EX-99.2 3 fg2q2022financialsupplemen.htm EX-99.2 Document

Exhibit 99.2


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F&G Annuities & Life, Inc. (“F&G”) - An Operating Segment of Fidelity National Financial, Inc. (NYSE:FNF)         
Financial Supplement
June 30, 2022
(Year Ended December 31)

The financial statements and financial exhibits included herein are unaudited. F&G is an operating segment of FNF ("the Company") and these financial statements and exhibits should be read in conjunction with the Company's periodic reports on Form 10-K, Form 10-Q and Form 8-K. F&G was acquired by FNF on June 1, 2020.


All dollar amounts are presented in millions.

Non-GAAP Financial Measures

Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions and in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, this document includes non-GAAP financial measures, which the Company believes are useful to help investors better understand its financial performance, competitive position and prospects for the future. Management believes these non-GAAP financial measures may be useful in certain instances to provide additional meaningful comparisons between current results and results in prior operating periods. Our non-GAAP measures may not be comparable to similarly titled measures of other organizations because other organizations may not calculate such non-GAAP measures in the same manner as we do. The presentation of this financial information is not intended to be considered in isolation of or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. By disclosing these non-GAAP financial measures, the Company believes it offers investors a greater understanding of, and an enhanced level of transparency into, the means by which the Company’s management operates the Company. Any non-GAAP measures should be considered in context with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP net earnings, net earnings attributable to common shareholders, or any other measures derived in accordance with GAAP as measures of operating performance or liquidity. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are provided within.

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F&G - An Operating Segment of FNF
Financial Supplement - June 30, 2022
(All periods are unaudited)
Page
A. Financial Highlights
Consolidated Financial Highlights
Sales Results by Product
Condensed Consolidated Balance Sheets
Reconciliation of Total Shareholders' Equity to Total Shareholders' Equity Excluding AOCI
Condensed Consolidated Statements of Earnings
Reconciliation from Net Earnings to Adjusted Net Earnings
Notable Items
Adjusted Net Earnings Statement
Financial Strength Ratings
B. Product Summary
Total Product Net Investment Spread
FIA Net Investment Spread
Assets Under Management Rollforward and Average Assets Under Management
Annuity Account Balance Rollforward
Annuity Liability Characteristics
C. Investment Summary
Summary of Invested Assets by Asset Class
Credit Quality of Fixed Maturity Securities
Summary of Residential Mortgage Backed Securities by Collateral Type and NAIC Designation
D. Counterparty Risk
Top 5 Reinsurers
16
E. Non-GAAP Financial Measures

2
F&G - An Operating Segment of FNF
Financial Supplement - June 30, 2022
(All periods are unaudited)

Consolidated Financial Highlights
Three months endedSix months ended
June 30, 2022March 31, 2022December 31, 2021September 30, 2021June 30, 2021June 30, 2022June 30, 2021
Select Income Statement Data:
Net earnings attributable to common shareholders230 236 121 373 82 466 371 
Adjusted net earnings attributable to common shareholders ("Adjusted net earnings") (a) (c)128 82 90 101 92 210 170 
Select Metrics:
Average assets under management ("AAUM") (a)39,306 37,459 35,699 32,692 30,423 38,351 29,722 
Assets under management ("AUM") (a)40,322 38,601 36,494 34,665 31,760 40,322 31,760 
Net investment spread (a) (d)2.62 %2.76 %2.78 %2.75 %2.85 %2.70 %2.65 %
Adjusted return on assets (a) (b) (c)1.10 %0.88 %1.13 %1.18 %1.14 %1.10 %1.14 %
        
(a) Refer to "Non-GAAP Financial Measures Definitions"
(b) Adjusted return on assets is calculated on a year to date ("YTD") basis.
(c) Refer to page 7 "Notable Items" for further explanation of trends.
(d) Prior periods have been restated to reflect immaterial adjustments management identified in Q2 2022.
Sales Results by Product

Three months endedSix months ended
June 30, 2022March 31, 2022December 31, 2021September 30, 2021June 30, 2021June 30, 2022June 30, 2021
Sales (a)
Fixed indexed annuities (FIA)1,114 962 1,055 1,073 1,135 2,076 2,182 
Fixed rate annuities (MYGA)1,087 473 301 458 512 1,560 979 
Total annuity2,201 1,435 1,356 1,531 1,647 3,636 3,161 
Indexed universal life (IUL)29 27 28 24 20 56 35 
Funding agreements (FABN/FHLB)843 600 35 1,150 1,000 1,443 1,125 
Pension risk transfer (PRT)— 527 776 371 — 527 — 
Total Gross Sales3,073 2,589 2,195 3,076 2,667 5,662 4,321 
Sales attributable to flow reinsurance to third parties(544)(236)(151)(229)(255)(780)(489)
Total Net Sales$2,529 $2,353 $2,044 $2,847 $2,412 $4,882 $3,832 
(a) Refer to "Non-GAAP Financial Measures Definitions."





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F&G - An Operating Segment of FNF
Financial Supplement - June 30, 2022
(All periods are unaudited)
            
Condensed Consolidated Balance Sheets
June 30, 2022March 31, 2022December 31, 2021September 30, 2021June 30, 2021
Assets
Investments:
Fixed maturity securities available for sale, at fair value, net of allowance for credit losses of $5 at June 30, 2022$28,398 $29,478 $29,962 $28,550 $27,616 
Preferred securities, at fair value839 934 1,028 870 882 
Equity securities, at fair value119 139 143 156 176 
Derivative investments145 487 816 581 691 
Mortgage loans, net of allowance for credit losses of $35 at June 30, 20224,437 4,217 3,749 3,484 2,794 
Investments in unconsolidated affiliates2,668 2,696 2,350 2,022 1,667 
Other long-term investments528 510 489 454 448 
Short-term investments823 387 373 258 356 
Total investments$37,957 $38,848 $38,910 $36,375 $34,630 
Cash and cash equivalents992 1,168 1,533 2,320 1,016 
Trade and notes receivables3 3 3 11 11 
Reinsurance recoverable, net of allowance for credit losses of $19 at June 30, 2022 (a)4,215 3,801 3,610 3,492 3,297 
Goodwill (a)1,756 1,756 1,756 1,756 1,756 
Prepaid expenses and other assets1,000 625 613 662 415 
Lease assets9 9 8 8 8 
Other intangible assets, net (a)3,143 2,699 2,234 2,086 2,060 
Property and equipment, net14 14 13 13 13 
Income taxes receivable64 46 50 — — 
Deferred tax asset (a)473 142 — — 51 
Total assets$49,626 $49,111 $48,730 $46,723 $43,257 
(a) These line items included adjustments that were recorded during the remeasurement period subsequent to the June 1, 2020 acquisition. The following adjustments were recorded as of the opening balance sheet at June 1, 2020 during the quarter ending June 30, 2021: Reinsurance recoverable, ($289), Goodwill, $5, Other intangible assets, net, $61, and Deferred tax asset, $1.
4
F&G - An Operating Segment of FNF
Financial Supplement - June 30, 2022
(All periods are unaudited)
Condensed Consolidated Balance Sheets (continued)
June 30, 2022March 31, 2022December 31, 2021September 30, 2021June 30, 2021
Liabilities and Shareholders' Equity
Contractholder funds$37,707 $36,237 $35,525 $33,988 $32,166 
Future policy benefits (b)5,177 5,217 4,732 3,985 3,670 
Accounts payable and accrued liabilities (b)1,384 1,536 1,297 1,670 1,276 
Income taxes payable— — — 3 17 
Deferred tax liability— — 24 9 — 
Notes payable573 975 977 979 589 
Funds withheld for reinsurance liabilities2,277 1,852 1,676 1,508 1,271 
Lease liabilities14 14 14 14 14 
Total liabilities$47,132 $45,831 $44,245 $42,156 $39,003 
Shareholders' equity:
Additional paid-in-capital3,156 2,753 2,750 2,748 2,746 
Retained earnings1,468 1,238 1,001 880 507 
Accumulated other comprehensive (loss) income ("AOCI")(2,130)(711)734 939 1,001 
Total shareholders' equity$2,494 $3,280 $4,485 $4,567 $4,254 
Total liabilities and shareholders' equity$49,626 $49,111 $48,730 $46,723 $43,257 
        
(b) These line items included adjustments that were recorded during the remeasurement period subsequent to the June 1, 2020 acquisition. The following adjustments were recorded as of the opening balance sheet at June 1, 2020 during the quarter ending June 30, 2021: Future policy benefits, ($228), and Accounts payable and accrued liabilities, $6.




Reconciliation of Total Shareholders' Equity to Total Shareholders' Equity Excluding AOCI
June 30, 2022March 31, 2022December 31, 2021September 30, 2021June 30, 2021
Total shareholders' equity$2,494 $3,280 $4,485 $4,567 $4,254 
Less: AOCI(2,130)(711)734 939 1,001 
Total shareholders' equity excluding AOCI (c)$4,624 $3,991 $3,751 $3,628 $3,253 
(c) Refer to "Non-GAAP Financial Measures Definitions"


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F&G - An Operating Segment of FNF
Financial Supplement - June 30, 2022
(All periods are unaudited)
Condensed Consolidated Statements of Earnings
Three months endedSix months ended
June 30, 2022March 31, 2022December 31, 2021September 30, 2021June 30, 2021June 30, 2022June 30, 2021
Revenues:
Life insurance premiums and other fees (a)$68 $594 $838 $431 $62 $662 $126 
Interest and investment income425 451 511 481 487 876 860 
Recognized gains and losses, net(426)(297)345 15 253 (723)355 
      Total revenues67 748 1,694 927 802 815 1,341 
Benefits and expenses:
Benefits and other changes in policy reserves(418)208 1,404 185 575 (210)549 
Personnel costs34 30 36 32 32 64 61 
Other operating expenses31 18 29 22 26 49 54 
Depreciation and amortization121 143 65 210 65 264 209 
Interest expense9 8 8 6 7 17 15 
      Total benefits and expenses(223)407 1,542 455 705 184 888 
Pre-tax earnings290 341 152 472 97 631 453 
Income tax expense(60)(105)(31)(96)(21)(165)(93)
Net earnings from continuing operations230 236 121 376 76 466 360 
   (Loss) earnings from discontinued operations, net of tax— — — (3)6 — 11 
Net earnings attributable to common shareholders$230 $236 $121 $373 $82 $466 $371 

(a) Included within "Escrow, title-related and other fees" in FNF 10-K/ 10-Q.
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F&G - An Operating Segment of FNF
Financial Supplement - June 30, 2022
(All periods are unaudited)

Reconciliation from Net Earnings to Adjusted Net Earnings (a)
Three months endedSix months ended
June 30, 2022March 31, 2022December 31, 2021September 30, 2021June 30, 2021June 30, 2022June 30, 2021
Net earnings from continuing operations$230 $236 $121 $376 $76 $466 $360 
Non-GAAP adjustments (a):
Recognized (gains) and losses, net21 (33)(76)(98)(63)(12)(145)
Indexed product related derivatives(159)(168)32 26 75 (327)(110)
Purchase price amortization5 6 6 7 6 11 13 
Transaction costs4 — — 1 2 4 4 
Other non-recurring items (b)— — — (284)— — — 
Income taxes on non-GAAP adjustments27 41 7 73 (4)68 48 
Adjusted net earnings (a)$128 $82 $90 $101 $92 $210 $170 



Notable Items
Each quarterly reporting period, we identify notable items that help explain the trends in our Adjusted net earnings as we believe these items provide further clarity to the financial performance of the business.
Three months endedSix months ended
June 30, 2022March 31, 2022December 31, 2021September 30, 2021June 30, 2021June 30, 2022June 30, 2021
Adjusted net earnings (a)$128 $82 $90 $101 $92 $210 $170 
Notable items [(unfavorable)/favorable]
Benefits and other changes in policy reserves (c)2 4 (7)7 3 6 10 
Assumption review and unlocking (d)30 — — — 8 30 8 
Other notable items (e)4 (20)10 20 11 (16)16 

(a) Refer to "Non-GAAP Financial Measures Definitions."
(b) Reflects adjustments to benefits and other changes in policy reserves and depreciation and amortization resulting from the implementation of a new actuarial valuation system.
(c) Reflects the after tax impact to adjusted net earnings for certain actuarial adjustments to benefits and other changes in policy reserves related to timing, volume and magnitude of experience, excluding assumption review and unlocking.
(d) Reflects unlocking from updating our SOP 03-1 reserves, DAC, VOBA, DSI and cost of reinsurance amortization models for actual experience and equity market fluctuations.
(e) Costs incurred during research and exploration of potential merger or acquisition of a business or a group of insurance policies via asset acquisition or (inforce) reinsurance agreement, income from bond prepayment and CLO redemptions, changes in tax valuation and other net activity.


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F&G - An Operating Segment of FNF
Financial Supplement - June 30, 2022
(All periods are unaudited)


Adjusted Net Earnings Statement (a)
Three months endedSix months ended
June 30, 2022March 31, 2022December 31, 2021September 30, 2021June 30, 2021June 30, 2022June 30, 2021
Revenues:
      Life insurance premiums and other fees (b) (i)$89 $593 $840 $430 $62 $682 $126 
      Interest and investment income (c)463 448 431 381 377 911 710 
      Recognized gains and losses, net (d)— — — — — — — 
          Total revenues552 1,041 1,271 811 439 1,593 836 
Benefits and expenses:
      Benefits and other changes in policy reserves (e) (i)229 775 1,023 577 214 1,004 402 
      Personnel costs35 30 36 32 32 65 61 
      Other operating expenses (f)28 18 29 22 24 46 50 
      Depreciation and amortization (g)91 64 61 49 46 155 94 
      Interest expense9 8 9 6 7 17 15 
         Total benefits and expenses392 895 1,158 686 323 1,287 622 
Pre-tax earnings160 146 113 125 116 306 214 
 Income tax expense(32)(64)(23)(24)(24)(96)(44)
Adjusted net earnings (a)$128 $82 $90 $101 $92 $210 $170 
Notable items included in Adjusted net earnings (h)$36 $(16)$3 $27 $22 $20 $34 

(a) Refer to "Non-GAAP Financial Measures Definitions."
(b) Life insurance premiums and other fees are included within "Escrow, title-related and other fees" in FNF 10-K/ 10-Q, and have been adjusted to remove primarily the impact of unearned revenue on the adjustments below.
(c) Interest and investment income has been adjusted to remove the market volatility on the alternative investment portfolio that differ from management's expectation of returns over the life of these assets.
(d) Recognized gains and losses (net) have been adjusted to remove the effect of recognized (gains) losses including changes in allowance for expected credit losses and OTTI; changes in fair values of indexed product related derivatives and embedded derivatives, net of hedging costs; and the change in fair value of the reinsurance related embedded derivative.
(e) Benefits and other changes in policy reserves has been adjusted to remove the effects of the changes in fair values of indexed product embedded derivatives, changes in allowance for expected credit losses on reinsurance recoverables, the fair value impacts of assumed reinsurance, those resulting from the implementation of a new actuarial system at September 30, 2021, and changes in the SOP 03-1 reserve resulting from the adjustments above, as applicable.
(f) Other operating expenses have been adjusted to remove the effects of transaction costs.
(g) Depreciation and amortization has been adjusted to remove the impact on DAC, VOBA, and DSI of the adjustments above, as applicable, purchase price amortization and those resulting from the implementation of a new actuarial valuation system at September 30, 2021.
(h) Refer to page 7 "Notable Items" for further detail of notable items.
(i) Includes premiums from agreements related to our new PRT business beginning in the three months ended September 30, 2021.







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F&G - An Operating Segment of FNF
Financial Supplement - June 30, 2022
(All periods are unaudited)
Financial Strength Ratings
A.M. BestS&PFitchMoody's
Holding Company Ratings
F&G Annuities & Life, Inc.
Issuer Credit / Default RatingNot RatedBBB-BBBBa2
OutlookStableStablePositive
CF Bermuda Holdings Limited
Issuer Credit / Default RatingNot RatedBBB-BBBBa1
OutlookStableStablePositive
Fidelity & Guaranty Life Holdings, Inc.
Issuer Credit / Default Ratingbbb-BBB-BBBNot Rated
OutlookStableStableStable
Senior Unsecured Notesbbb-BBBBBBBaa2
OutlookStableStable
Operating Subsidiary Ratings
Fidelity & Guaranty Life Insurance Company
Financial Strength RatingA-A-A-Baa1
OutlookStableStableStablePositive
Fidelity & Guaranty Life Insurance Company of New York
Financial Strength RatingA-A- A-Not Rated
OutlookStableStableStable
F&G Life Re Ltd
Financial Strength RatingNot RatedA-A-Baa1
OutlookStableStablePositive
F&G Cayman Re Ltd
Financial Strength RatingNot RatedNot RatedA-Not Rated
OutlookStable
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F&G - An Operating Segment of FNF
Financial Supplement - June 30, 2022
(All periods are unaudited)
Total Product Net Investment Spread
Three months endedSix months ended
June 30, 2022March 31, 2022December 31, 2021September 30, 2021June 30, 2021June 30, 2022June 30, 2021
Net investment income$425 $451 $511 $481 $487 $876 $860 
AAUM (a)39,306 37,459 35,699 32,692 30,423 38,351 29,722 
Yield on AAUM (a)4.32 %4.82 %5.73 %5.89 %6.40 %4.57 %5.79 %
Alternative investment yield adjustment (a)0.39 %(0.04)%(0.90)%(1.23)%(1.43)%0.18 %(1.01)%
Adjusted Yield on AAUM (a)4.71 %4.78 %4.83 %4.66 %4.97 %4.75 %4.78 %
Interest credits (b)$94 $85 $84 $64 $73 $179 $147 
Option & futures costs (b)99 92 88 82 77 191 149 
Total interest credited and option costs (b)$193 $177 $172 $146 $150 $370 $296 
   Average account value (b)37,009 35,247 33,601 30,562 28,273 36,110 27,762 
  Interest credited & option cost (b)2.09 %2.02 %2.05 %1.91 %2.12 %2.05 %2.13 %
   Net investment spread (a) (b)2.62 %2.76 %2.78 %2.75 %2.85 %2.70 %2.65 %
(a) Refer to "Non-GAAP Financial Measures Definitions."
(b) Prior periods have been restated to reflect immaterial adjustments management identified in Q2 2022.


















10
F&G - An Operating Segment of FNF
Financial Supplement - June 30, 2022
(All periods are unaudited)

FIA Net Investment Spread
Three months endedSix months ended
June 30, 2022March 31, 2022December 31, 2021September 30, 2021June 30, 2021June 30, 2022June 30, 2021
Net investment income (b)$290 $312 $366 $368 $377 $602 $653 
AAUM (a)24,704 23,717 22,824 22,146 20,896 24,275 20,551 
Yield on AAUM (a) (b)4.70 %5.27 %6.42 %6.65 %7.22 %4.96 %6.35 %
Alternative investment yield adjustment (a)0.44 %(0.16)%(1.19)%(1.81)%(2.20)%0.14 %(1.52)%
Adjusted Yield on AAUM (a) (b)5.14 %5.11 %5.23 %4.84 %5.02 %5.10 %4.83 %
Interest credits$9 $9 $9 $2 $13 $18 $28 
Option & futures costs88 84 80 75 70 172 135 
Total interest credited and option costs$97 $93 $89 $77 $83 $190 $163 
   Average account value22,888 22,244 21,513 20,680 19,842 22,571 19,443 
  Interest credited & option cost1.70 %1.67 %1.65 %1.49 %1.67 %1.68 %1.68 %
   Net investment spread (a) (b)3.44 %3.44 %3.58 %3.35 %3.35 %3.42 %3.15 %

(a) Refer to "Non-GAAP Financial Measures Definitions."
(b) Prior periods have been restated to reflect immaterial adjustments management identified in Q2 2022.

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F&G - An Operating Segment of FNF
Financial Supplement - June 30, 2022
(All periods are unaudited)


Assets Under Management Rollforward and Average Assets Under Management

Three months endedSix months ended
June 30, 2022March 31, 2022December 31, 2021September 30, 2021June 30, 2021June 30, 2022June 30, 2021
AUM at beginning of period (a)$38,601 $36,494 $34,665 $31,760 $29,700 $36,494 $28,553 
Net new business asset flows2,271 2,223 2,050 2,747 2,327 4,494 3,596 
Net reinsurance and other transactions(550)(116)(221)158 (267)(666)(389)
AUM at end of period (a)$40,322 $38,601 $36,494 $34,665 $31,760 $40,322 $31,760 
AAUM (a)$39,306 $37,459 $35,699 $32,692 $30,423 $38,351 $29,722 

Annuity Account Balance Rollforward (b)
Three months endedSix months ended
June 30, 2022March 31, 2022December 31, 2021September 30, 2021June 30, 2021June 30, 2022June 30, 2021
Account balances at beginning of period:$27,331 $26,673 $25,662 $24,774 $23,803 $26,673 $22,992 
Net deposits1,673 1,073 1,321 1,311 1,390 2,746 2,655 
Surrenders, withdrawals, deaths, etc.(596)(539)(517)(625)(628)(1,135)(1,213)
Net flows1,077 534 804 686 762 1,611 1,442 
Premium and interest bonuses21 22 23 20 21 43 39 
Fixed interest credited and index credits91 142 226 217 225 233 373 
Guaranteed product rider fees(42)(40)(42)(35)(37)(82)(72)
Account balance at end of period$28,478 $27,331 $26,673 $25,662 $24,774 $28,478 $24,774 

(a) Refer to "Non-GAAP Financial Measures Definitions."
(b) The rollforward reflects the vested account balance of our fixed index annuities and fixed rate annuities, net of reinsurance.
12
F&G - An Operating Segment of FNF
Financial Supplement - June 30, 2022
(All periods are unaudited)

Annuity Liability Characteristics
Fixed Annuities Account ValueFixed Index Annuities Account Value
June 30, 2022
SURRENDER CHARGE PERCENTAGES:
No surrender charge$338 $2,631 
0.0% < 2.0%20 119 
2.0% < 4.0%41 856 
4.0% < 6.0%832 2,226 
6.0% < 8.0%1,484 3,627 
8.0% < 10.0%2,543 8,248 
10.0% or greater— 5,513 
$5,258 $23,220 
Fixed Annuities Account ValueFixed Index Annuities Account Value
June 30, 2022
CREDITED RATE (INCLUDING BONUS INTEREST) VS. ULTIMATE MINIMUM GUARANTEED RATE DIFFERENTIAL:
No differential$543 $1,393 
0.0% - 1.0%621 1,126 
1.0% - 2.0%1,719 12 
2.0% - 3.0%2,283 — 
3.0% - 4.0%92 — 
Allocated to index strategies— 20,689 
$5,258 $23,220 








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F&G - An Operating Segment of FNF
Financial Supplement - June 30, 2022
(All periods are unaudited)


Summary of Invested Assets by Asset Class
June 30, 2022December 31, 2021
Amortized CostFair ValuePercentAmortized CostFair ValuePercent
Fixed maturity securities, available for sale:
United States Government full faith and credit$214 $212 1 %$50 $50 — %
United States Government sponsored entities52 50 — %74 74 — %
United States municipalities, states and territories1,428 1,253 3 %1,386 1,441 4 %
Foreign Governments186 153 1 %197 205 1 %
Corporate securities:
Finance, insurance and real estate5,484 4,834 13 %4,881 5,109 13 %
Manufacturing, construction and mining884 746 2 %880 932 2 %
Utilities, energy and related sectors2,857 2,335 6 %2,881 2,987 8 %
Wholesale/retail trade2,520 2,059 5 %2,503 2,627 7 %
Services, media and other3,304 2,674 7 %3,227 3,349 8 %
Hybrid securities801 743 2 %812 881 2 %
Non-agency residential mortgage-backed securities917 845 2 %648 648 2 %
Commercial mortgage-backed securities3,116 3,046 8 %2,669 2,964 7 %
Asset-backed securities5,644 5,319 14 %4,514 4,550 12 %
CLO securities4,321 4,129 11 %4,002 4,145 11 %
Total fixed maturity securities, available for sale$31,728 $28,398 75 %$28,724 $29,962 77 %
Equity securities1,099 958 3 %1,135 1,171 3 %
Alternative investments:
Private equity1,351 1,351 4 %1,181 1,181 3 %
Real assets388 381 1 %339 340 1 %
Credit936 936 2 %829 829 2 %
Commercial mortgage loans2,315 2,119 6 %2,168 2,265 6 %
Residential mortgage loans2,122 1,971 5 %1,581 1,549 4 %
Other (primarily derivatives and company owned life insurance)587 673 2 %971 1,305 3 %
Short term investments822 823 2 %373 373 1 %
Total (a)$41,348 $37,610 100 %$37,301 $38,975 100 %
(a) Asset duration of 5.4 years and 6.4 years vs. liability duration of 5.7 years and 7.1 years for the periods ending June 30, 2022 and December 31, 2021, respectively.



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F&G - An Operating Segment of FNF
Financial Supplement - June 30, 2022
(All periods are unaudited)

Credit Quality of Fixed Maturity Securities
June 30, 2022
NAIC DesignationFair ValuePercent
1$16,033 56 %
210,121 36 %
31,571 6 %
4532 2 %
580 — %
661 — %
$28,398 100 %

June 30, 2022
Rating Agency RatingFair ValuePercent
AAA$989 3 %
AA1,990 7 %
A7,092 25 %
BBB8,519 30 %
Not rated7,796 28 %
Total investment grade26,386 93 %
BB1,049 4 %
B and below362 1 %
Not rated601 2 %
Total below investment grade2,012 7 %
$28,398 100 %

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F&G - An Operating Segment of FNF
Financial Supplement - June 30, 2022
(All periods are unaudited)
Summary of Residential Mortgage Backed Securities by Collateral Type and NAIC Designation
June 30, 2022
Total by collateral typeAmortized CostFair Value
Government Agency$52 $50 
Prime800 736 
Subprime49 46 
Alt-A68 62 
$969 $894 
June 30, 2022
Total by NAIC designationAmortized CostFair Value
1$944 $871 
216 15 
34 3 
44 4 
51 1 
$969 $894 
    


Top 5 Reinsurers

June 30, 2022
Financial Strength Rating
Parent Company/Principal ReinsurersReinsurance Recoverable (a)AM BestS&PFitchMoody's
Aspida Life Re Ltd$1,651  A-  not rated  not rated  not rated
Wilton Re1,259  A+  not rated  A+  not rated
Somerset Reinsurance Ltd626  A-  BBB+  not rated  not rated
London Life Reinsurance Co.101  A+  not rated  not rated  not rated
Security Life of Denver99  not rated  A-  A-  Baa1

(a) Reinsurance recoverables do not include unearned ceded premiums that would be recovered in the event of early termination of certain traditional life policies.

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F&G - An Operating Segment of FNF
Financial Supplement - June 30, 2022
(All periods are unaudited)
Non-GAAP Financial Measures Definitions
The following represents the definitions of non-GAAP measures used by F&G, as an operating segment of FNF:
Adjusted Net Earnings Attributable to Common Shareholders (Adjusted Net Earnings)
Adjusted net earnings is a non-GAAP economic measure we use to evaluate financial performance each period. Adjusted net earnings is calculated by adjusting net earnings (loss) from continuing operations attributable to common shareholders to eliminate:
(i) Recognized (gains) and losses, net: the impact of net investment gains/losses, including changes in allowance for expected credit losses and other than temporary impairment ("OTTI") losses, recognized in operations; the impact of market volatility on the alternative asset portfolio that differ from management's expectation of returns over the life of these assets; and the effect of changes in fair value of the reinsurance related embedded derivative;
(ii) Indexed product related derivatives: the impacts related to changes in the fair value, including both realized and unrealized gains and losses, of index product related derivatives and embedded derivatives, net of hedging cost;
(iii) Purchase price amortization: the impacts related to the amortization of certain intangibles (internally developed software, trademarks and value of distribution asset ("VODA")) recognized as a result of acquisition activities;
(iv) Transaction costs: the impacts related to acquisition, integration and merger related items; and
(v) Other "non-recurring", "infrequent" or "unusual items": Management excludes certain items determined to be “non-recurring”, “infrequent” or “unusual” from adjusted net earnings when incurred if it is determined these expenses are not a reflection of the core business and when the nature of the item is such that it is not reasonably likely to recur within two years and/or there was not a similar item in the preceding two years.
Adjustments to adjusted net earnings are net of the corresponding impact on amortization of intangibles, as appropriate. The income tax impact related to these adjustments is measured using an effective tax rate, as appropriate by tax jurisdiction. While these adjustments are an integral part of the overall performance of F&G, market conditions and/or the non-operating nature of these items can overshadow the underlying performance of the core business. Accordingly, management considers this to be a useful measure internally and to investors and analysts in analyzing the trends of our operations. Adjusted net earnings should not be used as a substitute for net earnings (loss). However, we believe the adjustments made to net earnings (loss) in order to derive adjusted net earnings provide an understanding of our overall results of operations.
Total Shareholders’ Equity Excluding AOCI
Total Shareholders’ Equity Excluding AOCI is based on Total Shareholders' Equity excluding the effect of AOCI. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments, Management considers this non-GAAP financial measure to provide useful supplemental information internally and to investors and analysts assessing the level of earned equity on Total Shareholders' Equity.
Assets Under Management (AUM)
AUM is calculated as the sum of:
(i) total invested assets at amortized cost, excluding derivatives, net of reinsurance qualifying for risk transfer in accordance with GAAP;
(ii) related party loans and investments;
(iii) accrued investment income;
(iv) the net payable/receivable for the purchase/sale of investments, and
(v) cash and cash equivalents excluding derivative collateral at the beginning of the period and the end of each month in the period, divided by the total number of months in the period plus one.
Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the rate of return on assets available for reinvestment.
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F&G - An Operating Segment of FNF
Financial Supplement - June 30, 2022
(All periods are unaudited)
Non-GAAP Financial Measures Definitions (continued)
Average Assets Under Management (AAUM)
AAUM is calculated as AUM at the beginning of the period and the end of each month in the period, divided by the total number of months in the period plus one.
Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the rate of return on assets available for reinvestment.
Yield on AAUM
Yield on AAUM is calculated by dividing annualized net investment income by AAUM. Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the level of return earned on AAUM.
Alternative Investment Yield Adjustment
Alternative investment yield adjustment is the current period yield impact of market volatility on the alternative investment portfolio that differ from management's expectation of returns over the life of these assets. Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the level of return earned on AAUM.
Adjusted Yield on AAUM
Adjusted Yield on AAUM is calculated by dividing annualized net investment income by AAUM, plus or minus the alternative investment yield adjustment. Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the level of return earned on AAUM.
Net Investment Spread
Net investment spread is the excess of net investment income, adjusted for market volatility on the alternative asset investment portfolio, earned over the sum of interest credited to policyholders and the cost of hedging our risk on indexed product policies. Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the performance of the Company’s invested assets against the level of investment return provided to policyholders, inclusive of hedging costs.
Adjusted Return on Assets
Adjusted Return on Assets is calculated by dividing annualized adjusted net earnings by year-to-date AAUM. Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing financial performance and profitability earned on AAUM.
Sales
Annuity, IUL, funding agreement and non-life contingent PRT sales are not derived from any specific GAAP income statement accounts or line items and should not be viewed as a substitute for any financial measure determined in accordance with GAAP. Sales from these products are recorded as deposit liabilities (i.e. contractholder funds) within the Company's consolidated financial statements in accordance with GAAP. Life contingent PRT sales are recorded as premiums in revenues within the consolidated financial statements. Management believes that presentation of sales, as measured for management purposes, enhances the understanding of our business and helps depict longer term trends that may not be apparent in the results of operations due to the timing of sales and revenue recognition.

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