F&G Annuities & Life Reports Second Quarter 2024 Results
F&G Annuities & Life (NYSE: FG) reported strong Q2 2024 results, with net earnings of $198 million ($1.55 per share) and adjusted net earnings of $139 million ($1.10 per share). The company achieved record gross sales of $4.4 billion, a 47% increase year-over-year, driven by strong retail and institutional sales. Assets under management reached $52.2 billion, up 13% from Q2 2023. F&G's performance was bolstered by strong demand for its products, investment performance, and disciplined expense management. The company returned $32 million to shareholders through dividends and remains on track to meet its Investor Day targets.
F&G Annuities & Life (NYSE: FG) ha riportato risultati solidi per il secondo trimestre del 2024, con utili netti di 198 milioni di dollari (1,55 dollari per azione) e utili netti rettificati di 139 milioni di dollari (1,10 dollari per azione). L'azienda ha raggiunto vendite lorde record di 4,4 miliardi di dollari, con un aumento del 47% rispetto all'anno precedente, trainato da forti vendite al dettaglio e istituzionali. Le attività in gestione hanno raggiunto 52,2 miliardi di dollari, con un incremento del 13% rispetto al secondo trimestre del 2023. Le prestazioni di F&G sono state supportate da una forte domanda per i suoi prodotti, dalla performance degli investimenti e da una gestione disciplinata delle spese. L’azienda ha restituito 32 milioni di dollari agli azionisti attraverso dividendi e continua a essere sulla buona strada per raggiungere i suoi obiettivi per il Giorno degli Investitori.
F&G Annuities & Life (NYSE: FG) reportó sólidos resultados para el segundo trimestre de 2024, con ganancias netas de 198 millones de dólares (1,55 dólares por acción) y ganancias netas ajustadas de 139 millones de dólares (1,10 dólares por acción). La compañía logró ventas brutas récord de 4,4 mil millones de dólares, un incremento del 47% interanual, impulsado por fuertes ventas al por menor e institucionales. Los activos bajo gestión alcanzaron los 52,2 mil millones de dólares, un aumento del 13% con respecto al segundo trimestre de 2023. El rendimiento de F&G se vio fortalecido por una alta demanda de sus productos, el rendimiento de la inversión y una gestión disciplinada de los gastos. La empresa devolvió 32 millones de dólares a los accionistas a través de dividendos y sigue en camino de cumplir con sus objetivos del Día del Inversor.
F&G 연금 및 생명보험 (NYSE: FG)은 2024년 2분기에 1억 9,800만 달러의 순이익 (주당 1.55달러)와 1억 3,900만 달러의 조정 순이익 (주당 1.10달러)를 기록하며 강력한 실적을 발표했습니다. 회사는 44억 달러의 기록적인 총 매출을 달성했으며, 이는 전년 대비 47% 증가한 수치로, 강력한 소매 및 기관 판매에 힘입은 것입니다. 운용 자산은 522억 달러에 도달했으며, 이는 2023년 2분기 대비 13% 증가한 수치입니다. F&G의 성과는 자사 제품에 대한 강한 수요, 투자 성과 및 규율 있는 비용 관리에 의해 강화되었습니다. 회사는 배당금을 통해 주주에게 3,200만 달러를 환원했으며, 투자자 행사 목표를 달성하기 위해 순항하고 있습니다.
F&G Annuities & Life (NYSE: FG) a signalé de solides résultats pour le deuxième trimestre de 2024, avec un bénéfice net de 198 millions de dollars (1,55 dollar par action) et un bénéfice net ajusté de 139 millions de dollars (1,10 dollar par action). L'entreprise a réalisé des ventes brutes record de 4,4 milliards de dollars, soit une augmentation de 47 % par rapport à l'année précédente, soutenue par de fortes ventes au détail et institutionnelles. Les actifs sous gestion ont atteint 52,2 milliards de dollars, en hausse de 13 % par rapport au deuxième trimestre de 2023. Les performances de F&G ont été renforcées par une forte demande pour ses produits, la performance des investissements et une gestion disciplinée des dépenses. L'entreprise a retourné 32 millions de dollars aux actionnaires par le biais de dividendes et reste sur la bonne voie pour atteindre ses objectifs pour le Jour des Investisseurs.
F&G Annuities & Life (NYSE: FG) berichtete über starke Ergebnisse im 2. Quartal 2024, mit netto Gewinn von 198 Millionen Dollar (1,55 Dollar pro Aktie) und bereinigtem Netto Gewinn von 139 Millionen Dollar (1,10 Dollar pro Aktie). Das Unternehmen erzielte Rekordbruttoumsätze von 4,4 Milliarden Dollar, was einem Anstieg von 47 % im Jahresvergleich entspricht, angetrieben durch starke Einzel- und Institutionenverkäufe. Das verwaltete Vermögen erreichte 52,2 Milliarden Dollar, was einem Anstieg von 13 % gegenüber dem 2. Quartal 2023 entspricht. F&Gs Leistung wurde durch eine starke Nachfrage nach seinen Produkten, Investmenterfolge und diszipliniertes Kostenmanagement gestärkt. Das Unternehmen gab 32 Millionen Dollar über Dividenden an die Aktionäre zurück und bleibt auf Kurs, um seine Zielvorgaben für den Investorentag zu erreichen.
- Record gross sales of $4.4 billion, up 47% year-over-year
- Net earnings increased to $198 million from $130 million in Q2 2023
- Adjusted net earnings rose to $139 million from $79 million in Q2 2023
- Assets under management grew 13% to $52.2 billion
- Adjusted return on assets expanded to 130 basis points
- Strong demand for products across retail and institutional channels
- Debt to capitalization ratio increased to 26.4%, above long-term target of 25%
- $16 million net expense from actuarial model updates and refinements
Insights
F&G Annuities & Life's Q2 2024 results show strong growth and profitability. Key highlights include:
- Record gross sales of
$4.4 billion , up47% year-over-year - Net earnings of
$198 million , or$1.55 per share, up from$130 million in Q2 2023 - Adjusted net earnings of
$139 million , or$1.10 per share, compared to$79 million in Q2 2023 - Record AUM of
$52.2 billion , up13% year-over-year
The company's multi-channel strategy and strong investment performance are driving growth. However, investors should note the impact of mark-to-market effects and other items on net earnings. The solid balance sheet and capital return to shareholders are positive signs for long-term stability.
F&G's Q2 results demonstrate robust performance in the annuity and life insurance sectors. The
The company's success in the institutional market, with sales of
However, investors should monitor the impact of interest rate changes on F&G's investment portfolio and product pricing, as these factors can significantly affect profitability in the insurance industry.
F&G's Q2 performance reflects favorable market conditions and effective strategy execution. The
The increase in AUM to
Investors should note the company's progress towards its Investor Day targets, which suggests strong execution of its strategic plan. However, it's important to monitor broader economic factors, such as inflation and interest rates, which could impact consumer demand for insurance products in the coming quarters.
Net earnings attributable to common shareholders (net earnings) for the second quarter of
Adjusted net earnings attributable to common shareholders (adjusted net earnings) for the second quarter of
Company Highlights
- Record and sustainable sales growth across multi-channel platform: Gross sales of
$4.4 billion 47% over the second quarter 2023 driven by record retail channel sales and robust institutional market sales - Record invested assets with strong investment returns: Record assets under management (AUM) were
$52.2 billion 13% from$46.0 billion $61.4 billion - Strong and expanding adjusted return on assets, excluding significant items: Remains above baseline of 110 basis points shared at our Investor Day in October 2023
- Solid balance sheet supports both organic growth and return of capital to shareholders: F&G returned
$32 million
Chris Blunt, Chief Executive Officer, commented, "We delivered record assets under management before flow reinsurance in the second quarter of
Summary Financial Results1 | ||||||
(In millions, except per share data) | Three Months Ended | Six Months Ended | ||||
June 30, 2024 | June 30, 2023 | 2024 | 2023 | |||
Total gross sales | $ 4,420 | $ 3,008 | $ 7,915 | $ 6,289 | ||
Net sales | $ 3,445 | $ 2,212 | $ 5,747 | $ 4,421 | ||
Assets under management (AUM) | $ 52,208 | $ 46,004 | $ 52,208 | $ 46,004 | ||
Average assets under management (AAUM) YTD | $ 50,181 | $ 44,817 | $ 50,181 | $ 44,817 | ||
Adjusted return on assets | 0.98 % | 0.62 % | 0.98 % | 0.62 % | ||
Net earnings (loss) | $ 198 | $ 130 | $ 309 | $ (65) | ||
Net earnings (loss) per share | $ 1.55 | $ 1.04 | $ 2.45 | $ (0.52) | ||
Adjusted net earnings | $ 139 | $ 79 | $ 247 | $ 140 | ||
Adjusted net earnings per share | $ 1.10 | $ 0.63 | $ 1.97 | $ 1.12 | ||
Book value per common share | $ 27.02 | $ 19.98 | $ 27.02 | $ 19.98 | ||
Book value per common share, excluding AOCI | $ 42.52 | $ 40.70 | $ 42.52 | $ 40.70 | ||
______________________ |
1 See definition of non-GAAP measures below |
Second Quarter 2024 Results
Record profitable gross sales: Gross sales of
Record Retail channel sales of
Robust Institutional market sales of
Net sales of
Record assets under management (AUM) were
Adjusted net earnings were
- Adjusted net earnings of
$139 million $1.10 $145 million $1.11 $4 million $0.03 $16 million $0.12 10% was$165 million $1.26 - Adjusted net earnings of
$79 million $0.63 $82 million $0.66 $5 million $0.04 10% was$137 million $1.10
As compared to the prior year, the adjusted net earnings increase reflects asset growth, margin diversification from accretive flow reinsurance fees and owned distribution margin, disciplined expense management and higher interest expense due to planned capital market activity.
Capital and Liquidity Highlights
Total F&G equity attributable to common shareholders excluding AOCI was
Book value per common share excluding AOCI as of March 31, 2024 | $ | 41.10 |
Adjusted net earnings and other | 1.01 | |
Book value per common share excluding AOCI, before capital actions & mark-to-market | $ | 42.11 |
Capital actions | (0.15) | |
Book value per common share excluding AOCI, before mark-to-market | $ | 41.96 |
Mark-to-market movement | 0.56 | |
Book value per common share excluding AOCI as of June 30, 2024 | $ | 42.52 |
Our consolidated debt outstanding increased to
During the second quarter, F&G returned
Conference Call
We will host a call with investors and analysts to discuss F&G's second quarter 2024 results on Tuesday, August 6, 2024, beginning at 9:00 a.m. Eastern Time. A live webcast of the conference call will be available on the F&G Investor Relations website at fglife.com. The conference call replay will be available via webcast through the F&G Investor Relations website at fglife.com. The telephone replay will be available from 1:00 p.m. Eastern Time on August 6, 2024, through August 13, 2024, by dialing 1-844-512-2921 (
About F&G
F&G is committed to helping Americans turn their aspirations into reality. F&G is a leading provider of insurance solutions serving retail annuity and life customers and institutional clients and is headquartered in
Use of Non-GAAP Financial Information
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 presentation 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.
Forward-Looking Statements and Risk Factors
This press release contains forward-looking statements that are subject to known and unknown risks and uncertainties, many of which are beyond our control. Some of the forward-looking statements can be identified by the use of terms such as "believes", "expects", "may", "will", "could", "seeks", "intends", "plans", "estimates", "anticipates" or other comparable terms. Statements that are not historical facts, including statements regarding our expectations, hopes, intentions or strategies regarding the future are forward-looking statements. Forward-looking statements are based on management's beliefs, as well as assumptions made by, and information currently available to, management. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to: general economic conditions and other factors, including prevailing interest and unemployment rate levels and stock and credit market performance; natural disasters, public health crises, international tensions and conflicts, geopolitical events, terrorist acts, labor strikes, political crisis, accidents and other events; concentration in certain states for distribution of our products; the impact of interest rate fluctuations; equity market volatility or disruption; the impact of credit risk of our counterparties; changes in our assumptions and estimates regarding amortization of our deferred acquisition costs, deferred sales inducements and value of business acquired balances; regulatory changes or actions, including those relating to regulation of financial services affecting (among other things) underwriting of insurance products and regulation of the sale, underwriting and pricing of products and minimum capitalization and statutory reserve requirements for insurance companies, or the ability of our insurance subsidiaries to make cash distributions to us; and other factors discussed in "Risk Factors" and other sections of F&G's Form 10-K and other filings with the Securities and Exchange Commission (SEC).
CONTACT:
Lisa Foxworthy-Parker
SVP of Investor & External Relations
Investor.relations@fglife.com
515.330.3307
F&G ANNUITIES & LIFE, INC. CONSOLIDATED BALANCE SHEETS (In millions, except per share data) (Unaudited) | ||||
June 30, 2024 | December 31, 2023 | |||
Assets | ||||
Investments | ||||
Fixed maturity securities available for sale, at fair value, (amortized cost of | $ 43,826 | $ 40,419 | ||
Preferred securities, at fair value | 332 | 469 | ||
Equity securities, at fair value | 147 | 137 | ||
Derivative investments | 1,032 | 797 | ||
Mortgage loans, net of allowance for credit losses of | 5,439 | 5,336 | ||
Investments in unconsolidated affiliates (certain investments at fair value of | 3,705 | 3,071 | ||
Other long-term investments | 660 | 608 | ||
Short-term investments | 421 | 1,452 | ||
Total investments | $ 55,562 | $ 52,289 | ||
Cash and cash equivalents | 3,526 | 1,563 | ||
Reinsurance recoverable, net of allowance for credit losses of | 11,031 | 8,960 | ||
Goodwill | 2,017 | 1,749 | ||
Prepaid expenses and other assets | 983 | 931 | ||
Other intangible assets, net | 4,952 | 4,207 | ||
Market risk benefits asset | 103 | 88 | ||
Income taxes receivable | 11 | 27 | ||
Deferred tax asset, net | 327 | 388 | ||
Total assets | $ 78,512 | $ 70,202 | ||
Liabilities and Equity | ||||
Contractholder funds | $ 53,602 | $ 48,798 | ||
Future policy benefits | 7,636 | 7,050 | ||
Market risk benefits liability | 459 | 403 | ||
Accounts payable and accrued liabilities | 2,328 | 2,011 | ||
Notes payable | 2,038 | 1,754 | ||
Funds withheld for reinsurance liabilities | 8,661 | 7,083 | ||
Total liabilities | $ 74,724 | $ 67,099 | ||
Equity | ||||
Preferred stock | — | — | ||
Common stock | — | — | ||
Additional paid-in-capital | 3,449 | 3,185 | ||
Retained earnings | 2,182 | 1,926 | ||
Accumulated other comprehensive income (loss) ("AOCI") | (1,953) | (1,990) | ||
Treasury stock, at cost (1,028,827 shares as of June 30, 2024) | (24) | (18) | ||
Total F&G Annuities & Life, Inc. shareholders' equity | $ 3,654 | $ 3,103 | ||
Noncontrolling interests | 134 | — | ||
Total equity | $ 3,788 | $ 3,103 | ||
Total liabilities and equity | $ 78,512 | $ 70,202 | ||
F&G ANNUITIES & LIFE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS SECOND QUARTER INFORMATION (In millions, except per share data) (Unaudited) | |||||||||
Three months ended | Six months ended | ||||||||
June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||
Revenues | |||||||||
Life insurance premiums and other fees | $ 487 | $ 576 | $ 1,205 | $ 941 | |||||
Interest and investment income | 684 | 525 | 1,300 | 1,044 | |||||
Owned distribution revenues | 18 | — | 41 | — | |||||
Recognized gains and (losses), net | (17) | 67 | 195 | 52 | |||||
Total revenues | 1,172 | 1,168 | 2,741 | 2,037 | |||||
Benefits and expenses | |||||||||
Benefits and other changes in policy reserves | 608 | 817 | 1,769 | 1,629 | |||||
Market risk benefit (gains) losses | 20 | (30) | 9 | 29 | |||||
Depreciation and amortization | 147 | 104 | 270 | 194 | |||||
Personnel costs | 69 | 56 | 135 | 109 | |||||
Other operating expenses | 46 | 33 | 104 | 69 | |||||
Interest expense | 28 | 25 | 58 | 47 | |||||
Total benefits and expenses | 918 | 1,005 | 2,345 | 2,077 | |||||
Earnings (loss) before income taxes | 254 | 163 | 396 | (40) | |||||
Income tax expense (benefit) | 50 | 33 | 76 | 25 | |||||
Net earnings (loss) | 204 | 130 | 320 | (65) | |||||
Less: Noncontrolling interests | 1 | — | 2 | — | |||||
Net earnings (loss) attributable to F&G | 203 | 130 | 318 | (65) | |||||
Less: Preferred stock dividend | 5 | — | 9 | — | |||||
Net earnings (loss) attributable to F&G common shareholders | $ 198 | $ 130 | $ 309 | $ (65) | |||||
Net earnings (loss) attributable to F&G common shareholders per common share | |||||||||
Basic | $ 1.60 | $ 1.04 | $ 2.49 | $ (0.52) | |||||
Diluted | $ 1.55 | $ 1.04 | $ 2.45 | $ (0.52) | |||||
Weighted average common shares used in computing net earnings (loss) per common share | |||||||||
Basic | 124 | 125 | 124 | 125 | |||||
Diluted | 131 | 125 | 130 | 125 | |||||
Non-GAAP Measures and Other Information
RECONCILIATION OF NET EARNINGS (LOSS) AND ADJUSTED NET EARNINGS (LOSS) | |||||||||
Three months ended | Six months ended | ||||||||
June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||
Reconciliation of net earnings (loss) to adjusted net earnings attributable to common shareholders ¹ | |||||||||
Net earnings (loss) attributable to common shareholders | $ 198 | $ 130 | $ 309 | $ (65) | |||||
Non-GAAP adjustments | |||||||||
Recognized (gains) and losses, net | |||||||||
Net realized and unrealized (gains) losses on fixed maturity available-for-sale securities, equity securities | (37) | 27 | (85) | 75 | |||||
Change in allowance for expected credit losses | 21 | 20 | 22 | 28 | |||||
Change in fair value of reinsurance related embedded derivatives | (10) | (17) | 8 | 2 | |||||
Change in fair value of other derivatives and embedded derivatives | 8 | — | 69 | (1) | |||||
Recognized (gains) losses, net | (18) | 30 | 14 | 104 | |||||
Market related liability adjustments | (71) | (102) | (126) | 142 | |||||
Purchase price amortization | 19 | 6 | 41 | 11 | |||||
Transaction costs and other non-recurring items | (3) | — | (3) | 2 | |||||
Noncontrolling interest | (2) | — | (5) | — | |||||
Income taxes adjustment | 16 | 15 | 17 | (54) | |||||
Adjusted net earnings attributable to common shareholders ¹ | $ 139 | $ 79 | $ 247 | $ 140 | |||||
1See definition of non-GAAP measures below |
- Adjusted net earnings of
$139 million $1.10 $145 million $1.11 $4 million $0.03 $16 million $0.12 10% was$165 million $1.26 - Adjusted net earnings of
$79 million $0.63 $82 million $0.66 $5 million $0.04 10% was$137 million $1.10 - Adjusted net earnings of
$247 $1.97 $245 million $1.88 $10 million $0.08 $16 million $0.12 10% was$317 million $2.44 - Adjusted net earnings of
$140 million $1.12 $181 million $1.45 $5 million $0.04 $37 million $0.30 10% was$269 million $2.15
RECONCILIATION OF TOTAL EQUITY, TOTAL EQUITY EXCLUDING ACCUMULATED OTHER COMPREHENSIVE INCOME (AOCI), BOOK VALUE PER SHARE AND BOOK VALUE PER SHARE EXCLUDING AOCI | ||||||
Three months ended | ||||||
(In millions) | June 30, 2024 | March 31, 2024 | December 31, 2023 | |||
Total F&G Annuities & Life, Inc. shareholders' equity | 3,654 | 3,546 | 3,103 | |||
Less: Preferred stock | 250 | 250 | — | |||
Total F&G equity attributable to common shareholders | 3,404 | 3,296 | 3,103 | |||
Less: AOCI | (1,953) | (1,883) | (1,990) | |||
Total F&G equity attributable to common shareholders, excluding AOCI | $ 5,357 | $ 5,179 | $ 5,093 | |||
Common shares outstanding | 126 | 126 | 126 | |||
Book value per common share | $ 27.02 | $ 26.16 | $ 24.63 | |||
Book value per common share, excluding AOCI | $ 42.52 | $ 41.10 | $ 40.42 | |||
ASSETS UNDER MANAGEMENT (AUM) ROLLFORWARD, AVERAGE ASSETS UNDER MANAGEMENT (AAUM) AND AUM BEFORE FLOW REINSURANCE | ||||||
Three months ended | ||||||
(In millions) | June 30, 2024 | March 31, 2024 | December 31, 2023 | |||
AUM at beginning of period | $ 49,787 | $ 49,103 | $ 47,103 | |||
Net new business asset flows | 3,057 | 2,116 | 3,165 | |||
Net flow reinsurance to third parties | (930) | (1,407) | (1,352) | |||
Net capital transaction proceeds (disbursements) | 294 | (25) | 187 | |||
AUM at end of period¹ | $ 52,208 | $ 49,787 | $ 49,103 | |||
AAUM YTD¹ | $ 50,181 | $ 49,400 | $ 46,044 | |||
AUM before flow reinsurance | $ 61,370 | $ 58,020 | $ 55,928 | |||
SALES HIGHLIGHTS | |||||||||
Three months ended | Six months ended | ||||||||
(In millions) | June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||
Total annuity sales | 3,123 | 2,288 | 5,887 | 5,012 | |||||
Indexed universal life ("IUL") | 44 | 42 | 86 | 79 | |||||
Funding agreements ("FABN/FHLB") | 915 | 200 | 1,020 | 456 | |||||
Pension risk transfer ("PRT") | 338 | 478 | 922 | 742 | |||||
Gross sales(1) | 4,420 | 3,008 | 7,915 | 6,289 | |||||
Sales attributable to flow reinsurance to third parties | (975) | (796) | (2,168) | (1,868) | |||||
Net sales(1) | $ 3,445 | $ 2,212 | $ 5,747 | $ 4,421 | |||||
1See definition of non-GAAP measures below |
DEFINITIONS
The following represents the definitions of non-GAAP measures used by F&G:
Adjusted Net Earnings attributable to common shareholders
Adjusted net earnings attributable to common shareholders is a non-GAAP economic measure we use to evaluate financial performance each period. Adjusted net earnings attributable to common shareholders is calculated by adjusting net earnings (loss) 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; and the effects of changes in fair value of the reinsurance related embedded derivative and other derivatives, including interest rate swaps and forwards;
(ii) Market related liability adjustments: 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; the impact of initial pension risk transfer deferred profit liability losses, including amortization from previously deferred pension risk transfer deferred profit liability losses; and the changes in the fair value of market risk benefits by deferring current period changes and amortizing that amount over the life of the market risk benefit;
(iii) Purchase price amortization: the impacts related to the amortization of certain intangibles (internally developed software, trademarks and value of distribution asset and the change in fair value of liabilities recognized as a result of acquisition activities);
(iv) Transaction costs: the impacts related to acquisition, integration and merger related items;
(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;
(vi) Non-controlling interest on non-GAAP adjustments: the portion of the non-GAAP adjustments attributable to the equity interest of entities that F&G does not wholly own; and
(vii) Income taxes: the income tax impact related to the above-mentioned 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.
Adjusted Weighted Average Diluted Shares Outstanding
Adjusted weighted average diluted shares outstanding is the same as weighted average diluted shares outstanding except for periods in which our preferred stocks are calculated to be dilutive to either net earnings attributable to common shareholders or adjusted net earnings attributable to common shareholders, but not both, or there is a net earnings loss attributable to common shareholders on a GAAP basis, but positive adjusted net earnings attributable to common shareholders using the non-GAAP measure. The above exceptions are made to include relevant diluted shares when dilution occurs and exclude relevant diluted shares when dilution does not occur for adjusted net earnings attributable to common shareholders.
Management considers this non-GAAP financial measure to be useful internally and for investors and analysts to assess the level of return driven by the Company that is available to common shareholders.
Adjusted Net Earnings attributable to common shareholders per Diluted Share
Adjusted net earnings attributable to common shareholders per diluted share is calculated as adjusted net earnings plus preferred stock dividend (if the preferred stock has created dilution). This sum is then divided by the adjusted weighted-average diluted shares outstanding.
Management considers this non-GAAP financial measure to be useful internally and for investors and analysts to assess the level of return driven by the Company that is available to common shareholders.
Adjusted Return on Assets attributable to Common Shareholders
Adjusted return on assets attributable to common shareholders is calculated by dividing year-to-date annualized adjusted net earnings attributable to common shareholders by year-to-date AAUM. Return on assets is comprised of net investment income, less cost of funds, flow reinsurance fee income, owned distribution margin and less expenses (including operating expenses, interest expense and income taxes) consistent with our adjusted net earnings definition and related adjustments. Cost of funds includes liability costs related to cost of crediting as well as other liability costs. 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.
Adjusted Return on Average Common Shareholder Equity, excluding AOCI
Adjusted return on average common shareholder equity is calculated by dividing the rolling four quarters adjusted net earnings attributable to common shareholders, by total average F&G equity attributable to common shareholders, excluding AOCI. Average equity attributable to common shareholders, excluding AOCI for the twelve month rolling period is the average of 5 points throughout the period. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments, changes in instrument-specific credit risk for market risk benefits and discount rate assumption changes for the future policy benefits, management considers this non-GAAP financial measure to be a useful internally and for investors and analysts to assess the level return driven by the Company's adjusted earnings.
Assets Under Management (AUM)
AUM is comprised of the following components and is reported net of reinsurance assets ceded in accordance with GAAP:
(i) total invested assets at amortized cost, excluding investments in unconsolidated affiliates, owned distribution and derivatives;
(ii) investments in unconsolidated affiliates at carrying value;
(iii) related party loans and investments;
(iv) accrued investment income;
(v) the net payable/receivable for the purchase/sale of investments; and
(vi) cash and cash equivalents excluding derivative collateral at the end of the period.
Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the size of our investment portfolio that is retained.
AUM before Flow Reinsurance
AUM before Flow Reinsurance is comprised of components consistent with AUM, but also includes flow reinsured assets.
Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the size of our investment portfolio including reinsured assets.
Average Assets Under Management (AAUM) (Quarterly and YTD)
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 retained assets.
Book Value per Common Share, excluding AOCI
Book value per Common share, excluding AOCI is calculated as total F&G equity attributable to common shareholders divided by the total number of shares of common stock outstanding. Management considers this to be a useful measure internally and for investors and analysts to assess the capital position of the Company.
Debt-to-Capitalization Ratio, excluding AOCI
Debt-to-capitalization ratio is computed by dividing total aggregate principal amount of debt by total capitalization (total debt plus total equity, excluding AOCI). Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing its capital position.
Return on Average F&G common shareholder Equity, excluding AOCI
Return on average F&G common shareholder equity, excluding AOCI is calculated by dividing the rolling four quarters net earnings (loss) attributable to common shareholders, by total average F&G equity attributable to common shareholders, excluding AOCI. Average F&G equity attributable to common shareholders, excluding AOCI for the twelve month rolling period is the average of 5 points throughout the period. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments, changes in instrument-specific credit risk for market risk benefits and discount rate assumption changes for the future policy benefits, management considers this non-GAAP financial measure to be useful internally and for investors and analysts to assess the level of return driven by the Company that is available to common shareholders.
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.
Total Capitalization, excluding AOCI
Total capitalization, excluding AOCI is based on total equity excluding the effect of AOCI and the total aggregate principal amount of debt. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments, changes in instrument-specific credit risk for market risk benefits and discount rate assumption changes for the future policy benefits, management considers this non-GAAP financial measure to provide useful supplemental information internally and to investors and analysts to help assess the capital position of the Company.
Total Equity, excluding AOCI
Total equity, excluding AOCI is based on total 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, changes in instrument-specific credit risk for market risk benefits and discount rate assumption changes for the future policy benefits, 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 equity.
Total F&G Equity attributable to common shareholders, excluding AOCI
Total F&G equity attributable to common shareholder, excluding AOCI is based on total F&G Annuities & Life, Inc. shareholders' equity excluding the effect of AOCI and preferred stocks, including additional paid-in-capital. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments, changes in instrument-specific credit risk for market risk benefits and discount rate assumption changes for the future policy benefits, management considers this non-GAAP financial measure to be useful internally and for investors and analysts to assess the level of return driven by the Company that is available to common shareholders.
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SOURCE F&G Annuities & Life, Inc.
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