Jackson Financial Inc

We manage our business through three segments: Retail Annuities, Institutional Products, and Closed Life and Annuity Blocks. We report certain activities and items that are not included in these segments, including the results of PPM Holdings, Inc., the holding company of PPM, within Corporate and Other. The following tables and discussion represent an overall view of our results of operations for each segment.

Pretax Adjusted Operating Earnings by Segment

The following table summarizes pretax adjusted operating earnings (non-GAAP) from the Company's business segment operations and also provides a reconciliation of the segment measure to net income on a consolidated U.S. GAAP basis. Also, see Note 3 - Segment Information of the Notes to Condensed Consolidated Financial Statements for further information regarding the calculation of pretax adjusted operating earnings:

Retail Annuities

The following table sets forth, for the periods presented, certain data underlying the pretax adjusted operating earnings results for our Retail Annuities segment. The information contained in the table below should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes appearing elsewhere in this report:

The following table summarizes a roll-forward of activity affecting account value for our Retail Annuities segment for the periods indicated:

Pretax adjusted operating earnings increased $63 million to $419 million for the three months ended March 31, 2024 from $356 million for the three months ended March 31, 2023 primarily due to:

•$108 million increase in fee income primarily due to higher average separate account values compared to the prior year; and

•$47 million increase in spread income primarily due to $37 million higher investment income driven by higher yields in 2024, partially offset by higher investment expenses related to repurchase agreements compared to the prior year, and $10 million lower interest credited compared to prior year.

These increases were partially offset by:

•$34 million increase 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 higher other policyholder benefits in 2024; and

•$64 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 compensation expenses during the three months ended March 31, 2024.

Retail annuities account value, net of reinsurance, increased $28.8 billion between periods primarily due to positive variable annuity separate account returns driven by favorable market performance in 2024, as well as positive RILA net flows over the period.

Institutional Products

The following table sets forth, for the periods presented, certain data underlying the pretax adjusted operating earnings results for our Institutional Products segment. The information contained in the table below should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes appearing elsewhere in this report:

The following table summarizes a roll-forward of activity affecting account value for our Institutional Products segment for the periods indicated:

Pretax adjusted operating earnings increased $22 million to $31 million for the three months ended March 31, 2024 from $9 million for the three months ended March 31, 2023 primarily due to a $22 million increase in spread income primarily due to $27 million higher investment income, partially offset by $5 million higher interest credited on contract holder funds.

Institutional product account value decreased from $8,691 million at March 31, 2023 to $7,825 million at March 31, 2024. The decrease in account value was primarily driven by decreased issuances, partially offset by decreased maturities of the existing contracts and funding agreements.

Closed Life and Annuity Blocks

The following table sets forth, for the periods presented, certain data underlying the pretax adjusted operating earnings results for our Closed Block Life and Annuity Blocks segment. The information contained in the table below should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes appearing elsewhere in this report:

Pretax adjusted operating earnings increased $39 million to $19 million for the three months ended March 31, 2024 from $(20) million for the three months ended March 31, 2023 primarily due to a:

•$27 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 a greater decrease in reserves as the closed block of life business continues to run off.

Corporate and Other

Corporate and Other includes the operations of PPM Holdings, Inc., the parent holding company of PPM, and unallocated corporate revenue and expenses, as well as certain eliminations and consolidation adjustments. The following table sets forth, for the periods presented, certain data underlying the pretax adjusted operating earnings results for Corporate and Other. The information contained in the table below should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes appearing elsewhere in this report:

Pretax adjusted operating earnings decreased $37 million to $(80) million for the three months ended March 31, 2024 from $(43) million for the three months ended March 31, 2023 primarily due to the following:

•$16 million decrease in other income primarily due to a one-time reinsurance related adjustment;

•$14 million decrease in net investment income; and

•$9 million increase in operating costs and other expenses, net of deferrals, primarily due to an increase in incentive and deferred compensation expenses during the three months ended March 31, 2024.