Jackson Financial Inc

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

Part II |Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations |Consolidated Results of Operations

Pretax Income (Loss)

Our pretax income (loss) increased by $64 million to pretax income of $1,022 million for the year ended December 31, 2024, from $958 million for the year ended December 31, 2023, primarily due to:

•$403 million increase in fee income due to higher average separate account values compared to the prior year;

•$153 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 the impact of actuarial assumption updates, improved mortality, and lower other policyholder benefits. See "Policy and Contract Liabilities" below for further information regarding our actuarial assumption updates; and

•$35 million decrease in interest credited on contract holder funds, net of deferrals, primarily due to lower average fixed account balances in 2024, compared to the prior year.

These increases were largely offset by:

•$276 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 2024, an increase in incentive compensation expenses, and higher other commissions, net of deferrals, driven primarily by higher RILA sales in 2024;

•$199 million decrease in total net gains (losses) on derivatives and investments as shown in table below and driven by:

•Volumes of freestanding derivatives can significantly vary period over period and movements in those derivatives are subject to interest rate or equity market movements. The movements in interest rate hedges during 2024 were primarily driven by an increase in interest rates, compared to relatively flat interest rate movements in 2023. The movements in equity hedges during 2024 were primarily driven by slight increases in equity markets, compared to 2023.

•Embedded derivative movements were unfavorable primarily due to the impact of market increases on our growing RILA block during 2024, compared to the prior year.

•$88 million unfavorable movements in market risk benefits (gains) losses, net, primarily due to less favorable movements in equity volatility and fund performance, partially offset by more favorable changes in interest rates in 2024 compared to the prior year.

Income Taxes

Income tax expense increased $42 million to an expense of $46 million for the year ended December 31, 2024, from an expense of $4 million for the year ended December 31, 2023.

The provision for income tax in the current period led to an effective tax rate ("ETR") of 5% for the year ended December 31, 2024, compared to an ETR of 1% for the year ended December 31, 2023. The change in the ETR during the year ended December 31, 2024 compared to the year ended December 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 foreign tax credits.