									2,800
Net deferred tax assets (liabilities)			$	5,879								$	(576)

Summary of Valuation Allowance

The valuation allowance consists of the following:

			Successor									Predecessor
(In millions)			December 31, 2022									December 31, 2021
US federal and state net operating losses and other deferred tax assets			$	16								$	30
UK net operating losses and other deferred tax assets			89									36
Total valuation allowance			$	105								$	66

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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