Adoption of ASU 2018-12 (Tables)

12 Months Ended

Dec. 31, 2022

Cumulative Effect Adjustments to Components of Stockholders' Equity



							Total
	Retained						Stockholders’
	Earnings			AOCI			Equity
Shadow impacts:
DAC, VOBA, DSI and DFEL	$	-		$	2,271		$	2,271
Additional liabilities for other
insurance benefits		-			1,197			1,197
LFPB and Other ⁽¹⁾		(187	)		(1,715	)		(1,902	)
MRBs ⁽²⁾		(6,086	)		2,874			(3,212	)
Total	$	(6,273	)	$	4,627		$	(1,646	)

⁽¹⁾Includes impacts to reserves and ceded reserves reported within future contract benefits and reinsurance recoverables, respectively on the Consolidated Balance Sheets, excluding shadow impacts on additional liabilities for other insurance benefits.

⁽²⁾Includes impacts related to MRB assets and MRB liabilities reported on the Consolidated Balance Sheets, and ceded MRBs reported within other assets on the Consolidated Balance Sheets.

Effect of Accounting Adoption to Consolidated Balance Sheets



							Total
	Retained						Stockholders’
	Earnings			AOCI			Equity
DAC, VOBA and DSI	$	-		$	6,079		$	6,079
Reinsurance recoverables		607			2,431			3,038
Other assets ⁽¹⁾		242			-			242
Future contract benefits		(844	)		(3,088	)		(3,932	)
MRBs, net		(7,956	)		3,656			(4,300	)
DFEL		-			(3,190	)		(3,190	)
Other liabilities ⁽²⁾		1,678			(1,261	)		417
Total	$	(6,273	)	$	4,627		$	(1,646	)

⁽¹⁾Consists primarily of ceded MRB adjustments.

⁽²⁾Consists of state and federal tax adjustments.

Summary of Changes in DAC, VOBA and DSI



			Impact from
	Balance		Removal of		Balance
	Pre-Adoption		Shadow		Post-Adoption
	December 31,		Balances		January 1,
	2020		from AOCI		2021
DAC
Traditional Life	$	1,082	$	-	$	1,082
UL and Other		394		5,031		5,425
Variable Annuities		3,518		52		3,570
Fixed Annuities		264		215		479
Group Protection		187		-		187
Retirement Plan Services		120		112		232
Total DAC		5,565		5,410		10,975

VOBA
Traditional Life		67		-		67
UL and Other		180		630		810
Fixed Annuities		-		23		23
Total VOBA		247		653		900

DSI ⁽¹⁾
UL and Other		35		-		35
Variable Annuities		148		2		150
Fixed Annuities		17		13		30
Retirement Plan Services		13		1		14
Total DSI		213		16		229
Total DAC, VOBA and DSI	$	6,025	$	6,079	$	12,104

⁽¹⁾Pre-adoption DSI balance was previously reported in other assets on the Consolidated Balance Sheets.

Summary of Changes in DFEL



			Impact from
	Balance		Removal of		Balance
	Pre-Adoption		Shadow		Post-Adoption
	December 31,		Balances		January 1,
	2020		from AOCI		2021
DFEL ⁽¹⁾
UL and Other	$	113	$	3,185	$	3,298
Variable Annuities		288		5		293
Total DFEL	$	401	$	3,190	$	3,591

⁽¹⁾Pre-adoption DFEL balance was previously reported in other contract holder funds on the Consolidated Balance Sheets.

Summary of Changes in Future Contract Benefits



			Impact from			Single-A
	Balance		Removal of			Discount		Cumulative		Balance
	Pre-Adoption		Shadow			Rate		Effect to		Post-Adoption
	December 31,		Balances			Measurement		Retained		January 1,
	2020 ⁽¹⁾		from AOCI			in AOCI		Earnings		2021
LFPB
Traditional Life	$	3,483	$	-		$	943	$	-	$	4,426
Payout Annuities		2,314		(105	)		415		44		2,668
Liability for Future Claims
Group Protection		5,422		-			517		-		5,939
Additional Liabilities for Other
Insurance Benefits
UL and Other		13,649		(1,515	)		-		174		12,308
Other Operations ⁽²⁾		10,463		(80	)		2,913		626		13,922
Other ⁽³⁾		3,565		-			-		-		3,565
Total future contract benefits	$	38,896	$	(1,700	)	$	4,788	$	844	$	42,828

⁽¹⁾Balance pre-adoption excludes features that meet the definition of an MRB upon transition, including features that were previously accounted for as an additional liability. Also, balance pre-adoption reflects certain reclassifications of non-life contingent account balances from future contract benefits to policyholder account balances within the Consolidated Balance Sheets.

⁽²⁾Represents future contract benefits reported in Other Operations primarily attributable to the indemnity reinsurance agreements with Protective ($6.3 billion and $7.4 billion as of December 31, 2020, and January 1, 2021, respectively) and Swiss Re ($2.0 billion and $3.5 billion as of December 31, 2020, and January 1, 2021, respectively). Includes LFPB and additional liabilities balances.

⁽³⁾Represents other miscellaneous reserves outside the scope of ASU 2018-12.

Summary of Changes in Reinsurance Recoverables



			Single-A
	Balance		Discount		Cumulative			Balance
	Pre-Adoption		Rate		Effect to			Post-Adoption
	December 31,		Measurement		Retained			January 1,
	2020 ⁽¹⁾		in AOCI		Earnings			2021
Reinsured LFPB
Traditional Life	$	755	$	151	$	-		$	906
Payout Annuities		2		-		-			2
Reinsured Liability for Future
Claims
Group Protection		148		14		-			162
Reinsured Additional Liabilities
for Other Insurance Benefits
UL and Other		335		-		(3	)		332
Reinsured Other Operations ⁽²⁾		14,320		2,266		610			17,196
Reinsured Other ⁽³⁾		790		-		-			790
Total reinsurance recoverables	$	16,350	$	2,431	$	607		$	19,388

⁽¹⁾Balance pre-adoption excludes features that meet the definition of a ceded MRB upon transition, including features that were previously accounted for as reinsured additional liabilities.

⁽²⁾Represents reinsurance recoverables reported in Other Operations primarily attributable to the indemnity reinsurance agreements with Protective ($12.0 billion and $13.2 billion as of December 31, 2020, and January 1, 2021, respectively) and Swiss Re ($1.3 billion and $2.6 billion as of December 31, 2020, and January 1, 2021, respectively). Includes reinsured LFPB and reinsured additional liabilities balances.

⁽³⁾Represents other miscellaneous reinsurance recoverables outside the scope of ASU 2018-12.

Summary of Changes in Net Liability Position of MRBs




	Balance		Cumulative			Cumulative			Balance
	Pre-Adoption		Effect of			Effect to			Post-Adoption
	December 31,		Credit Risk			Retained			January 1,
	2020⁽¹⁾		to AOCI			Earnings			2021
MRBs, Net
Variable Annuities	$	831	$	(3,592	)	$	7,968		$	5,207
Fixed Annuities		192		(52	)		(22	)		118
Retirement Plan Services		11		(12	)		10			9
Total MRBs, net	$	1,034	$	(3,656	)	$	7,956		$	5,334

⁽¹⁾Balance pre-adoption includes all features that meet the definition of an MRB upon transition, including features that were previously accounted for as additional liabilities or embedded derivatives.

Summary of Changes in Net Asset Position of Ceded MRBs




	Balance		Cumulative		Balance
	Pre-Adoption		Effect to		Post-Adoption
	December 31,		Retained		January 1,
	2020⁽¹⁾		Earnings		2021
Ceded MRBs, Net
Variable Annuities	$	215	$	121	$	336
Total ceded MRBs, net	$	215	$	121	$	336

⁽¹⁾Balance pre-adoption includes all features that meet the definition of a ceded MRB upon transition, including features that were previously accounted for as reinsured additional liabilities or embedded derivatives.

Adoption of New Accounting Standard Effect on Financial Statements

The following summarizes the effect of the adoption of ASU 2018-12 (in millions) on certain financial statement line items within the previously reported Consolidated Balance Sheets:



	As of December 31, 2022									As of December 31, 2021
				Adoption								Adoption
	As			of New						As		of New
	Previously			Accounting			As			Previously		Accounting			As
	Reported ⁽¹⁾			Standard			Adjusted			Reported ⁽¹⁾		Standard			Adjusted
Deferred acquisition costs, value of business
acquired and deferred sales inducements ⁽²⁾	$	13,803		$	(1,568	)	$	12,235		$	6,286	$	5,610		$	11,896
Reinsurance recoverables, net of allowance for
credit losses		19,882			(439	)		19,443			20,295		2,091			22,386
Market risk benefit assets		-			2,807			2,807			-		1,888			1,888
Other assets ⁽²⁾		20,493			(1,691	)		18,802			18,316		(1,784	)		16,532
Total assets		335,108			(891	)		334,217			386,945		7,805			394,750
Future contract benefits ⁽²⁾		41,756			(2,930	)		38,826			40,687		738			41,425
Market risk benefit liabilities		-			2,078			2,078			-		4,399			4,399
Deferred front-end loads ⁽²⁾		5,669			(617	)		5,052			415		3,810			4,225
Other liabilities ⁽²⁾		11,976			45			12,021			16,708		(303	)		16,405
Total liabilities		330,539			(1,424	)		329,115			366,191		8,644			374,835
Retained earnings		6,707			(783	)		5,924			9,578		(4,382	)		5,196
Accumulated other comprehensive income (loss)		(7,668	)		1,316			(6,352	)		6,441		3,543			9,984
Total stockholders’ equity		4,569			533			5,102			20,754		(839	)		19,915

⁽¹⁾The amounts as previously reported were derived from our Annual Report on Form 10-K/A for the year ended December 31, 2022, filed on March 30, 2023, and disclosed in “Impacts to our Consolidated Financial Statements Related to the Restatement of Previously Issued Consolidated Financial Statements and the Adoption of ASU 2018-12” in Note 1.

⁽²⁾Certain amounts have been reclassified to conform to the presentation adopted in the current period.

The following summarizes the effect of the adoption of ASU 2018-12 (in millions, except per share data) on certain financial statement line items within the previously reported Consolidated Statements of Comprehensive Income (Loss):



	For the Year Ended December 31, 2022									For the Year Ended December 31, 2021
				Adoption									Adoption
	As			of New						As			of New
	Previously			Accounting			As			Previously			Accounting			As
	Reported ⁽¹⁾			Standard			Adjusted			Reported ⁽¹⁾			Standard			Adjusted
Fee income	$	6,054		$	(451	)	$	5,603		$	6,905		$	(866	)	$	6,039
Realized gain (loss)		345			495			840			414			(1,281	)		(867	)
Total revenues		18,766			44			18,810			19,862			(2,147	)		17,715
Benefits		12,546			(4,067	)		8,479			8,529			(26	)		8,503
Interest credited		2,870			7			2,877			2,933			(4	)		2,929
Market risk benefit (gain) loss		-			(3,246	)		(3,246	)		-			(3,753	)		(3,753	)
Policyholder liability remeasurement (gain) loss		-			2,766			2,766			-			(183	)		(183	)
Commissions and other expenses		5,096			29			5,125			5,794			(575	)		5,219
Total expenses		21,596			(4,511	)		17,085			17,613			(4,541	)		13,072
Income (loss) before taxes		(2,830	)		4,555			1,725			2,249			2,394			4,643
Federal income tax expense (benefit)		(589	)		956			367			362			503			865
Net income (loss)		(2,241	)		3,599			1,358			1,887			1,891			3,778
Other comprehensive income (loss),
net of tax:
Unrealized investment gain (loss)		(14,030	)		(4,029	)		(18,059	)		(2,535	)		(752	)		(3,287	)
Market risk benefit non-performance risk
gain (loss)		-			(210	)		(210	)		-			(923	)		(923	)
Policyholder liability discount rate
remeasurement gain (loss)		-			2,012			2,012			-			591			591
Total other comprehensive income (loss),
net of tax		(14,109	)		(2,227	)		(16,336	)		(2,490	)		(1,084	)		(3,574	)
Comprehensive income (loss)		(16,350	)		1,372			(14,978	)		(603	)		807			204
Net income (loss) per common share:
Basic		(13.11	)		21.04			7.93			10.07			10.10			20.17
Diluted		(13.19	)		20.97			7.78			9.98			9.98			19.96