Revision to Prior Period Financial Statements

12 Months Ended

Dec. 31, 2024

REVISION TO PRIOR PERIOD FINANCIAL STATEMENTS

Revision to Financial Statements as of and for the Years Ended December 31, 2023 and 2022

The Company identified multiple errors which impacted the previously issued Consolidated Financial Statements for the years ended December 31, 2023 and 2022. Certain reinsurance recoverable balances associated with the coinsurance with funds withheld of fixed indexed annuities, certain deferred acquisition cost balances associated with indexed variable annuities, and certain other immaterial items were not properly accounted for. Prior period amounts have been revised in the Consolidated Financial Statements to correct these errors as shown below.

Management assessed the materiality of the misstatements described above on prior period Consolidated Financial Statements in accordance with SEC Staff Accounting Bulletin ("SAB") No. 99, Materiality, codified in ASC 250-10, Accounting Changes and Error Corrections ("ASC 250"), and concluded that these misstatements were not material to the current period and any prior periods. However, management determined it was appropriate to correctly present and revise the Consolidated Financial Statements as of and for the years ended December 31, 2023 and 2022. The Consolidated Financial Statements for the impacted interim periods during 2024 will be revised when they are presented within the Quarterly Report on Form 10-Q for the interim periods in 2025.

The following are the impacted line items from the Consolidated Financial Statements illustrating the effects of the revisions:

Consolidated Statements of Financial Position


	December 31, 2023
	As Previously Reported		Adjustments		As Revised
	(in thousands)
ASSETS
Deferred policy acquisition costs	$	7,097,511	$	47,225	$	7,144,736
Reinsurance recoverables and deposit receivables(1)	40,348,313		(91,513)		40,256,800
Income tax assets	1,737,651		4,934		1,742,585
TOTAL ASSETS	$	213,309,041	$	(39,354)	$	213,269,687
LIABILITIES AND EQUITY
LIABILITIES
Policyholders’ account balances	$	53,012,800	$	(26,100)	$	52,986,700
Market risk benefit liabilities	5,144,401		12,457		5,156,858
Reinsurance and funds withheld payables(1)	2,746,129		(7,150)		2,738,979
Total liabilities	208,787,616		(20,793)		208,766,823
EQUITY
Retained earnings / (accumulated deficit)	(532,951)		(18,520)		(551,471)
Accumulated other comprehensive income (loss)	(30,920)		(41)		(30,961)
Total equity	4,521,425		(18,561)		4,502,864
TOTAL LIABILITIES AND EQUITY	$	213,309,041	$	(39,354)	$	213,269,687

(1) As previously reported balances have been updated to conform to the current period presentation.

Consolidated Statements of Operations and Comprehensive Income (Loss)


	Year Ended December 31, 2023
	As Previously Reported		Adjustments		As Revised
	(in thousands)
REVENUES
Other income (loss)	$	744,628	$	6,735	$	751,363
Realized investment gains (losses), net	(1,083,660)		(63,439)		(1,147,099)
Change in value of market risk benefits, net of related hedging gains (losses)	(94,368)		(12,405)		(106,773)
TOTAL REVENUES	3,340,575		(69,109)		3,271,466
BENEFITS AND EXPENSES
Interest credited to policyholders’ account balances	655,445		(33,800)		621,645
Amortization of deferred policy acquisition costs	534,435		5,075		539,510
General, administrative and other expenses	1,151,452		(26,529)		1,124,923
TOTAL BENEFITS AND EXPENSES	2,849,073		(55,254)		2,793,819
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF OPERATING JOINT VENTURE	491,502		(13,855)		477,647
Income tax expense (benefit)	29,378		(2,910)		26,468
NET INCOME (LOSS) ATTRIBUTABLE TO PRUCO LIFE INSURANCE COMPANY	$	461,203	$	(10,945)	$	450,258
Other comprehensive income (loss), before tax:
Gain (loss) from changes in nonperformance risk on market risk benefits	(659,875)		(52)		(659,927)
Total	(26,482)		(52)		(26,534)
Less: Income tax expense (benefit) related to other comprehensive income (loss)	(5,627)		(11)		(5,638)
Other comprehensive income (loss), net of taxes	(20,855)		(41)		(20,896)
Comprehensive income (loss)	440,836		(10,986)		429,850


	Year Ended December 31, 2022
	As Previously Reported		Adjustments		As Revised
	(in thousands)
REVENUES
Other income (loss)	$	(651,469)	$	15,196	$	(636,273)
Realized investment gains (losses), net	336,382		(46,453)		289,929
TOTAL REVENUES	1,648,324		(31,257)		1,617,067
BENEFITS AND EXPENSES
Amortization of deferred policy acquisition costs	520,276		993		521,269
General, administrative and other expenses	1,156,464		(26,764)		1,129,700
TOTAL BENEFITS AND EXPENSES	2,635,427		(25,771)		2,609,656
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF OPERATING JOINT VENTURE	(987,103)		(5,486)		(992,589)
Income tax expense (benefit)	(295,535)		(1,152)		(296,687)
NET INCOME (LOSS) ATTRIBUTABLE TO PRUCO LIFE INSURANCE COMPANY	$	(766,705)	$	(4,334)	$	(771,039)
Comprehensive income (loss)	(1,173,224)		(4,334)		(1,177,558)

Consolidated Statements of Equity


	Retained Earnings						AOCI						Total Equity
	As Previously Reported		Adjustments		As Revised		As Previously Reported		Adjustments		As Revised		As Previously Reported		Adjustments		As Revised
	(in thousands)
Balance, December 31, 2021	$	(227,449)	$	(3,241)	$	(230,690)	$	396,454	$	0	$	396,454	$	6,213,996	$	(3,241)	$	6,210,755
Comprehensive income (loss):
Net income (loss)	(766,705)		(4,334)		(771,039)								(766,705)		(4,334)		(771,039)
Total comprehensive income (loss)	(766,705)		(4,334)		(771,039)		(406,519)		0		(406,519)		(1,173,224)		(4,334)		(1,177,558)
Balance, December 31, 2022	$	(994,154)	$	(7,575)	$	(1,001,729)	$	(10,065)	$	0	$	(10,065)	$	5,036,195	$	(7,575)	$	5,028,620
Comprehensive income (loss):
Net income (loss)	461,203		(10,945)		450,258								461,691		(10,945)		450,746
Other comprehensive income (loss), net of taxes							(20,855)		(41)		(20,896)		(20,855)		(41)		(20,896)
Total comprehensive income (loss)	461,203		(10,945)		450,258		(20,855)		(41)		(20,896)		440,836		(10,986)		429,850
Balance, December 31, 2023	$	(532,951)	$	(18,520)	$	(551,471)	$	(30,920)	$	(41)	$	(30,961)	$	4,521,425	$	(18,561)	$	4,502,864

Consolidated Statements of Cash Flows


	Year Ended December 31, 2023
	As Previously Reported		Adjustments		As Revised
	(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	461,691	$	(10,945)	$	450,746
Interest credited to policyholders' account balances	655,445		(33,800)		621,645
Realized investment (gains) losses, net	1,083,660		63,439		1,147,099
Change in value of market risk benefits, net of related hedging (gains) losses	94,368		12,405		106,773
Change in:
Reinsurance related balances(1)	(671,990)		(6,735)		(678,725)
Deferred policy acquisition costs	(560,471)		(21,454)		(581,925)
Income taxes	(37,886)		(2,910)		(40,796)
Cash flows from (used in) operating activities	2,459,895		0		2,459,895


	Year Ended December 31, 2022
	As Previously Reported		Adjustments		As Revised
	(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(766,705)	$	(4,334)	$	(771,039)
Realized investment (gains) losses, net	(336,382)		46,453		(289,929)
Change in:
Reinsurance related balances(1)	(1,771,655)		(15,196)		(1,786,851)
Deferred policy acquisition costs	(442,303)		(25,771)		(468,074)
Income taxes	(334,769)		(1,152)		(335,921)
Cash flows from (used in) operating activities	1,824,964		0		1,824,964

(1) As previously reported balances have been updated to conform to the current period presentation.