Stockholders' Equity

3 Months Ended

Mar. 31, 2023

Stockholders' Equity

Stockholders' Equity

15. Stockholders’ Equity

Common Stock Dividends

	For the three months ended
	March 31,
	2023		2022
Dividends declared per common share	$	0.64	$	0.64

Reconciliation of Outstanding Common Shares

	For the three months ended
	March 31,
	2023	2022
	(in millions)
Beginning balance	243.5	261.7
Shares issued	1.7	1.7
Treasury stock acquired	(2.1)	(11.2)
Ending balance	243.1	252.2

In June 2021, our Board of Directors (“Board”) authorized a share repurchase program of up to $1.2 billion of our outstanding common stock, which was completed in August 2022. In January 2022, our Board authorized a $1.6 billion increase to the June 2021 share repurchase program authorization, which has no expiration date. Shares repurchased under these programs are accounted for as treasury stock, carried at cost and reflected as a reduction to stockholders’ equity.

In March 2022, we entered into an accelerated share repurchase program with a third party financial institution to repurchase $700.0 million of common stock. We received approximately 8.5 million shares at an initial cost of $560.0 million from our counterparty as of March 31, 2022, which was recorded in treasury stock. The associated $140.0 million forward contract was recorded in additional paid-in capital. This program closed in June 2022, at which time an additional 1.4 million shares were delivered based on the $70.53 daily volume-weighted average price of our common stock, less a discount, during the term of the program.

In August 2022, we entered into an accelerated share repurchase program with a third party financial institution to repurchase $400.0 million of common stock. We received approximately 4.1 million shares at an initial cost of $320.0 million from our counterparty as of August 16, 2022, which was recorded in treasury stock. This program closed in September 2022, at which time an additional 1.2 million shares were delivered based on the $76.48 daily volume-weighted average price of our common stock, less a discount, during the term of the program.

Other Comprehensive Income (Loss)

	For the three months ended
	March 31, 2023
	Pre-Tax		Tax		After-Tax
	(in millions)
Net unrealized gains on available-for-sale securities during the period	$	1,280.8	$	(264.9)	$	1,015.9
Reclassification adjustment for losses included in net income (1)		78.5		(16.4)		62.1
Adjustments for assumed changes in amortization patterns		0.2		—		0.2
Adjustments for assumed changes in policyholder liabilities		(0.1)		—		(0.1)
Net unrealized gains on available-for-sale securities		1,359.4		(281.3)		1,078.1
Net unrealized gains on derivative instruments during the period		3.7		(0.8)		2.9
Reclassification adjustment for gains included in net income (2)		(3.7)		0.8		(2.9)
Net unrealized gains on derivative instruments		—		—		—
Liability for future policy benefits discount rate remeasurement loss (3)		(682.4)		141.5		(540.9)
Market risk benefit nonperformance risk gain (4)		7.7		(1.7)		6.0
Foreign currency translation adjustment		132.2		(0.1)		132.1
Amortization of amounts included in net periodic benefit cost (5)		5.1		(1.3)		3.8
Net unrecognized postretirement benefit obligation		5.1		(1.3)		3.8
Other comprehensive income	$	822.0	$	(142.9)	$	679.1

	For the three months ended
	March 31, 2022
	Pre-Tax		Tax		After-Tax
	(in millions)
Net unrealized losses on available-for-sale securities during the period	$	(5,535.5)	$	1,172.0	$	(4,363.5)
Reclassification adjustment for gains included in net income (1)		(40.6)		5.2		(35.4)
Adjustments for assumed changes in amortization patterns		(0.1)		—		(0.1)
Adjustments for assumed changes in policyholder liabilities		363.1		(76.3)		286.8
Net unrealized losses on available-for-sale securities		(5,213.1)		1,100.9		(4,112.2)
Net unrealized losses on derivative instruments during the period		(21.0)		4.4		(16.6)
Reclassification adjustment for gains included in net income (2)		(6.8)		1.4		(5.4)
Adjustments for assumed changes in policyholder liabilities		3.9		(0.7)		3.2
Net unrealized losses on derivative instruments		(23.9)		5.1		(18.8)
Liability for future policy benefits discount rate remeasurement gain (3)		3,190.9		(671.8)		2,519.1
Market risk benefit nonperformance risk gain (4)		93.2		(19.5)		73.7
Foreign currency translation adjustment		156.6		(1.5)		155.1
Amortization of amounts included in net periodic benefit cost (5)		9.0		(2.3)		6.7
Net unrecognized postretirement benefit obligation		9.0		(2.3)		6.7
Other comprehensive loss	$	(1,787.3)	$	410.9	$	(1,376.4)

(1) Pre-tax reclassification adjustments relating to available-for-sale securities are reported in net realized capital gains (losses) on the consolidated statements of operations.

(2) See Note 4, Derivative Financial Instruments, under the caption “Effect of Fair Value and Cash Flow Hedges on Consolidated Statements of Operations” for further details.

(3) Includes the discount rate remeasurement gain (loss) associated with the liability for future policy benefits and the associated reinsurance recoverable. See Note 8, Future Policy Benefits and Claims, under the caption “Liability for Future Policy Benefits” for further details.

(4) See Note 9, Market Risk Benefits, for further details.

(5) Amount is comprised of amortization of prior service cost (benefit) and recognized net actuarial (gain) loss, which is reported in operating expenses on the consolidated statements of operations. See Note 13, Employee and Agent Benefits, under the caption “Components of Net Periodic Benefit Cost” for further details.

Accumulated Other Comprehensive Loss

	Net unrealized		Net unrealized		LFPB				Foreign		Unrecognized		Accumulated
	gains (losses) on		gains		discount rate		MRB		currency		postretirement		other
	available-for-sale		on derivative		remeasurement		nonperformance		translation		benefit		comprehensive
	securities (1)		instruments		gain (loss)		risk gain (loss)		adjustment		obligation		loss
	(in millions)
Balances as of January 1, 2022	$	3,880.4	$	56.6	$	(4,037.6)	$	(90.1)	$	(1,548.7)	$	(344.7)	$	(2,084.1)
Other comprehensive loss during the period, net of adjustments		(4,076.8)		(13.4)		2,519.1		73.7		153.7		—		(1,343.7)
Amounts reclassified to AOCI		(35.4)		(5.4)		—		—		—		6.7		(34.1)
Other comprehensive loss		(4,112.2)		(18.8)		2,519.1		73.7		153.7		6.7		(1,377.8)
Balances as of March 31, 2022	$	(231.8)	$	37.8	$	(1,518.5)	$	(16.4)	$	(1,395.0)	$	(338.0)	$	(3,461.9)
Balances as of January 1, 2023	$	(5,857.9)	$	39.7	$	740.9	$	24.0	$	(1,571.6)	$	(254.1)	$	(6,879.0)
Other comprehensive income during the period, net of adjustments		1,016.0		2.9		(540.9)		6.0		130.7		—		614.7
Amounts reclassified from AOCI		62.1		(2.9)		—		—		—		3.8		63.0
Other comprehensive income		1,078.1		—		(540.9)		6.0		130.7		3.8		677.7
Balances as of March 31, 2023	$	(4,779.8)	$	39.7	$	200.0	$	30.0	$	(1,440.9)	$	(250.3)	$	(6,201.3)

(1) Net unrealized gains on available-for-sale securities for which an allowance for credit loss has been recorded were $0.6 million and $6.2 million as of March 31, 2023 and 2022, respectively.

Noncontrolling Interest

Interests held by unaffiliated parties in consolidated entities are reflected in noncontrolling interest, which represents the noncontrolling partners’ share of the underlying net assets of our consolidated subsidiaries. Noncontrolling interest that is not redeemable is reported in the equity section of the consolidated statements of financial position.

The noncontrolling interest holders in certain of our consolidated entities maintain an equity interest that is redeemable at the option of the holder, which may be exercised on varying dates. Since redemption of the noncontrolling interest is outside of our control, this interest is excluded from stockholders’ equity and reported separately as redeemable noncontrolling interest on the consolidated statements of financial position. Our redeemable noncontrolling interest primarily relates to consolidated sponsored investment funds for which interests are redeemed at fair value from the net assets of the funds.

For our redeemable noncontrolling interest related to other consolidated subsidiaries, redemptions are required to be purchased at fair value or a value based on a formula that management intended to reasonably approximate fair value based on a fixed multiple of earnings over a measurement period. The carrying value of the redeemable noncontrolling interest is compared to the redemption value at each reporting period. Any adjustments to the carrying amount of the redeemable noncontrolling interest for changes in redemption value prior to exercise of the redemption option are determined after the attribution of net income or loss of the subsidiary and are recognized in the redemption value as they occur. Adjustments to the carrying value of redeemable noncontrolling interest result in adjustments to additional paid-in capital and/or retained earnings. Adjustments are recorded in retained earnings to the extent the redemption value of the redeemable noncontrolling interest exceeds its fair value and will impact the numerator in our earnings per share calculations. All other adjustments to the redeemable noncontrolling interest are recorded in additional paid-in capital.

Following is a reconciliation of the changes in the redeemable noncontrolling interest:

	For the three months ended
	March 31,
	2023		2022
	(in millions)
Balance at beginning of period	$	262.0	$	332.5
Net income (loss) attributable to redeemable noncontrolling interest		4.5		(10.3)
Redeemable noncontrolling interest of deconsolidated entities (1)		(2.4)		—
Contributions from redeemable noncontrolling interest		19.0		24.0
Distributions to redeemable noncontrolling interest		(8.4)		(39.6)
Purchase of subsidiary shares from redeemable noncontrolling interest		(1.6)		—
Change in redemption value of redeemable noncontrolling interest		(0.6)		0.1
Other comprehensive income attributable to redeemable noncontrolling interest		0.2		0.1
Balance at end of period	$	272.7	$	306.8