Decrease in unrealized net capital gains and losses, after-tax

Notes to Condensed Consolidated Financial Statements  


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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Credit losses recognized in net income |
| ($ in millions) |  | Three months ended September 30, |  | Nine months ended September 30, |
|  | 2022 |  | 2021 |  | 2022 |  | 2021 |
| Assets |  |  |  |  |  |  |  |  |
| Fixed income securities: |  |   |  |   |  |   |  |   |
|  |  |  |  |  |  |  |  |  |
| Corporate |  | $ | (2) |  |  | $ | —  |  |  | $ | (6) |  |  | $ | —  |  |
| ABS |  | (2) |  |  | —  |  |  | (2) |  |  | 1  |  |
| Total fixed income securities |  | (4) |  |  | —  |  |  | (8) |  |  | 1  |  |
| Mortgage loans |  | 1  |  |  | —  |  |  | —  |  |  | 17  |  |
| Limited partnership interests |  | (1) |  |  | —  |  |  | (4) |  |  | —  |  |
| Other investments |  |  |  |  |  |  |  |  |
| Bank loans |  | (2) |  |  | (13) |  |  | (18) |  |  | (16) |  |
| Agent loans |  | —  |  |  | 1  |  |  | —  |  |  | —  |  |
| Total credit losses by asset type |  | $ | (6) |  |  | $ | (12) |  |  | $ | (30) |  |  | $ | 2  |  |
|  |  |  |  |  |  |  |  |  |
| Liabilities |  |  |  |  |  |  |  |  |
| Commitments to fund commercial mortgage loans and bank loans |  | —  |  |  | —  |  |  | —  |  |  | —  |  |
| Total  |  | $ | (6) |  |  | $ | (12) |  |  | $ | (30) |  |  | $ | 2  |  |



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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Unrealized net capital gains and losses included in AOCI |  |  |
| ($ in millions) |  | Fairvalue |  | Gross unrealized |  | Unrealized netgains (losses) |
| September 30, 2022 |  |  | Gains |  | Losses |  |
| Fixed income securities |  | $ | 41,715  |  |  | $ | 12  |  |  | $ | (3,765) |  |  | $ | (3,753) |  |
| Short-term investments |  | 4,030  |  |  | —  |  |  | (1) |  |  | (1) |  |
| Derivative instruments |  | —  |  |  | —  |  |  | (3) |  |  | (3) |  |
| Equity method of accounting (“EMA”) limited partnerships (1) |  |   |  |   |  |   |  | 7  |  |
| Unrealized net capital gains and losses, pre-tax |  |   |  |   |  |   |  | (3,750) |  |
| Other unrealized net capital gains and losses, pre-tax (2) |  |   |  |   |  |   |  | 32  |  |
| Deferred income taxes |  |   |  |   |  |   |  | 791  |  |
| Unrealized net capital gains and losses, after-tax |  |   |  |   |  |   |  | $ | (2,927) |  |
|  |  |  |  |  |  |  |  |  |
| December 31, 2021 |  |  |  |  |  |  |  |  |
| Fixed income securities |  | $ | 42,136  |  |  | $ | 1,002  |  |  | $ | (242) |  |  | $ | 760  |  |
| Short-term investments |  | 4,009  |  |  | —  |  |  | —  |  |  | —  |  |
| Derivative instruments  |  | —  |  |  | —  |  |  | (3) |  |  | (3) |  |
| EMA limited partnerships (1) |  |   |  |   |  |   |  | (1) |  |
| Unrealized net capital gains and losses, pre-tax |  |   |  |   |  |   |  | 756  |  |
| Other unrealized net capital gains and losses, pre-tax (2) |  |   |  |   |  |   |  | 5  |  |
| Deferred income taxes |  |   |  |   |  |   |  | (163) |  |
| Unrealized net capital gains and losses, after-tax |  |   |  |   |  |   |  | $ | 598  |  |

(1)Unrealized net capital gains and losses for limited partnership interests represent the Company’s share of EMA limited partnerships’ OCI. Fair value and gross unrealized gains and losses are not applicable.(2)Includes amounts recognized for the reclassification of unrealized gains and losses related to noncontrolling interest and the amount by which the amortization of DAC would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Change in unrealized net capital gains (losses) |  |  |  |  |  |  |  |  |  |  |
| ($ in millions) |  | Nine months ended September 30, 2022 |  |  |  |  |  |  |  |  |  |  |
| Fixed income securities |  | $ | (4,513) |  |  |  |  |  |  |  |  |  |  |  |
| Short-term investments |  | (1) |  |  |  |  |  |  |  |  |  |  |  |
| Derivative instruments |  | —  |  |  |  |  |  |  |  |  |  |  |  |
| EMA limited partnerships |  | 8  |  |  |  |  |  |  |  |  |  |  |  |
| Total |  | (4,506) |  |  |  |  |  |  |  |  |  |  |  |
| Other unrealized net capital gains and losses, pre-tax |  | 27  |  |  |  |  |  |  |  |  |  |  |  |
| Deferred income taxes |  | 954  |  |  |  |  |  |  |  |  |  |  |  |
| Decrease in unrealized net capital gains and losses, after-tax |  | $ | (3,525) |  |  |  |  |  |  |  |  |  |  |  |

Third Quarter 2022 Form 10-Q  15
