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  • Jackson Announces Fourth Quarter and Full Year 2022 Results

    March 1, 2023 by Jackson

    LANSING, Mich.–(BUSINESS WIRE)–Jackson Financial Inc. (NYSE: JXN) (Jackson®) today announced financial results for the fourth quarter and full year ended December 31, 2022.

    Fourth Quarter Highlights

    • Net income (loss) attributable to Jackson Financial Inc. of $(710) million, or $(8.48) per diluted share, including the impact of non-economic hedging results under GAAP accounting
    • Adjusted operating earnings1 of $491 million, or $5.66 per diluted share, down 31% from the fourth quarter of 2021
    • Returned $86 million to shareholders in the fourth quarter of 2022 through $38 million of share repurchases and $48 million in dividends
    • Fourth quarter registered index-linked annuity (RILA) sales of $560 million, up from $108 million in the fourth quarter of 2021
    • Total annuity account value of $209 billion decreased 19% from the fourth quarter of 2021, driven largely by lower equity markets in 2022

    Full Year 2022 Highlights

    • Net income attributable to Jackson Financial Inc. of $5,697 million, or $64.23 per diluted share, including the impact of non-economic hedging results under GAAP accounting
    • Adjusted operating earnings of $1,443 million, or $16.27 per diluted share
    • Successful first full-year for RILA with sales of $1.8 billion
    • Full year capital return of $482 million was above the midpoint of the 2022 capital return target range of $425-$525 million
    • Strong capital position at the operating company level, with a Risk Based Capital (RBC) ratio at Jackson National Life Insurance Company of 544% as of year-end 2022
    • Cash and highly liquid securities at the holding company of approximately $675 million at the end of the year, which was significantly above Jackson’s targeted minimum liquidity buffer
    • Financial leverage ratio1 of 18.3%, below the targeted long-term range of 20-25%

    2023 Announcements

    • Increasing first quarter 2023 dividend by nearly 13% to $0.62 per share
    • Announcing a $450 million increase to the existing share repurchase authorization
    • Establishing a 2023 capital return target of $450-$550 million

    Laura Prieskorn, President and Chief Executive Officer of Jackson, stated, “Jackson’s fourth quarter and full year 2022 results highlight our continued momentum as we have met or exceeded all of our 2022 financial targets and created value for our shareholders. We entered 2023 with a strong statutory capital position following three straight quarters of RBC ratio growth, robust levels of excess cash at the holding company, and reported leverage below our targeted long-term range. Our healthy and profitable book of business positions us well on our long-term mission of providing financial freedom for life and gives us the confidence to establish a $450 to $550 million capital return target in 2023.”

    Consolidated Fourth Quarter and Full Year 2022 Results

    Fourth Quarter 2022

    The company reported net income (loss) attributable to Jackson Financial Inc. of $(710) million, or $(8.48) per diluted share for the three months ended December 31, 2022, compared to $585 million, or $6.19 per diluted share for the three months ended December 31, 2021. The current quarter net loss primarily reflects a larger net hedging loss versus a year ago, driven by higher freestanding derivative losses resulting from comparatively stronger equity market returns in the current quarter. The change in the reported fair value of derivatives is not expected to match the change in hedged liabilities on a U.S. GAAP basis period-to-period, which can result in net income volatility. We believe adjusted operating earnings better represents the underlying performance of our business as the figure excludes, among other things, changes in fair value of freestanding and embedded derivative instruments tied to market volatility. Additionally, net income in the fourth quarter reflects a $474 million loss from business reinsured to third parties, while the prior year’s fourth quarter included a loss of $36 million. These figures include the gain/loss on a funds withheld reinsurance treaty and the related net investment income, which do not impact our statutory capital or free cash flow and can be volatile quarter to quarter.

    Adjusted operating earnings for the three months ended December 31, 2022 were $491 million, or $5.66 per diluted share, compared to $707 million or $7.48 per diluted share, for the three months ended December 31, 2021. The decline in adjusted operating earnings was primarily the result of lower fee income due to lower average separate account balances, and decreased net investment income due to lower levels of investment income on private equity and other limited partnership investments in the current quarter. These were partially offset by lower deferred acquisition costs (DAC) amortization, general and administrative expenses, and agent asset-based trail commissions in the current quarter.

    Fourth quarter adjusted operating earnings included the impact of several notable items, which benefited pretax earnings by $166 million, compared to a pretax benefit of $290 million in the fourth quarter of 2021. The fourth quarter 2022 pretax notable items were:

    • Deceleration of DAC amortization, which contributed a benefit of $175 million, due in part to a 7.5% separate account return for the current quarter. This same item resulted in a benefit of $66 million in the fourth quarter of 2021, when the separate account return was approximately 5.9%. Included in the impact above is a DAC acceleration benefit in the current year period from the release of the historical returns from the mean reversion formula, and a negative impact from this same item in the fourth quarter of 2021.
    • A negative impact of $62 million from underperformance of private equity and other limited partnership returns relative to a 10% annualized return assumption. This same item resulted in a benefit of $106 million in the fourth quarter of 2021.
    • The current quarter did not experience the $80 million benefit realized in the fourth quarter of 2021 from the recovery of claims on previously reinsured policies.
    • The annual unlocking of actuarial assumptions in the current quarter resulted in a pretax benefit of $53 million. This same item resulted in a pretax benefit of $38 million in the fourth quarter of 2021.

    Fourth quarter 2022 comparisons to the prior year for both net income per diluted share and adjusted operating earnings per diluted share were impacted by a lower weighted average share count in the current quarter.

    Full Year 2022

    The company reported net income attributable to Jackson Financial Inc. for the full year 2022 of $5,697 million, or $64.23 per diluted share, compared to $3,183 million, or $33.69 per diluted share for the full year of 2021. The change was primarily due to improved net hedging results from larger interest rate increases and comparatively weaker equity market returns in 2022 compared to 2021. Additionally, net income in 2022 reflects $2,186 million of income from business reinsured to third parties, while the prior year included a loss of $21 million. These figures include the gain/loss on a funds withheld reinsurance treaty and the related net investment income, which do not impact our statutory capital or free cash flow and can be volatile quarter to quarter.

    Full year 2022 adjusted operating earnings were $1,443 million, or $16.27 per diluted share, compared to $2,398 million or $25.38 per diluted share for the full year of 2021. The decline was primarily due to decreased fee income from a lower average separate account balance, decreased net investment income due to lower levels of investment income on private equity and other limited partnership investments, and higher DAC amortization. These were partially offset by lower general and administrative expenses and lower agent asset-based trail commissions in 2022 compared to 2021.

    Full year 2022 comparisons to the prior year for both net income per diluted share and adjusted operating earnings per diluted share were impacted by a lower weighted average share count in the current year.

    Total shareholders’ equity was $8.4 billion or $97.97 per diluted share as of December 31, 2022, down from $10.4 billion or $114.78 per diluted share as of year-end 2021. The increase in rates on U.S. Treasury securities and the widening credit spreads of investment grade corporate securities resulted in reduced fair values and increased unrealized losses during the year. Adjusted book value2 was $11.8 billion or $137.22 per diluted share as of December 31, 2022, up from $8.9 billion or $98.69 per diluted share as of year-end 2021. The increase was primarily the result of full year non-operating hedging gains as well as adjusted operating earnings of $1.4 billion during 2022. Jackson’s financial leverage ratio of 18.3% improved from 22.9% as of year-end 2021 and was below our 20-25% long-term targeted range.

    Segment Results – Pretax Adjusted Operating Earnings2

     

    Three Months Ended

     

    Twelve Months Ended

    (in millions)

    December 31, 2022

    December 31, 2021

     

    December 31, 2022

    December 31, 2021

    Retail Annuities

    $638

    $750

     

    $1,626

    $2,528

    Institutional Products

    17

    27

     

    79

    64

    Closed Life and Annuity Blocks

    (32)

    21

     

    (1)

    224

    Corporate and Other

    (56)

    19

     

    (72)

    (35)

    Total3

    $567

    $817

     

    $1,632

    $2,781

    Retail Annuities

    Retail Annuities reported pretax adjusted operating earnings of $638 million in the fourth quarter of 2022 compared to $750 million in the fourth quarter of 2021. The current quarter was negatively impacted by reduced fee income resulting from lower average variable annuity account values, decreased net investment income due to lower levels of investment income on private equity and other limited partnership investments relative to the prior year period, and a fourth quarter 2021 benefit from a recovery of claims on previously reinsured policies. These were partially offset by lower DAC amortization and lower operating expenses in the current quarter. The decline in DAC amortization was due to a comparative DAC amortization benefit from the release of the historical returns from the mean reversion formula in the current quarter relative to the impact in the fourth quarter of 2021. Current quarter DAC amortization also benefited from deceleration resulting from a 7.5% separate account return in the quarter, as this benefit was larger than the deceleration benefit realized in the fourth quarter of 2021 when the separate account return was approximately 5.9%. In periods where separate account returns are higher than our DAC assumption, amortization is shifted to future years driving deceleration of DAC amortization in the current period.

    Full year 2022 pretax adjusted operating earnings for the segment were $1,626 million, compared to $2,528 million in full year 2021. The decline in full year results was driven by lower fee income, decreased net investment income due to lower levels of investment income on private equity and other limited partnership investments, higher DAC amortization due to comparatively weaker full-year separate account returns, and the recapture adjustment noted above. These were partially offset by lower operating expenses.

    Total annuity sales of $3.2 billion were down 35% from the fourth quarter of 2021. Variable annuity sales were down 47% compared to the fourth quarter of 2021, primarily due to the decline in equity markets and shifting consumer preferences in a rising interest rate environment. The current quarter also reflects $560 million of sales of RILA products, up from $108 million in the fourth quarter of 2021. Fixed and fixed indexed annuity sales in the current quarter totaled $134 million, up from $29 million in the fourth quarter of 2021. In total, annuity sales without lifetime benefit guarantees represented 43% of total annuity sales, up from 37% in the fourth quarter of 2021. We continue to generate fee-based sales, with current quarter advisory annuity sales of $168 million, compared to $358 million in the fourth quarter of 2021.

    For the full year 2022, annuity sales of $15.7 billion were down 19% from the full year 2021, reflecting lower sales of variable annuities, partially offset by higher sales of RILA, fixed and fixed indexed annuities.

    Institutional Products

    Institutional Products reported pretax adjusted operating earnings of $17 million in the fourth quarter of 2022 compared to $27 million in the fourth quarter of 2021. The current quarter was down from the prior year’s quarter due to higher interest credited and a higher loss on operating derivatives, partially offset by higher net investment income. Total sales for the current quarter were $908 million. Net flows totaled $505 million in the current quarter, and total account value of $9.0 billion was up from $8.8 billion in the fourth quarter of 2021.

    For the full year 2022, pretax adjusted operating earnings of $79 million were up from $64 million in full year 2021, primarily due to increased investment income on a moderately larger book of business, partially offset by higher interest credited on the larger book compared to the prior year. Net flows totaled $40 million in the full year 2022.

    Closed Life and Annuity Blocks

    Closed Life and Annuity Blocks reported a pretax adjusted operating loss of $(32) million in the fourth quarter of 2022 compared to adjusted operating income of $21 million in the fourth quarter of 2021. The current quarter was negatively impacted by lower income on private equity and other limited partnership investments, partially offset by lower death and other policy benefits resulting from the continued decrease in the size of the closed blocks.

    For the full year 2022, the pretax adjusted operating result was essentially breakeven compared to full year 2021 earnings of $224 million, driven by lower income on private equity and other limited partnership investments in the current year, partially offset by lower operating expenses. Net flows totaled $(75) million in the fourth quarter of 2022 and $(296) million in the full year 2022.

    Corporate and Other

    Corporate and Other reported a pretax adjusted operating loss of $(56) million in the fourth quarter of 2022 compared to income of $19 million in the fourth quarter of 2021. The change was primarily due to lower income on private equity and other limited partnership investments in the current quarter.

    For the full year 2022, the pretax adjusted operating loss of $(72) million was larger than the $(35) million loss reported in full year 2021, primarily due to higher levels of interest expense resulting from senior notes issued to refinance previously outstanding term loans, partially offset by lower expenses in the current year.

    Capitalization and Liquidity

    (Unaudited, in billions)

    December 31, 2022

    September 30, 2022

    December 31, 2021

    Statutory Total Adjusted Capital (TAC)

    Jackson National Life Insurance Company

    $7.0

    $9.5

    $6.6

    Statutory total adjusted capital at Jackson National Life Insurance Company (JNLIC) was $7.0 billion as of the current quarter, down from $9.5 billion as of the third quarter of 2022, due primarily to strong equity markets, which led to hedging losses and additional deferred tax asset (DTA) admissibility limit impacts that were not fully offset by reserve releases.

    JNLIC’s RBC ratio as of year-end 2022 was 544%, which was up from the third quarter 2022 estimate of over 500%. Higher equity markets during the current quarter led to a decline in company action level required capital (CAL) which improved the RBC ratio despite the decline in TAC during the current quarter.

    Cash and liquid assets at the holding company totaled approximately $675 million as of December 31, 2022, which was above our targeted minimum liquidity buffer of 2x annual holding company expenses

    Earnings Conference Call

    Jackson will host a conference call Wednesday, March 1, 2023, at 10 a.m. ET to review the fourth quarter and full year results and discuss the company’s 2023 outlook. The live webcast is open to the public and can be accessed at https://investors.jackson.com. A replay will be available following the call.

    To register for the webcast, click here.

    FORWARD-LOOKING STATEMENTS

    The information in this press release contains forward-looking statements about future events and circumstances and their effects upon revenues, expenses and business opportunities. Generally speaking, any statement in this release not based upon historical fact is a forward-looking statement. Forward-looking statements can also be identified by the use of forward-looking or conditional words, such as “could,” “should,” “can,” “continue,” “estimate,” “forecast,” “intend,” “look,” “may,” “will,” “expect,” “believe,” “anticipate,” “plan,” “remain,” “confident” and “commit” or similar expressions. In particular, statements regarding plans, strategies, prospects, targets and expectations regarding the business and industry are forward-looking statements. They reflect expectations, are not guarantees of performance and speak only as of the dates the statements are made. We caution investors that these forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from those projected, expressed, or implied. Factors that could cause actual results to differ materially from those in the forward-looking statements include those reflected in the Company’s reports filed with the U.S. Securities and Exchange Commissions. Except as required by law, Jackson Financial Inc. does not undertake to update such forward-looking statements. You should not rely unduly on forward-looking statements.

    Certain financial data included in this release consists of non-GAAP (Generally Accepted Accounting Principles) financial measures. These non-GAAP financial measures may not be comparable to similarly titled measures presented by other entities, nor should they be construed as an alternative to other financial measures determined in accordance with U.S. GAAP. Although the Company believes these non-GAAP financial measures provide useful information to investors in measuring the financial performance and condition of its business, investors are cautioned not to place undue reliance on any non-GAAP financial measures and ratios included in this release. A reconciliation of the non-GAAP financial measures to the most directly comparable U.S. GAAP financial measure can be found in the “Non-GAAP Financial Measures” Appendix of this release.

    Certain financial data included in this release consists of statutory accounting principles (“statutory”) financial measures, including “total adjusted capital.” These statutory financial measures are included in or derived from the Jackson National Life Insurance Company annual and/or quarterly statements filed with the Michigan Department of Insurance and Financial Services and available in the investor relations section of the Company’s website at investors.jackson.com/financials/statutory-filings.

    ABOUT JACKSON

    Jackson® (NYSE: JXN) is committed to helping clarify the complexity of retirement planning—for financial professionals and their clients. Through our range of annuity products, financial know-how, history of award-winning service* and streamlined experiences, we strive to reduce the confusion that complicates retirement planning. We take a balanced, long-term approach to responsibly serving all our stakeholders, including customers, shareholders, distribution partners, employees, regulators and community partners. We believe by providing clarity for all today, we can help drive better outcomes for tomorrow. For more information, visit www.jackson.com.

    Visit investors.jackson.com to view information regarding Jackson Financial Inc., including a supplement regarding the Fourth Quarter and Full Year 2022 results. We use this website as a primary channel for disclosing key information to our investors, some of which may contain material and previously non-public information.

    *SQM (Service Quality Measurement Group) Contact Center Awards Program for 2004 and 2006-2022, for the financial services industry. (To achieve world-class certification, 80% or more of call-center customers surveyed must have rated their experience as very satisfied, the highest rating possible).

    Jackson® is the marketing name for Jackson Financial Inc., Jackson National Life Insurance Company® (Home Office: Lansing, Michigan) and Jackson National Life Insurance Company of New York® (Home Office: Purchase, New York).

    APPENDIX

    Non-GAAP Financial Measures

    In addition to presenting our results of operations and financial condition in accordance with GAAP, we use and report selected non-GAAP financial measures. Management believes the use of these non-GAAP financial measures, together with relevant GAAP financial measures, provides a better understanding of our results of operations, financial condition and the underlying performance drivers of our business. These non-GAAP financial measures should be considered supplementary to our results of operations and financial condition that are presented in accordance with GAAP and should not be viewed as a substitute for the GAAP financial measures. Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Consequently, our non-GAAP financial measures may not be comparable to similar measures used by other companies.

    Adjusted Operating Earnings

    Adjusted Operating Earnings is an after-tax non-GAAP financial measure, which we believe should be used to evaluate our financial performance on a consolidated basis by excluding certain items that may be highly variable from period to period due to accounting treatment under GAAP or that are non-recurring in nature, as well as certain other revenues and expenses that we do not view as driving our underlying performance. Adjusted Operating Earnings should not be used as a substitute for net income as calculated in accordance with GAAP. However, we believe the adjustments to net income are useful for gaining an understanding of our overall results of operations.

    For additional detail on the excluded items, please refer to the supplement regarding the fourth quarter ended December 31, 2022, posted on our website, https://investors.jackson.com.

    The following is a reconciliation of Adjusted Operating Earnings to net income (loss) attributable to Jackson Financial Inc. (Jackson), the most comparable GAAP measure.

    GAAP Net Income (Loss) to Adjusted Operating Earnings

     

    Three Months Ended

     

    Twelve Months Ended

    (in millions)

    December 31,
    2022

    December 31,
    2021

     

    December 31,
    2022

    December 31,
    2021

    Net income (loss) attributable to Jackson Financial Inc.

    $

    (710

    )

    $

    585

     

     

    $

    5,697

     

    $

    3,183

     

    Income tax expense (benefit)

     

    (235

    )

     

    87

     

     

     

    1,371

     

     

    602

     

    Pretax income (loss) attributable to Jackson Financial Inc.

     

    (945

    )

     

    672

     

     

     

    7,068

     

     

    3,785

     

    Non-operating adjustments – (income) loss:

     

     

     

     

     

    Fees attributed to guaranteed benefit reserves

     

    (777

    )

     

    (753

    )

     

     

    (3,077

    )

     

    (2,854

    )

    Net movement in freestanding derivatives

     

    3,862

     

     

    1,708

     

     

     

    2,744

     

     

    5,674

     

    Net reserve and embedded derivative movements

     

    (1,110

    )

     

    (532

    )

     

     

    (2,891

    )

     

    (2,753

    )

    DAC and DSI impact

     

    (434

    )

     

    (18

    )

     

     

    1,214

     

     

    266

     

    Assumption changes

     

    (367

    )

     

    (24

    )

     

     

    (367

    )

     

    (24

    )

    Total guaranteed benefits and hedging results

     

    1,174

     

     

    381

     

     

     

    (2,377

    )

     

    309

     

    Net realized investments (gains) losses including change in fair value of funds withheld embedded derivative

     

    702

     

     

    58

     

     

     

    (1,827

    )

     

    (161

    )

    Net investment income on funds withheld assets

     

    (317

    )

     

    (303

    )

     

     

    (1,254

    )

     

    (1,188

    )

    Other items

     

    (47

    )

     

    9

     

     

     

    22

     

     

    36

     

    Total non-operating adjustments

     

    1,512

     

     

    145

     

     

     

    (5,436

    )

     

    (1,004

    )

    Pretax Adjusted Operating Earnings

     

    567

     

     

    817

     

     

     

    1,632

     

     

    2,781

     

    Operating income taxes

     

    76

     

     

    110

     

     

     

    189

     

     

    383

     

    Adjusted Operating Earnings

    $

    491

     

    $

    707

     

     

    $

    1,443

     

    $

    2,398

     

     

     

     

     

     

     

    Weighted Average diluted shares outstanding4

     

    83,695,001

     

     

    94,468,978

     

     

     

    88,690,700

     

     

    94,465,511

     

    Net income (loss) per diluted share

    $

    (8.48

    )

    $

    6.19

     

     

    $

    64.23

     

    $

    33.69

     

    Adjusted Operating Earnings per diluted share

    $

    5.66

     

    $

    7.48

     

     

    $

    16.27

     

    $

    25.38

     

    Adjusted Book Value

    Adjusted Book Value excludes Accumulated Other Comprehensive Income (Loss) (“AOCI”) attributable to Jackson Financial Inc (“JFI”). AOCI attributable to JFI excludes AOCI arising from investments held within the funds withheld account related to the Athene Reinsurance Transaction. We exclude AOCI attributable to JFI from Adjusted Book Value because our invested assets are generally invested to closely match the duration of our liabilities, which are longer duration in nature, and therefore we believe period-to-period fair market value fluctuations in AOCI to be inconsistent with this objective. We believe excluding AOCI attributable to JFI is more useful to investors in analyzing trends in our business.

    Financial Leverage Ratio

    We use Financial Leverage Ratio to manage our financial flexibility and ensure we maintain our financial strength ratings. Total financial leverage is the ratio of total debt to Total Adjusted Capitalization (combined total debt and Adjusted Book Value).

    Adjusted Book Value & Debt Financial Leverage Ratio

    (in millions)

    December 31,
    2022

    December 31,
    2021

    Total shareholders’ equity

    $

    8,423

     

    $

    10,394

     

    Adjustments to total shareholders’ equity:

     

     

    Exclude Accumulated Other Comprehensive (Income) Loss attributable to Jackson Financial Inc.

     

    3,375

     

     

    (1,457

    )

    Adjusted Book Value (a)

    $

    11,798

     

    $

    8,937

     

     

     

     

    Debt (b)

     

    2,635

     

    $

    2,649

     

     

     

     

    Financial Leverage Ratio (b/[a+b])

     

    18.3

    %

     

    22.9

    %

    Consolidated Balance Sheets

     

     

    December 31,

     

    December 31,

     

     

    2022

     

    2021

    (in millions, except per share data)

     

     

     

     

    Assets

     

     

     

     

    Investments:

     

     

     

     

     

    Debt Securities, available-for-sale, net of allowance for credit losses of $23 and $9 at December 31, 2022 and 2021, respectively (amortized cost: 2022 $48,798; 2021 $49,378)

     

    $

    42,489

     

    $

    51,547

     

    Debt Securities, at fair value under fair value option

     

     

    2,173

     

     

    1,711

     

    Debt Securities, trading, at fair value

     

     

    100

     

     

    117

     

    Equity securities, at fair value

     

     

    393

     

     

    279

     

    Mortgage loans, net of allowance for credit losses of $95 and $94 at December 31, 2022 and 2021, respectively

     

     

    10,967

     

     

    11,482

     

    Mortgage loans, at fair value under fair value option

     

     

    582

     

     

     

    Policy loans (including $3,419 and $3,467 at fair value under the fair value option at December 31, 2022 and 2021, respectively)

     

     

    4,377

     

     

    4,475

     

    Freestanding derivative instruments

     

     

    1,270

     

     

    1,417

     

    Other invested assets

     

     

    3,595

     

     

    3,199

     

    Total investments

     

     

    65,946

     

     

    74,227

     

    Cash and cash equivalents

     

     

    4,298

     

     

    2,623

     

    Accrued investment income

     

     

    514

     

     

    503

     

    Deferred acquisition costs

     

     

    13,422

     

     

    14,249

     

    Reinsurance recoverable, net of allowance for credit losses of $15 and $12 at December 31, 2022 and 2021, respectively

     

     

    29,641

     

     

    33,126

     

    Deferred income taxes, net

     

     

    385

     

     

    954

     

    Other assets

     

     

    946

     

     

    928

     

    Separate account assets

     

     

    195,906

     

     

    248,949

     

    Total assets

     

    $

    311,058

     

    $

    375,559

     

    Consolidated Balance Sheets

     

     

    December 31,

     

    December 31,

     

     

     

    2022

     

    2021

     

    (in millions, except per share data)

     

     

     

     

     

    Liabilities and Equity

     

     

     

     

    Liabilities

     

     

     

     

     

    Reserves for future policy benefits and claims payable5

     

    $

    14,273

     

     

    $

    18,667

     

     

    Other contract holder funds

     

     

    58,195

     

     

     

    58,726

     

     

    Funds withheld payable under reinsurance treaties (including $3,582 and $3,639 at fair value under the fair value option at December 31, 2022 and 2021, respectively)

     

     

    22,957

     

     

     

    29,007

     

     

    Long-term debt

     

     

    2,635

     

     

     

    2,649

     

     

    Repurchase agreements and securities lending payable

     

     

    1,048

     

     

     

    1,589

     

     

    Collateral payable for derivative instruments

     

     

    689

     

     

     

    913

     

     

    Freestanding derivative instruments

     

     

    2,065

     

     

     

    41

     

     

    Notes issued by consolidated variable interest entities, at fair value under fair value option

     

     

    1,732

     

     

     

    1,404

     

     

    Other liabilities

     

     

    2,403

     

     

     

    2,540

     

     

    Separate account liabilities

     

     

    195,906

     

     

     

    248,949

     

     

    Total liabilities

     

     

    301,903

     

     

     

    364,485

     

     

     

     

     

     

     

     

    Equity

     

     

     

     

     

    Common stock, (i) at December 31, 2022, common stock (formerly known as the Class A Common Stock at December 31, 2021) 1,000,000,000 shares authorized, $0.01 par value per share and 82,690,098 shares issued and outstanding (ii) at December 31, 2021, Class A Common Stock 900,000,000 shares authorized, $0.01 par value per share and 88,046,833 shares issued and outstanding and Class B Common Stock 100,000,000 shares authorized, $0.01 par value per share and 638,861 shares issued and outstanding6

     

     

    1

     

     

     

    1

     

     

    Additional paid-in capital

     

     

    6,063

     

     

     

    6,051

     

     

    Treasury stock, at cost; 11,784,813 and 5,778,649 shares at December 31, 2022 and 2021, respectively

     

     

    (443

    )

     

     

    (211

    )

     

    Accumulated other comprehensive income (loss), net of tax expense (benefit) of $(650) in 2022 and $194 in 2021

     

     

    (5,481

    )

     

     

    1,744

     

     

    Retained earnings

     

     

    8,283

     

     

     

    2,809

     

     

    Total shareholders’ equity

     

     

    8,423

     

     

     

    10,394

     

     

    Noncontrolling interests

     

     

    732

     

     

     

    680

     

     

    Total equity

     

     

    9,155

     

     

     

    11,074

     

     

    Total liabilities and equity

     

     

    311,058

     

     

     

    375,559

     

     

    Consolidated Income Statements

     

     

    Three Months Ended
    December 31,

     

    Twelve Months Ended
    December 31,

     

    (in millions, except per share data)

     

     

    2022

     

     

     

    2021

     

     

     

    2022

     

     

    2021

     

     

    Revenues

     

     

     

     

     

     

     

     

    Fee income

     

    $

    1,868

     

     

    $

    2,096

     

     

    $

    7,722

     

    $

    8,059

     

     

    Premiums

     

     

    27

     

     

     

    33

     

     

     

    132

     

     

    148

     

     

    Net investment income

     

     

    739

     

     

     

    856

     

     

     

    2,761

     

     

    3,424

     

     

    Net gains (losses) on derivatives and investments7

     

     

    (3,040

    )

     

     

    (1,284

    )

     

     

    3,851

     

     

    (2,478

    )

     

    Other income

     

     

    25

     

     

     

    24

     

     

     

    85

     

     

    94

     

     

    Total revenues

     

     

    (381

    )

     

     

    1,725

     

     

     

    14,551

     

     

    9,247

     

     

     

     

     

     

     

     

     

    Benefits and Expenses

     

     

     

     

     

     

     

     

     

    Death, other policy benefits and change in policy reserves, net of deferrals

     

     

    200

     

     

     

    37

     

     

     

    2,290

     

     

    970

     

     

    Interest credited on other contract holder funds, net of deferrals and amortization

     

     

    234

     

     

     

    204

     

     

     

    862

     

     

    834

     

     

    Interest expense

     

     

    40

     

     

     

    18

     

     

     

    113

     

     

    37

     

     

    Operating costs and other expenses, net of deferrals

     

     

    631

     

     

     

    749

     

     

     

    2,432

     

     

    2,839

     

     

    Amortization of deferred acquisition costs

     

     

    (533

    )

     

     

    (31

    )

     

     

    1,743

     

     

    520

     

     

    Total benefits and expenses

     

     

    572

     

     

     

    977

     

     

     

    7,440

     

     

    5,200

     

     

    Pretax income (loss)

     

     

    (953

    )

     

     

    748

     

     

     

    7,111

     

     

    4,047

     

     

    Income tax expense (benefit)

     

     

    (235

    )

     

     

    87

     

     

     

    1,371

     

     

    602

     

     

    Net income (loss)

     

     

    (718

    )

     

     

    661

     

     

     

    5,740

     

     

    3,445

     

     

    Less: Net income (loss) attributable to noncontrolling interests

     

     

    (8

    )

     

     

    76

     

     

     

    43

     

     

    262

     

     

    Net income (loss) attributable to Jackson Financial Inc.

     

    $

    (710

    )

     

    $

    585

     

     

    $

    5,697

     

    $

    3,183

     

     

     

     

     

     

     

     

     

    Earnings per share

     

     

     

     

     

     

     

     

     

    Basic

     

    $

    (8.48

    )

     

    $

    6.32

     

     

    $

    66.62

     

    $

    33.86

     

     

    Diluted

     

    $

    (8.48

    )

     

    $

    6.19

     

     

    $

    64.23

     

    $

    33.69

     

     

    _________________________

    For the reconciliation of non-GAAP measures to the most comparable GAAP measure, please see the explanation of Non-GAAP Financial Measures in the Appendix to this release.

    For the reconciliation of non-GAAP measures to the most comparable GAAP measure, please see the explanation of Non-GAAP Financial Measures in the Appendix to this release.

    See reconciliation of Net Income to Total pretax adjusted operating earnings in the Appendix to this release

    The calculation of basic and diluted earnings per share and weighted average shares of common stock outstanding reflect a 104,960.3836276-for-1 stock split effected on September 9, 2021. All share and earnings per share information presented herein have been retroactively adjusted to reflect the stock split.

    In connection with the December 31, 2022 year-end audit, Jackson’s management, under the oversight of Jackson’s Audit Committee, conducted an assessment of the effectiveness of our internal control over financial reporting. Management identified a material weakness related to the process of setting the discount rate used to estimate the fair value of some of the guarantee features of our variable annuity products. This weakness did not result in any identified misstatements to the December 31, 2022 year-end GAAP or statutory financial statements, and there were no changes to previously released financial results. Management is developing a remediation plan for 2023.

    The authorized Class B Common Stock has been eliminated as a result of the filing of the Company’s Third Amended and Restated Certificate of Incorporation during 2022, and the Class A Common Stock became Common Stock.

    See footnote 5.

     

    Contacts

    Investor Relations Contacts:
    Liz Werner
    elizabeth.werner@jackson.com

    Andrew Campbell
    andrew.campbell@jackson.com

    Media Contact:
    Patrick Rich
    patrick.rich@jackson.com

    Originally Posted at Business Wire on February 28, 2023 by Jackson.

    Categories: Industry Articles
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