Business and Basis of Presentation (Tables)

9 Months Ended

Sep. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Effects of Reinsurance

The financial statement impacts of this transaction are as follows:

Unaudited Interim Statement of Financial Position

	Balance as of June 30, 2021		Impacts of Recapture		Total as of July 1, 2021
	(in millions)
ASSETS
Total investments(1)(2)	$	20,501	$	(8,327)	$	12,174
Cash and cash equivalents	2,091		(409)		1,682
Deferred policy acquisition costs	4,215		(3,286)		929
Accrued investment income	110		(42)		68
Reinsurance recoverables	567		(181)		386
Income tax receivable	1,707		(787)		920
Value of business acquired	28		0		28
Deferred sales inducements	692		(388)		304
Receivables from parent and affiliates	114		(41)		73
Other assets	544		0		544
Separate account assets	32,934		0		32,934
TOTAL ASSETS	$	63,503	$	(13,461)	$	50,042
LIABILITIES AND EQUITY
LIABILITIES
Future policy benefits	$	13,707	$	(9,048)	$	4,659
Policyholders’ account balances	12,617		(3,199)		9,418
Payables to parent and affiliates	34		0		34
Long-term debt	300		0		300
Reinsurance payable	148		(115)		33
Other liabilities	805		(245)		560
Separate account liabilities	32,934		0		32,934
Total Liabilities	60,545		(12,607)		47,938
EQUITY
Common stock	3		0		3
Additional paid-in capital(3)	4,383		(3,786)		597
Retained earnings	(1,782)		3,026		1,244
Accumulated other comprehensive income	354		(94)		260
Total equity	2,958		(854)		2,104
TOTAL LIABILITIES AND EQUITY	$	63,503	$	(13,461)	$	50,042

Significant non-cash transactions

(1) The decrease in total investments includes non-cash activities of $8.3 billion related to the recapture transaction.

(2) The Company incurred an increase related to ceding commissions of $2.0 billion received from Pruco Life.

(3) The decrease in Additional paid-in capital includes non-cash activities of $3.4 billion in invested assets related to return of capital to PAI.

Unaudited Interim Statement of Operations and Comprehensive Income (Loss)

For the three and nine months ended September 30, 2021	Impacts of Recapture
	(in millions)
REVENUES
Other income (loss)	$	1
Realized investment gains (losses), net	5,142
TOTAL REVENUES	5,143
BENEFITS AND EXPENSES
Policyholders’ benefits	(257)
Interest credited to policyholders’ account balances	399
Commission expense	1,362
General, administrative and other expenses	(191)
TOTAL BENEFITS AND EXPENSES	1,313
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES	3,830
Income tax expense (benefit)	804
NET INCOME (LOSS)	$	3,026

Affiliated Asset Transfers

Affiliate	Period	Transaction	Security Type	Fair Value		Book Value		APIC Increase/(Decrease)		Realized Investment Gain/(Loss), Net		Derivative Gain/(Loss)
				(in millions)
Pruco Life	July 1, 2021	Sale	Derivatives, Fixed Maturities, Equity Securities, Commercial Mortgages and JV/LP Investments	$	4,908	$	4,720	$	0	$	173	$	15
PAI	July 1, 2021	Return of Capital	Fixed Maturities	$	3,420	$	3,420	$	(3,420)	$	0	$	0