EX-99.2 3 fg4q20inancialsupplementex.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
December 31, 2020
(Year Ended December 31)

The financial statements and financial exhibits included herein are unaudited. F&G is an operating segment of FNF 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 (formerly NYSE:FG) was acquired by FNF (the "Business Combination") on June 1, 2020 ("Closing Date"). As a result of the Business Combination, F&G delisted from the NYSE and became a subsidiary of FNF. Our financial statement presentation includes the financial statements of F&G and its subsidiaries as a standalone entity ("Pre-Merger") for the periods prior to the completion of the Business Combination, and F&G and its subsidiaries as an operating segment of FNF ("Post-Merger") for periods from and after the Closing Date. The current period year-to-date information presented within represents the 7-month period from the close of the acquisition on June 1, 2020, to the end of the year on December 31, 2020. As no comparable prior period exists, we have not included prior period year-to-date information.

All dollar amounts are presented in millions.

Non-GAAP Financial Measures

This document contains certain non-GAAP financial measures commonly used in our industry that, together with the relevant GAAP measures, may enhance a user’s ability to analyze the Company's operating performance and capital position for the periods presented. These measures should be considered supplementary to our results in accordance with GAAP and should not be viewed as a substitute for the GAAP measures and are not intended to replace GAAP financial results. 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. Refer to the non-GAAP measures reconciliations and definitions within for further information.




1
F&G - An Operating Segment of FNF
Financial Supplement - December 31, 2020
(All periods are unaudited)

Page
Sales Results by Product
4
Reconciliation of Total Shareholders' Equity to Common Shareholders' Equity Excluding AOCI
Financial Strength Ratings
Total Product Net Investment Spread
FIA Net Investment Spread

2
F&G - An Operating Segment of FNF
Financial Supplement - December 31, 2020
(All periods are unaudited)

Consolidated Financial Highlights

Three months endedOne month endedTwo months endedThree months endedSeven months ended
December 31, 2020September 30, 2020June 30, 2020May 31, 2020March 31, 2020December 31, 2019December 31, 2020
Post-MergerPost-MergerPost-MergerPre-MergerPre-MergerPre-MergerPost-Merger
Select Income Statement Data:
Net earnings (loss) attributable to common shareholders137 38 (39)19 (346)217 136 
Adjusted net earnings (loss) attributable to common shareholders (1)128 74 33 40 33 94 235 
Select Metrics:
Average Assets Under Management ("AAUM") (1)27,864 26,990 26,582 29,285 28,924 28,332 27,322 
Net investment spread (1)2.55 %2.62 %3.50 %1.92 %2.24 %2.41 %2.74 %
(1) Refer to "Non-GAAP Financial Measures Definitions"


Sales Results by Product

The table below provides a summary of sales, which are not affected by the June 1, 2020, Business Combination and are comparable to prior period data.
Three months endedTwelve months ended
December 31, 2020September 30, 2020June 30, 2020March 31, 2020December 31, 2019December 31, 2020December 31, 2019
Sales
FIA947 815 866 831 795 3,459 2,820 
Fixed rate annuities (MYGA)362 253 47 114 126 776 776 
Institutional spread based100 — — 100 — 200 297 
Total annuity1,409 1,068 913 1,045 921 4,435 3,893 
Index universal life13 14 12 11 11 50 38 
Flow reinsurance37 51 142 122 122 352 394 
Total Sales$1,459 $1,133 $1,067 $1,178 $1,054 $4,837 4,325 

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F&G - An Operating Segment of FNF
Financial Supplement - December 31, 2020
(All periods are unaudited)


Appendix to Consolidated Financial Highlights
Effective June 1, 2020, certain blocks of business were designated as discontinued operations by FNF. Amounts related to these blocks of business are presented herein as adjustments to key financial metrics, solely for comparison between Pre-Merger and Post-Merger periods. See FNF 10-K/ 10-Q for further discussion on discontinued operations.

Three months endedOne month endedTwo months endedThree months endedSeven months ended
December 31, 2020September 30, 2020June 30, 2020May 31, 2020March 31, 2020December 31, 2019December 31, 2020
Post-MergerPost-MergerPost-MergerPre-MergerPre-MergerPre-MergerPost-Merger
Select Income Statement Data:
Net earnings (loss) attributable to common shareholders137 38 (39)19 (346)$217 $136 
   Less: discontinued operations [(earnings)/loss] 2 28 (5)(22)155 (46)25 
As adjusted for discontinued operations139 66 (44)(3)(191)171 161 
Adjusted net earnings (loss) attributable to common shareholders (1)128 74 33 40 33 94 235 
   Less: discontinued operations [(earnings)/loss]— — — 8 26 (4)— 
As adjusted for discontinued operations128 74 33 48 59 90 235 
Less: Notable items [(unfavorable)/favorable] (2)68 10 8 5 (6)15 86 
As adjusted for discontinued operations and notable items$60 $64 $25 $43 $65 $75 $149 
Select Metrics:
AAUM (1)27,864 26,990 26,582 29,285 28,924 28,332 27,322 
   Less: discontinued operations — — — (2,236)(2,266)(2,183)— 
As adjusted for discontinued operations27,864 26,990 26,582 27,049 26,658 26,149 27,322 
Net investment spread (1)2.55 %2.62 %3.50 %1.92 %2.24 %2.41 %2.74 %
   Less: discontinued operations [(earnings)/loss] (3)— %— %— %0.13 %0.09 %0.03 %— %
As adjusted for discontinued operations2.55 %2.62 %3.50 %2.05 %2.33 %2.44 %2.74 %
(1) Refer to "Non-GAAP Financial Measures Definitions"
(2) Notable items from continuing operations. For full list of notable items, refer to page 8 "Notable Items"
(3) Subsequent to the release of the Quarterly Financial Supplement dated August 4, 2020, management identified an immaterial adjustment that was needed to reflect the correct amount in the prior period. Periods affected were the two months ended May 31, 2020 and the three months ended March 31, 2020


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F&G - An Operating Segment of FNF
Financial Supplement - December 31, 2020
(All periods are unaudited)

            
Condensed Consolidated Balance Sheets

December 31, 2020September 30, 2020June 30, 2020March 31,
2020		December 31, 2019
Post-MergerPost-MergerPost-MergerPre-MergerPre-Merger
Assets
Investments:
Fixed maturity securities available for sale, at fair value, net of allowance for credit losses of $9 at December 31, 2020$25,499 $24,218 $23,014 $21,140 $23,726 
Preferred securities, at fair value965 917 875 873 1,001 
Equity securities, at fair value82 54 54 42 70 
Derivative investments548 381 333 188 587 
Mortgage loans, net of allowance for credit losses of $39 at December 31, 20202,031 1,614 1,749 1,769 1,267 
Investments in unconsolidated affiliates (a)1,156 1,125 1,045 1,071 1,013 
Other long-term investments449 438 432 421 289 
Short-term investments456 34 38 36 38 
Total investments$31,186 28,781 27,540 25,540 27,991 
Cash and cash equivalents889 1,014 909 740 931 
Trade and notes receivables10 2 2 1 1 
Funds withheld for reinsurance receivable, at fair value— — — 2,050 2,172 
Reinsurance recoverable, net of allowance for credit losses of $21 at December 31, 2020 (a)3,174 3,152 3,182 3,186 3,213 
Goodwill (a)1,751 1,731 1,725 467 467 
Prepaid expenses and other assets413 448 381 384 355 
Lease assets8 7 8 9 9 
Other intangible assets, net (a)1,918 1,956 2,060 2,070 1,495 
Property and equipment, net11 7 2 2 2 
Income taxes receivable15 19 24 23 15 
Deferred tax asset (a)44 107 180 264 61 
Assets of discontinued operations327 2,618 2,502 — — 
Total assets$39,746 $39,842 $38,515 $34,736 $36,712 
(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 September 30, 2020: Investment in unconsolidated affiliates, $31, Goodwill, $6, Other intangible assets, net, ($37), and Deferred tax asset, $3. The following adjustments were recorded as of the opening balance sheet at June 1, 2020 during the quarter ending December 31, 2020: Goodwill, $20, Other intangible assets, net, ($56), Reinsurance recoverable, $47, and Deferred tax asset, $10.
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F&G - An Operating Segment of FNF
Financial Supplement - December 31, 2020
(All periods are unaudited)
Condensed Consolidated Balance Sheets (continued)
December 31, 2020September 30, 2020June 30, 2020March 31,
2020		December 31, 2019
Post-MergerPost-MergerPost-MergerPre-MergerPre-Merger
Liabilities and Shareholders' Equity
Contractholder funds (a)28,718 27,488 26,628 26,226 25,684 
Future policy benefits (a)4,010 4,048 4,092 5,658 5,735 
Accounts payable and accrued liabilities (a)1,174 1,056 983 1,007 1,167 
Notes payable589 589 589 543 542 
Funds withheld for reinsurance liabilities806 814 817 821 831 
Lease liabilities14 12 13 9 9 
Liabilities of discontinued operations361 2,462 2,347 — — 
Total liabilities35,672 36,469 35,469 34,264 33,968 
Shareholders' equity:
Additional paid-in-capital2,741 2,739 2,737 2,041 2,032 
Retained earnings (accumulated deficit)136 (1)(39)(72)300 
Accumulated other comprehensive income (loss)1,197 635 348 (1,428)481 
Treasury stock— — — (69)(69)
Total shareholders' equity4,074 3,373 3,046 472 2,744 
Total liabilities and shareholders' equity$39,746 $39,842 $38,515 $34,736 $36,712 
(a) Contractholder funds included a $3 adjustment that was recorded as of the opening balance sheet at June 1, 2020 during the quarter ending September 30, 2020. Additionally, Contractholder funds, Future policy benefits, and Accounts payable and accrued liabilities included ($5), ($7), and $33 adjustments as of the opening balance sheet at June 1, 2020, respectively, during the quarter ending December 31, 2020


Reconciliation of Total Shareholders' Equity to Total Common Shareholders' Equity Excluding AOCI
December 31, 2020September 30, 2020June 30, 2020March 31,
2020		December 31, 2019
Post-MergerPost-MergerPost-MergerPre-MergerPre-Merger
Total shareholders' equity4,074 3,373 3,046 472 2,744 
Equity attributable to preferred shareholders (1)— — — 446 438 
Common shareholders' equity (1)4,074 3,373 3,046 26 2,306 
AOCI1,197 635 348 (1,428)481 
Total common shareholders' equity excluding AOCI (1)$2,877 $2,738 $2,698 $1,454 $1,825 
(1) Refer to "Non-GAAP Financial Measures Definitions"


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F&G - An Operating Segment of FNF
Financial Supplement - December 31, 2020
(All periods are unaudited)
Condensed Consolidated Statements of Operations

Three months endedOne month endedTwo months endedThree months endedSeven months ended
December 31, 2020September 30, 2020June 30, 2020May 31, 2020March 31, 2020December 31, 2019December 31, 2020
Post-MergerPost-MergerPost-MergerPre-MergerPre-MergerPre-MergerPost-Merger
Revenues:
Life insurance premiums and other fees (a)$58 $60 $20 $52 $41 $43 $138 
Interest and investment income327 305 111 111 316 324 743 
Recognized gains and losses, net282 77 (7)257 (692)196 352 
      Total revenues667 442 124 420 (335)563 1,233 
Benefits and expenses:
Benefits and other changes in policy reserves460 251 155 356 (41)119 866 
Personnel costs33 23 9 15 21 21 65 
Other operating expenses30 33 12 40 74 64 75 
Depreciation and amortization64 56 3 1 (60)78 123 
Interest expense8 7 3 5 8 8 18 
      Total benefits and expenses595 370 182 417 2 290 1,147 
Pre-tax earnings (loss) from continuing operations72 72 (58)3 (337)273 86 
   Federal income tax expense68 (5)14 17 (1)(48)77 
   State income tax expense(1)(1)— (1)— — (2)
Net earnings (loss) from continuing operations139 66 (44)19 (338)225 161 
   Earnings from discontinued operations, net of tax(2)(28)5 — — — (25)
Less Preferred stock dividend— — — — (8)(8)— 
Net earnings (loss) attributable to common shareholders$137 $38 $(39)$19 $(346)$217 $136 
(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 - December 31, 2020
(All periods are unaudited)

Reconciliation from Net Earnings (Loss) to Adjusted Net Earnings (1)
Three Months EndedOne Months EndedTwo Months EndedThree Months EndedSeven months ended
December 31, 2020September 30, 2020June 30, 2020May 31, 2020March 31, 2020December 31, 2019December 31, 2020
Post-MergerPost-MergerPost-MergerPre-MergerPre-MergerPre-MergerPost-Merger
Net earnings (loss) from continuing operations$139 $66 $(44)$19 $(338)$225 $161 
Less Preferred stock dividend— — — — (8)(8)$— 
Net earnings (loss) from continuing operations attributable to common shareholders$139 $66 $(44)$19 $(346)$217 $161 
Non-GAAP adjustments (1):
Recognized (gains) and losses, net(76)(15)46 68 94 (34)(45)
Indexed product related derivatives54 14 43 (28)287 (134)111 
Purchase price amortization7 7 2 — — — 16 
Transaction costs and other non-recurring items4 10 7 4 34 11 21 
Income taxes on non-GAAP adjustments— (8)(21)(23)(36)34 (29)
Adjusted net earnings from continuing operations attributable to common shareholders (1)$128 $74 $33 $40 $33 $94 $235 


Notable Items
Each quarterly reporting period, we identify notable items that help explain the trends in our Net earnings (loss) from continuing operations attributable to common shareholders and Adjusted net earnings (loss) from continuing operations attributable to common shareholders as we believe these items provide further clarity to the financial performance of the business.
Three Months EndedOne Months EndedTwo Months EndedThree Months EndedSeven months ended
December 31, 2020September 30, 2020June 30, 2020May 31, 2020March 31, 2020December 31, 2019December 31, 2020
Post-MergerPost-MergerPost-MergerPre-MergerPre-MergerPre-MergerPost-Merger
Adjusted net earnings from continuing operations attributable to common shareholders (1)$128 $74 $33 $40 $33 $94 $235 
Notable items [(unfavorable)/favorable]
Single premium immediate annuities ("SPIA") mortality & other reserve adjustments (a)— 10 4 6 (5)15 14 
Assumption review and unlocking (b)— — — (4)— 4 — 
Other notable items (c)68 — 4 3 (27)5 72 
(1) Refer to "Non-GAAP Financial Measures Definitions"
(a) The release of annuity reserves associated with mortality of annuitants, which varies due to timing, volume and severity of experience, and other reserve adjustments.
(b) Reflects unlocking from updating our DAC, VOBA, DSI and cost of reinsurance amortization models for actual experience and equity market fluctuations.
(c) 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, bond prepayment income, changes in tax valuation, and other net activity.


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F&G - An Operating Segment of FNF
Financial Supplement - December 31, 2020
(All periods are unaudited)


Adjusted Net Earnings Statement (1)

Three Months EndedOne Months EndedTwo Months EndedThree Months EndedSeven months ended
December 31, 2020September 30, 2020June 30, 2020May 31, 2020March 31, 2020December 31, 2019December 31, 2020
Post-MergerPost-MergerPost-MergerPre-MergerPre-MergerPre-MergerPost-Merger
Revenues:
      Life insurance premiums and other fees (a)$61 $60 $20 $42 $53 $44 $141 
      Interest and investment income (b)315 314 120 200 317 $324 $749 
      Recognized gains and losses, net (c)— (1)1 22 (34)$23 $— 
          Total revenues376 373 141 264 336 $391 $890 
Benefits and expenses:
      Benefits and other changes in policy reserves (d)202 177 62 131 161 $151 $441 
      Personnel costs33 23 9 15 21 $21 $65 
      Other operating expenses (e)25 23 6 37 41 $53 $54 
      Depreciation and amortization (f)46 56 21 32 27 $42 $123 
      Interest expense8 7 3 5 8 $8 $18 
         Total benefits and expenses314 286 101 220 258 $275 $701 
Pre-tax earnings (loss) from continuing operations62 87 40 44 78 $116 $189 
 Federal income tax expense67 (12)(7)(5)(37)$(14)$48 
 State income tax expense(1)(1)— 1 — $— $(2)
Adjusted net earnings (1)128 74 33 40 41 $102 $235 
Less: Preferred stock dividend— — — — (8)$(8)$— 
Adjusted net earnings from continuing operations attributable to common shareholders (1)$128 $74 $33 $40 $33 $94 $235 
Notable items included in adjusted net earnings attibutable to common shareholders (2)$68 $10 $8 $5 $(32)$24 $86 

(1) Refer to "Non-GAAP Financial Measures Definitions"
(2) Refer to page 8 "Notable Items" for further detail of notable items.
(a) 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 here to remove the effect of cost of reinsurance.
(b) Interest and investment income has been adjusted to remove the market volatility on the alternative investment portfolio for periods after March 31, 2020.
(c) 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.
(d) 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, and changes in the SOP 03-1 reserve resulting from the adjustments above, as applicable.
(e) Other operating expenses have been adjusted to remove the effects of transaction costs.
(f) Depreciation and amortization has been adjusted to remove the impact on DAC, VOBA, and DSI of the adjustments above, as applicable, and purchase price amortization.






9
F&G - An Operating Segment of FNF
Financial Supplement - December 31, 2020
(All periods are unaudited)

Financial Strength Ratings
A.M. BestS&PFitchMoody's
Holding Company Ratings
F&G Annuities & Life, Inc. (formerly known as FGL Holdings)
Issuer Credit / Default RatingNot RatedBBB-BBBBa2
OutlookStableStableStable
CF Bermuda Holdings Limited
Issuer Credit / Default RatingNot RatedBBB-BBBBa1
OutlookStableStableStable
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
OutlookStableStableStableStable
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
OutlookStableStableStable
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 - December 31, 2020
(All periods are unaudited)


Total Product Net Investment Spread
Three Months EndedOne Months EndedTwo Months EndedThree Months EndedSeven months ended
December 31, 2020September 30, 2020June 30, 2020May 31, 2020March 31, 2020December 31, 2019December 31, 2020
Post-MergerPost-MergerPost-MergerPre-MergerPre-MergerPre-MergerPost-Merger
Net investment income$327 $305 $111 $111 $316 $324 $743 
AAUM (1)27,864 26,990 26,582 29,285 28,924 28,332 27,322 
Yield on AAUM (1)4.69 %4.52 %5.01 %2.27 %4.38 %4.57 %4.66 %
Alternative investment yield adjustment (1)(0.17)%0.13 %0.41 %1.83 %0.07 %
Adjusted Yield on AAUM (1)4.52 %4.65 %5.42 %4.10 %4.73 %
Interest credits$67 $67 $21 $53 $76 $76 $155 
Option & futures costs$63 $64 19 43 60 63 146 
Total interest credited and option costs$130 $131 $40 $96 $136 $139 $301 
   Average account value26,450 25,688 25,330 26,463 25,453 25,476 25,977 
  Interest credited & option cost1.97 %2.03 %1.92 %2.18 %2.14 %2.16 %1.99 %
   Net investment spread (1)2.55 %2.62 %3.50 %1.92 %2.24 %2.41 %2.74 %
(1) Refer to "Non-GAAP Financial Measures Definitions" for further details. Periods after April 1, 2020 include alternative investment yield adjustment.

















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F&G - An Operating Segment of FNF
Financial Supplement - December 31, 2020
(All periods are unaudited)



FIA Net Investment Spread
Three Months EndedOne Months EndedTwo Months EndedThree Months EndedSeven months ended
December 31, 2020September 30, 2020June 30, 2020May 31, 2020March 31, 2020December 31, 2019December 31, 2020
Post-MergerPost-MergerPost-MergerPre-MergerPre-MergerPre-MergerPost-Merger
Net investment income (1)$235 $215 $69 $51 $209 $220 $519 
AAUM (2)19,097 18,312 18,267 18,623 18,111 17,628 18,585 
Yield on AAUM (1) (2)4.92 %4.70 %4.53 %1.64 %4.62 %4.99 %4.79 %
Alternative investment yield adjustment (2) (0.25)%0.20 %0.59 %2.67 %0.10 %
Adjusted Yield on AAUM (1) (2)4.67 %4.90 %5.12 %4.31 %4.89 %
Interest credits$13 $14 $4 $8 $13 $14 $31 
Option & futures costs$63 $64 $19 $43 $60 $63 $146 
Total interest credited and option costs76 78 23 51 73 77 177 
   Average account value18,442 17,948 17,688 17,501 17,065 16,565 18,130 
  Interest credited & option cost1.65 %1.73 %1.59 %1.76 %1.72 %1.85 %1.68 %
   Net investment spread (1) (2)3.02 %3.17 %3.53 %2.55 %2.90 %3.14 %3.21 %

(1) We have restated prior period FIA net investment spread to reflect immaterial updates to FIA net investment income amounts. There was no impact to total product net investment spread amounts.
(2) Refer to "Non-GAAP Financial Measures Definitions" for further details. Periods after April 1, 2020 include alternative investment yield adjustment.



12
F&G - An Operating Segment of FNF
Financial Supplement - December 31, 2020
(All periods are unaudited)


Average Assets Under Management Rollforward

Three Months EndedOne Months EndedTwo Months EndedThree Months Ended
December 31, 2020September 30, 2020June 30, 2020May 31, 2020March 31, 2020December 31, 2019
Post-MergerPost-MergerPost-MergerPre-MergerPre-MergerPre-Merger
AAUM at beginning of period (1)$26,990 $26,582 $26,529 $28,924 $28,332 $27,871 
Net new business sales874 408 53 361 592 461 
AAUM at end of period$27,864 $26,990 $26,582 $29,285 $28,924 $28,332 
(1) Beginning balance for June 30, 2020 represents assets under management at June 1, 2020 and reflects $2.3 billion decrease from the exclusion of discontinued operations and $0.5 billion decrease from purchase accounting mark-to-market effect as compared to the May 31, 2020 ending balance.


Annuity Account Balance Rollforward (a)
Three Months EndedOne Months EndedTwo Months EndedThree Months Ended
December 31, 2020September 30, 2020June 30, 2020May 31, 2020March 31, 2020December 31, 2019
Post-MergerPost-MergerPost-MergerPre-MergerPre-MergerPre-Merger
Account balances at beginning of period:$22,106 $21,442 $21,332 $20,999 $20,402 $20,052 
Net deposits1,305 1,046 245 675 940 920 
Surrenders, withdrawals, deaths, etc.(533)(482)(161)(381)(452)(675)
Net flows772 564 84 294 488 245 
Premium and interest bonuses20 17 4 12 17 19 
Fixed interest credited and index credits131 114 29 50 123 118 
Guaranteed product rider fees(37)(31)(7)(23)(31)(32)
Account balance at end of period$22,992 $22,106 $21,442 $21,332 $20,999 $20,402 
(a) The rollforward reflects the vested account balance of our fixed index annuities and fixed rate annuities, net of reinsurance.
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F&G - An Operating Segment of FNF
Financial Supplement - December 31, 2020
(All periods are unaudited)

Annuity Liability Characteristics

Fixed Annuities Account ValueFixed Index Annuities Account Value
December 31, 2020
SURRENDER CHARGE PERCENTAGES:
No surrender charge$414 $2,346 
0.0% < 2.0%5 62 
2.0% < 4.0%26 488 
4.0% < 6.0%646 1,630 
6.0% < 8.0%1,499 2,288 
8.0% < 10.0%1,699 4,733 
10.0% or greater2 7,155 
$4,291 $18,702 


Fixed Annuities Account ValueFixed Index Annuities Account Value
December 31, 2020
CREDITED RATE (INCLUDING BONUS INTEREST) VS. ULTIMATE MINIMUM GUARANTEED RATE DIFFERENTIAL:
No differential$494 $1,297 
0.0% - 1.0%343 1,404 
1.0% - 2.0%1,155 24 
2.0% - 3.0%2,299 2 
Allocated to index strategies— 15,975 
$4,291 $18,702 






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F&G - An Operating Segment of FNF
Financial Supplement - December 31, 2020
(All periods are unaudited)


Summary of Invested Assets by Asset Class

December 31, 2020December 31, 2019
Post-MergerPre-Merger
Amortized CostFair ValuePercentAmortized CostFair ValuePercent
Fixed maturity securities, available for sale:
United States Government full faith and credit$45 $45 — %$33 $34 — %
United States Government sponsored entities105 106 — %133 134 — %
United States municipalities, states and territories1,243 1,309 4 %1,284 1,343 5 %
Foreign Governments128 140 — %138 155 1 %
Corporate securities:
Finance, insurance and real estate4,267 4,572 15 %4,038 4,234 15 %
Manufacturing, construction and mining839 936 3 %739 771 3 %
Utilities, energy and related sectors2,532 2,762 9 %2,345 2,452 9 %
Wholesale/retail trade1,900 2,106 7 %1,576 1,617 6 %
Services, media and other2,568 2,793 9 %2,353 2,523 9 %
Hybrid securities888 963 3 %983 1,027 4 %
Non-agency residential mortgage-backed securities677 694 2 %784 820 3 %
Commercial mortgage-backed securities2,468 2,806 9 %2,788 2,922 10 %
Asset-backed securities1,920 1,999 6 %1,774 1,813 6 %
CLO securities4,021 4,268 14 %3,946 3,881 14 %
Alternative investments1,148 1,156 4 %1,084 1,077 4 %
Equity securities959 1,047 3 %999 1,002 4 %
Commercial mortgage loans903 926 3 %422 435 1 %
Residential mortgage loans1,128 1,123 4 %845 848 3 %
Other (primarily derivatives and policy loans)815 997 4 %628 867 3 %
Short term investments456 456 1 %38 38 — %
Total (a)$29,010 $31,204 100 %$26,930 $27,993 100 %
(a) Asset duration of 6.84 years and 6.63 years vs. liability duration of 6.65 years and 6.80 years for the periods ending December 31, 2020 and December 31, 2019, respectively.




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F&G - An Operating Segment of FNF
Financial Supplement - December 31, 2020
(All periods are unaudited)
Credit Quality of Fixed Maturity Securities
December 31, 2020
NAIC DesignationFair ValuePercent
1$12,370 49 %
210,659 42 %
31,595 6 %
4700 3 %
5174 — %
61 — %
$25,499 100 %


December 31, 2020
Rating Agency RatingFair ValuePercent
AAA$488 2 %
AA1,590 6 %
A7,040 28 %
BBB9,669 38 %
Not rated4,336 17 %
Total investment grade23,123 91 %
BB1,493 6 %
B and below612 2 %
Not rated271 1 %
Total below investment grade2,376 9 %
$25,499 100 %

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F&G - An Operating Segment of FNF
Financial Supplement - December 31, 2020
(All periods are unaudited)
Summary of Residential Mortgage Backed Securities by Collateral Type and NAIC Designation

December 31, 2020
Total by collateral typeAmortized CostFair Value
Government agency$105 $106 
Prime512 527 
Subprime73 73 
Alt-A92 94 
$782 $800 
December 31, 2020
Total by NAIC designationAmortized CostFair Value
1$752 $768 
216 17 
38 8 
43 3 
53 4 
$782 $800 


Top 5 Reinsurers


December 31, 2020
Financial Strength Rating
Parent Company/Principal ReinsurersReinsurance Recoverable (a)AM BestS&PFitchMoody's
Wilton Re$1,481  A+  Not Rated A+Not Rated
Kubera Insurance (SAC) Ltd810  Not Rated Not RatedNot RatedNot Rated
Security Life of Denver165 Not RatedA+AA3
Hannover Re134 A+AA-Not RatedNot Rated
London Life108 A+Not RatedAANot Rated
(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 - December 31, 2020
(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
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 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; 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, and the fair value accounting impact of assumed reinsurance,
(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, and
(iv) Transaction costs: the impacts related to acquisition, integration and merger related items.
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.
Effective April 1, 2020, F&G changed their definition of Adjusted Earnings to exclude the impact of market volatility on the alternative asset portfolio. Alternative investment valuations and GAAP net income can reflect significant non-cash impacts of market and economic conditions that are not indicative of expected returns over the life of the investments. Management invests in alternative investments to back future policyholder obligations consistent with its asset liability management strategy. Management evaluates the performance of the alternative investments and calculates Adjusted Earnings using a rate of return that is consistent with its investment strategy and indicative of expected returns. Management believes this change provides users of the financial statements and other financial communications a more representative view of the results of the core business of F&G for the periods after April 1, 2020. Previous periods have not been adjusted.
Adjusted Net Earnings from Continuing Operations Attributable to Common Shareholders
Adjusted Net Earnings from continuing operations attributable to common shareholders is a non-GAAP economic measure we use to evaluate financial performance attributable to our common shareholders each period. Adjusted net earnings from continuing operations attributable to common shareholders is calculated by adjusting net earnings (loss) available to common shareholders to eliminate the same items as described in the Adjusted Net Earnings paragraph above. While these adjustments are an integral part of the overall performance of the Company, 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.
Common Shareholders’ Equity
Common Shareholders’ Equity is based on Total Shareholders’ Equity excluding Equity Available to Preferred Shareholders. Management considers this to be a useful measure internally and to investors to assess the level of equity that is attributable common stock holders.
Common Shareholders’ Equity Excluding AOCI
Common Shareholders’ Equity Excluding AOCI is based on Common 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 common equity.
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F&G - An Operating Segment of FNF
Financial Supplement - December 31, 2020
(All periods are unaudited)
Equity Attributable to Preferred Shareholders
Equity attributable to preferred shareholders is equal to the product of (a) the number of preferred shares outstanding plus share dividends declared but not yet issued and (b) the original liquidation preference amount per share. Management considers this non-GAAP measure to provide useful information internally and to investors and analysts to assess the level of equity that is attributable to preferred stock holders. (Note: F&G no longer has any preferred shareholders following the Business Combination)
Average Assets Under Management (AAUM)
AAUM is calculated as the sum of:
(i) total invested assets at amortized cost, excluding derivatives;
(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.
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. 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.

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