Jackson Financial Inc

The following table sets forth, for the periods presented, certain data from our Condensed Consolidated Income Statements. The information contained in the table below should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes elsewhere in this report:

Pretax Income (Loss)

Our pretax income (loss) increased by $2,957 million to $903 million for the three months ended March 31, 2024, from $(2,054) million for the three months ended March 31, 2023 primarily due to:

•$2,544 million favorable movements in market risk benefits (gains) losses, due primarily to favorable changes in interest rates during the three months ended March 31, 2024, partially offset by unfavorable changes in equity index volatility compared to the prior year;

•$306 million increase in total net gains (losses) on derivatives and investments as shown in the table below and driven by:

◦Lower losses excluding derivatives and funds withheld assets were driven by lower credit loss expense on mortgage loans and higher foreign currency exchange gains, partially offset by increased losses on disposals of debt securities during the three months ended March 31, 2024; and

◦Lower losses recognized on funds withheld reinsurance were driven by the increase in interest rates during 2024 compared to a decrease in interest rates in 2023 which resulted in expense reported for the movement in the embedded derivative in the prior year;

•$110 million increase in fee income primarily due to higher average separate account values compared to the prior year;

•$27 million increase in net investment income as a result of higher income on bonds, driven by higher yields in 2024 compared to the prior year, higher income on equity securities, and lower investment expenses, partially offset by lower income on funds withheld under reinsurance treaties; and

•$10 million decrease in death, other policy benefits, and change in policy reserves, net of (gain) loss from updating future policy benefits cash flow assumptions, primarily due to improved mortality and a greater decrease in reserves as the closed block of life business continues to run off, partially offset by higher other policyholder benefits.

These improvements were partially offset by:

•$69 million increase in operating costs and other expenses, net of deferrals, primarily due to higher asset-based non-deferrable commissions, due to higher account values during the three months ended March 31, 2024, compared to the prior year, and an increase in incentive and deferred compensation expenses during the three months ended March 31, 2024.

Income Taxes

Income tax expense increased $659 million to an expense of $101 million for the three months ended March 31, 2024, from a benefit of $558 million for the three months ended March 31, 2023. The provision for income tax in the current period led to an effective income tax rate ("ETR") of 11% for the three months ended March 31, 2024 compared to the March 31, 2023 ETR of 27%. The change in the ETR during the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was due to the relationship of the taxable income to the consolidated pre-tax income. The ETR differs from the statutory rate of 21% primarily due to the dividends received deduction and the utilization of tax credits. See Note 15 - Income Taxes of the Notes to Consolidated Financial Statements in our 2023 Annual Report and Note 15 - Income Taxes of the Notes to Condensed Consolidated Financial Statements in this report for more information.