F&G Annuities & Life Reports Fourth Quarter and Full Year 2025 Results
Rhea-AI Summary
F&G Annuities & Life (NYSE: FG) reported Q4 and full-year 2025 results: record AUM before flow reinsurance $73.1B (up 12% YoY) and retained AUM $57.6B (up 7% YoY). Full-year gross sales were $14.6B. Net earnings fell to $248M for 2025 versus $622M in 2024; adjusted net earnings were $482M.
Capital actions included $137M returned to shareholders, an estimated statutory RBC ratio ~430%, and a planned sale of Bermuda legal entity closing March 1, 2026 (remaining inforce block ~$1.9B).
AI-generated analysis. Not financial advice.
Positive
- AUM before flow reinsurance rose to $73.1B (+12% YoY)
- Full-year gross sales of $14.6B, near record levels
- Estimated statutory RBC ratio ~430%, above 400% target
- Returned $137M to shareholders in 2025
Negative
- Full-year net earnings declined to $248M from $622M in 2024
- Adjusted net earnings fell to $482M (FY2025) from $546M (FY2024)
- Investment income from alternative investments was $278M below long-term expectation for 2025
News Market Reaction – FG
On the day this news was published, FG declined 7.95%, reflecting a notable negative market reaction. Argus tracked a trough of -7.8% from its starting point during tracking. Our momentum scanner triggered 23 alerts that day, indicating elevated trading interest and price volatility. This price movement removed approximately $308M from the company's valuation, bringing the market cap to $3.57B at that time.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
FG fell 3.05% while key life-insurance peers were mixed to slightly positive (e.g., JXN +1.5%, LNC +1.11%, CNO +0.19%). The move appears stock-specific, not sector-driven.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Nov 06 | Q3 2025 earnings | Positive | +3.1% | Return to net profit, strong AUM and sales growth with new reinsurance sidecar. |
| Aug 06 | FNF Q2 2025 earnings | Neutral | +2.9% | Mixed title earnings, higher revenue; F&G segment AUM and sales growth within FNF. |
| Aug 06 | Q2 2025 earnings | Neutral | +2.9% | Lower net and adjusted earnings but record AUM and strong retail sales growth. |
| May 07 | FNF Q1 2025 earnings | Neutral | -14.5% | Lower GAAP earnings, higher adjusted earnings; F&G AUM growth within FNF results. |
| May 07 | Q1 2025 earnings | Negative | -14.5% | Net loss and lower adjusted earnings despite record AUM and equity offering. |
Earnings releases for FG have typically coincided with positive single-day moves, even when results were mixed, suggesting the market often rewards AUM growth and capital strength.
Recent earnings reports for F&G show consistent growth in assets under management, from $67.4B in Q1 2025 to $71.4B in Q3 2025, and now $73.1B before flow reinsurance. Prior quarters mixed net income trends, including a Q1 2025 net loss, still saw investors react favorably when adjusted earnings and capital metrics held up. Today’s Q4 and full-year 2025 update continues that theme of record AUM alongside lower net and adjusted earnings versus 2024.
Historical Comparison
Past 12 months of earnings-related news saw an average move of -4%. Today’s -3.05% reaction to Q4/FY 2025 results is broadly in line with that pattern.
Earnings updates show a steady build in F&G’s AUM, from $67.4B in Q1 2025 to $69.2B, $71.4B, and now a record $73.1B before flow reinsurance, alongside evolving capital and reinsurance structures.
Market Pulse Summary
The stock moved -8.0% in the session following this news. A negative reaction despite record AUM of $73.1B would fit a pattern where earnings releases have averaged a -4% move. The report showed lower net and adjusted earnings per share versus 2024, even as capital remained strong with an estimated 430% RBC ratio. Investors weighing solvency and growth against earnings pressure could reassess if AUM growth and expense discipline offset profitability headwinds.
Key Terms
assets under management financial
flow reinsurance financial
risk-based capital (RBC) ratio regulatory
AOCI financial
non-GAAP financial
mark-to-market financial
statutory regulatory
AI-generated analysis. Not financial advice.
Net earnings attributable to common shareholders for the fourth quarter were
Adjusted net earnings attributable to common shareholders (adjusted net earnings) for the fourth quarter were
Company Highlights
- Generated record assets under management: F&G achieved record assets under management before flow reinsurance of
$73.1 billion 12% over year-end 2024. This included retained AUM of$57.6 billion $14.6 billion $3.4 billion - Excellent credit performance in the investment portfolio: The investment portfolio is performing well, with
97% of fixed maturities being investment grade. It is well matched to our liability profile and diversified across asset types. Credit-related impairments have remained low and stable, averaging 6 basis points over the past five years and significantly below pricing assumptions - Reported adjusted return on assets (ROA) and adjusted return on equity (ROE) ex AOCI include short-term fluctuations in investment income from alternative investments: Adjusted ROA was 87 basis points for the fourth quarter, in line with the sequential quarter, and reflects asset growth, growing fees from accretive flow reinsurance, steady owned distribution margin, and operating expense discipline driving scale benefit; adjusted ROE excluding AOCI was
8.2% for the fourth quarter - Continued progress toward our Investor Day targets: We have made strong progress toward the medium-term targets set out at our 2023 Investor Day
- Continued focus on organic growth and return of capital to shareholders: F&G returned
$137 million $38 million - Strong solvency position and announcement of the strategic sale of our
Bermuda subsidiary: Estimated risk-based capital (RBC) ratio for our primary operating subsidiary of approximately430% as of December 31, 2025, above our400% target; reflects partial recapture of inforce block and dividend of assets from ourBermuda legal entity, F&G Life Re Ltd, at year-end; we are on track to close a transaction in the first quarter of 2026 to sell thisBermuda legal entity, including the remaining inforce block, as we no longer need aBermuda operation to support our reinsurance strategy - Completed planned distribution of approximately
12% of FNF's ownership of F&G to FNF shareholders: On December 31, 2025, FNF completed the distribution to FNF's shareholders of approximately 16 million shares of F&G common stock owned by FNF. Following the distribution of approximately12% of the outstanding common shares of F&G's common stock to FNF shareholders, FNF retains control of F&G through an approximate70% equity ownership stake
Chris Blunt, F&G's Chief Executive Officer, commented, "We delivered a strong finish to an outstanding year, highlighted by record assets under management before flow reinsurance of
Mr. Blunt continued, "We are executing on our strategy toward a more fee-based, higher margin and less capital intensive business model to drive long-term growth. We took action to improve our operating expense ratio by 10 basis points as compared to year end 2024 and we have strengthened our capital position, augmented by the launch of our reinsurance sidecar. At the end of the year, we expanded our public float to
Summary Financial Results1 | ||||||
(In millions, except per share data) | Three Months Ended | Twelve Months Ended | ||||
December 31, 2025 | December 31, 2024 | 2025 | 2024 | |||
Gross sales | $ 3,392 | $ 3,469 | $ 14,638 | $ 15,262 | ||
Net sales | $ 2,304 | $ 2,438 | $ 10,029 | $ 10,571 | ||
Assets under management (AUM) | $ 57,574 | $ 53,817 | $ 57,574 | $ 53,817 | ||
Average assets under management (AAUM) YTD | $ 55,384 | $ 51,574 | $ 55,384 | $ 51,574 | ||
AUM before flow reinsurance | $ 73,090 | $ 65,274 | $ 73,090 | $ 65,274 | ||
Adjusted return on assets | 0.87 % | 1.06 % | 0.87 % | 1.06 % | ||
Adjusted return on average equity (ex. AOCI) | 8.2 % | 10.3 % | 8.2 % | 10.3 % | ||
Net earnings (loss) | $ 124 | $ 323 | $ 248 | $ 622 | ||
Net earnings (loss) per share | $ 0.92 | $ 2.50 | $ 1.88 | $ 4.88 | ||
Adjusted net earnings | $ 123 | $ 143 | $ 482 | $ 546 | ||
Adjusted net earnings per share | $ 0.91 | $ 1.12 | $ 3.64 | $ 4.30 | ||
Book value per common share | $ 33.49 | $ 29.14 | $ 33.49 | $ 29.14 | ||
Book value per common share, excluding AOCI | $ 44.43 | $ 44.28 | $ 44.43 | $ 44.28 | ||
Fourth Quarter 2025 Results
Record AUM before flow reinsurance was
Gross sales were
Core sales were
Opportunistic sales were
Net sales were
Adjusted net earnings were
- Adjusted net earnings were
$123 million $0.91 $65 million $0.47 10% - Adjusted net earnings of
$143 million $1.12 $7 million $0.05 $32 million $0.25 10%
As compared to the prior year quarter and excluding the above items, adjusted net earnings reflect asset growth, growing fees from accretive flow reinsurance, steady owned distribution margin and disciplined expense management driving scale benefit; partially offset by higher interest expense on debt.
1See definition of non-GAAP measures below |
Full Year 2025 Results
Record AUM before flow reinsurance was
Gross sales were
Core sales were
Opportunistic sales were
Net sales were
Adjusted net earnings for the full year were
- Adjusted net earnings of
$482 million $3.64 $16 million $0.12 $10 million $0.07 $4 million $0.03 $278 million $2.03 10% - Adjusted net earnings of
$546 million $4.30 $30 million $0.23 $14 million $0.11 $6 million $0.05 $145 million $1.11 10%
As compared to the prior year and excluding the above items, adjusted net earnings reflect asset growth, growing fees from accretive flow reinsurance, steady owned distribution margin and disciplined expense management driving scale benefit; partially offset by higher interest expense on debt.
Capital and Liquidity Highlights
Total F&G equity attributable to common shareholders, excluding AOCI, was
4Q25 | FY2025 | ||||
Book value per common share excluding AOCI - Starting Balance1 | $ | 44.07 | $ | 44.28 | |
Common stock offering | — | (0.63) | |||
Subtotal, after effect of common stock offering | $ | 44.07 | $ | 43.65 | |
Adjusted net earnings and other | 0.85 | 3.03 | |||
Subtotal, before capital actions & mark-to-market | $ | 44.92 | $ | 46.68 | |
Capital actions | (0.56) | (1.04) | |||
Subtotal, before mark-to-market | $ | 44.36 | $ | 45.64 | |
Mark-to-market movement | 0.07 | (1.21) | |||
Book value per common share excluding AOCI - As of December 31, 2025 | $ | 44.43 | $ | 44.43 |
1The starting balance for 4Q25 and FY2025 is September 30, 2025 and December 31, 2024, respectively |
F&G has returned capital to shareholders through common and preferred dividends of
The Company continues to have a strong and stable capital position with an estimated statutory company action level risk-based capital (RBC) ratio for our primary operating subsidiary of approximately
F&G maintains strong capitalization and financial flexibility across all of our statutory balance sheets, including our offshore entities, which are conservatively managed to the most stringent capital requirements of our regulators and four rating agencies.
Earnings Conference Call
Members of F&G's senior management team will host a conference call with the investment community to discuss F&G's fourth quarter and full year 2025 results on Friday, February 20, 2026, beginning at 9:00 a.m. Eastern Time. The conference call will be broadcast live over F&G's Investor Relations website at investors.fglife.com. A replay will also be available at the same location.
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 financial 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; consumer spending; government spending; the volatility and strength of the capital markets; investor and consumer confidence; foreign currency exchange rates; commodity prices; inflation levels; changes in trade policy; tariffs and trade sanctions on goods; trade wars; supply chain disruptions; 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) | ||||
Assets | December 31, 2025 | December 31, 2024 | ||
Investments | ||||
Fixed maturity securities available for sale, at fair value, (amortized cost of | $ 52,700 | $ 46,317 | ||
Equity securities, at fair value | 341 | 415 | ||
Derivative investments | 1,148 | 792 | ||
Mortgage loans, net of allowance for credit losses of | 7,891 | 5,926 | ||
Investments in unconsolidated affiliates (certain investments at fair value of | 4,878 | 3,565 | ||
Other long-term investments | 1,294 | 580 | ||
Policy loans | 147 | 104 | ||
Short-term investments | 1,043 | 2,410 | ||
Total investments | $ 69,442 | $ 60,109 | ||
Cash and cash equivalents | 1,486 | 2,264 | ||
Reinsurance recoverable, net of allowance for credit losses of | 17,545 | 13,369 | ||
Goodwill | 2,180 | 2,179 | ||
Prepaid expenses and other assets (certain assets held at fair value of | 1,052 | 950 | ||
Other intangible assets, net | 6,275 | 5,572 | ||
Market risk benefits asset | 285 | 189 | ||
Income taxes receivable | 83 | — | ||
Deferred tax asset, net | 82 | 299 | ||
Total assets | $ 98,430 | $ 84,931 | ||
Liabilities and Equity | ||||
Contractholder funds | $ 62,726 | $ 56,404 | ||
Future policy benefits | 10,755 | 8,749 | ||
Market risk benefits liability | 903 | 549 | ||
Accounts payable and accrued liabilities | 2,701 | 2,219 | ||
Income taxes payable | — | 5 | ||
Notes payable | 2,237 | 2,171 | ||
Funds withheld for reinsurance liabilities | 14,191 | 10,758 | ||
Total liabilities | $ 93,513 | $ 80,855 | ||
Equity | ||||
Preferred stock | — | — | ||
Common stock | — | — | ||
Additional paid-in-capital | 3,764 | 3,464 | ||
Retained earnings | 2,568 | 2,440 | ||
Accumulated other comprehensive income (loss) ("AOCI") | (1,488) | (1,923) | ||
Treasury stock, at cost (1,445,814 shares as of December 31, 2025) | (40) | (30) | ||
Total F&G Annuities & Life, Inc. shareholders' equity | $ 4,804 | $ 3,951 | ||
Non-controlling interests | 113 | 125 | ||
Total equity | $ 4,917 | $ 4,076 | ||
Total liabilities and equity | $ 98,430 | $ 84,931 | ||
F&G ANNUITIES & LIFE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS FOURTH QUARTER INFORMATION (In millions, except per share data) (Unaudited) | |||||||||
Three months ended | Twelve months ended | ||||||||
December 31, | December 31, | December 31, | December 31, | ||||||
Revenues | |||||||||
Life insurance premiums and other fees | $ 987 | $ 1,149 | $ 2,795 | $ 2,860 | |||||
Interest and investment income | 741 | 707 | 2,837 | 2,719 | |||||
Owned distribution revenues | 26 | 20 | 89 | 81 | |||||
Recognized gains and (losses), net | 11 | (317) | 10 | 84 | |||||
Total revenues | 1,765 | 1,559 | 5,731 | 5,744 | |||||
Benefits and expenses | |||||||||
Benefits and other changes in policy reserves | 1,265 | 927 | 3,963 | 3,791 | |||||
Market risk benefit (gains) losses | 19 | (105) | 167 | (25) | |||||
Depreciation and amortization | 174 | 152 | 665 | 569 | |||||
Personnel costs | 70 | 81 | 293 | 296 | |||||
Other operating expenses | 35 | 54 | 156 | 203 | |||||
Interest expense | 41 | 38 | 164 | 132 | |||||
Total benefits and expenses | 1,604 | 1,147 | 5,408 | 4,966 | |||||
Earnings (loss) before income taxes | 161 | 412 | 323 | 778 | |||||
Income tax expense (benefit) | 31 | 85 | 52 | 136 | |||||
Net earnings (loss) | 130 | 327 | 271 | 642 | |||||
Less: Non-controlling interests | 2 | — | 6 | 3 | |||||
Net earnings (loss) attributable to F&G | 128 | 327 | 265 | 639 | |||||
Less: Preferred stock dividend | 4 | 4 | 17 | 17 | |||||
Net earnings (loss) attributable to F&G common | $ 124 | $ 323 | $ 248 | $ 622 | |||||
Net earnings (loss) attributable to F&G common | |||||||||
Basic | $ 0.93 | $ 2.58 | $ 1.89 | $ 4.98 | |||||
Diluted | $ 0.92 | $ 2.50 | $ 1.88 | $ 4.88 | |||||
Weighted average common shares used in computing | |||||||||
Basic | 133 | 125 | 131 | 125 | |||||
Diluted | 139 | 131 | 132 | 131 | |||||
Non-GAAP Measures and Other Information RECONCILIATION OF NET EARNINGS (LOSS) TO ADJUSTED NET EARNINGS (LOSS) | |||||||||
Three months ended | Twelve months ended | ||||||||
December 31, | December 31, | December 31, | December 31, | ||||||
Net earnings (loss) attributable to common shareholders | $ 124 | $ 323 | $ 248 | $ 622 | |||||
Non-GAAP adjustments | |||||||||
Recognized (gains) and losses, net | |||||||||
Net realized and unrealized (gains) losses on fixed maturity | 7 | 24 | 44 | (76) | |||||
Change in allowance for expected credit losses | 14 | — | 54 | 32 | |||||
Change in fair value of reinsurance related embedded derivatives | (23) | (153) | 139 | 33 | |||||
Change in fair value of other derivatives and embedded derivatives | 6 | 96 | (57) | 38 | |||||
Recognized (gains) losses, net | 4 | (33) | 180 | 27 | |||||
Market related liability adjustments | (22) | (233) | 28 | (214) | |||||
Purchase price amortization | 18 | 21 | 80 | 84 | |||||
Transaction costs, other and non-recurring items | 1 | 19 | 16 | 16 | |||||
Non-controlling interest | (3) | (2) | (9) | (10) | |||||
Income taxes adjustment | 1 | 48 | (61) | 21 | |||||
Adjusted net earnings attributable to common shareholders ¹ | $ 123 | $ 143 | $ 482 | $ 546 | |||||
1See definition of non-GAAP measures below |
- Adjusted net earnings were
$123 million $0.91 $65 million $0.47 10% - Adjusted net earnings of
$143 million $1.12 $7 million $0.05 $32 million $0.25 10% - Adjusted net earnings of
$482 million $3.64 $16 million $0.12 $10 million $0.07 $4 million $0.03 $278 million $2.03 10% - Adjusted net earnings of
$546 million $4.30 $30 million $0.23 $14 million $0.11 $6 million $0.05 $145 million $1.11 10%
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) | December 31, | September 30, | June 30, 2025 | March 31, 2025 | ||||
Total F&G Annuities & Life, Inc. shareholders' equity | 4,804 | 4,824 | 4,438 | 4,363 | ||||
Less: Preferred stock | 250 | 250 | 250 | 250 | ||||
Total F&G equity attributable to common shareholders | 4,554 | 4,574 | 4,188 | 4,113 | ||||
Less: AOCI | (1,488) | (1,376) | (1,670) | (1,734) | ||||
Total F&G equity attributable to common shareholders, excluding AOCI | $ 6,042 | $ 5,950 | $ 5,858 | $ 5,847 | ||||
Common shares outstanding | 136 | 135 | 135 | 135 | ||||
Book value per common share | $ 33.49 | $ 33.88 | $ 31.02 | $ 30.47 | ||||
Book value per common share, excluding AOCI | $ 44.43 | $ 44.07 | $ 43.39 | $ 43.31 | ||||
ASSETS UNDER MANAGEMENT (AUM) ROLLFORWARD, AVERAGE ASSETS UNDER MANAGEMENT (AAUM) AND AUM BEFORE FLOW REINSURANCE | ||||||||
Three months ended | ||||||||
(In millions) | December 31, | September 30, | June 30, 2025 | March 31, 2025 | ||||
AUM at beginning of period | $ 56,647 | $ 55,565 | $ 54,546 | $ 53,817 | ||||
Net new business asset flows | 1,660 | 2,269 | 1,763 | 1,790 | ||||
Net flow reinsurance to third parties | (733) | (1,187) | (744) | (1,395) | ||||
Net capital transaction proceeds (disbursements) | — | — | — | 334 | ||||
AUM at end of period¹ | $ 57,574 | $ 56,647 | $ 55,565 | $ 54,546 | ||||
AAUM YTD¹ | $ 55,384 | $ 54,870 | $ 54,521 | $ 53,877 | ||||
AUM before flow reinsurance | $ 73,090 | $ 71,430 | $ 69,161 | $ 67,398 | ||||
SALES HIGHLIGHTS | |||||||||
Three months ended | Twelve months ended | ||||||||
December 31, | December 31, | December 31, | December 31, | ||||||
Indexed annuities ("FIA/RILA") | $ 1,876 | $ 1,797 | $ 6,703 | $ 6,729 | |||||
Indexed universal life ("IUL") | 53 | 41 | 190 | 166 | |||||
Pension risk transfer ("PRT") | 832 | 983 | 2,126 | 2,242 | |||||
Subtotal: Core sales | 2,761 | 2,821 | 9,019 | 9,137 | |||||
Fixed rate annuities ("MYGA") | 356 | 648 | 3,794 | 5,105 | |||||
Funding agreements ("FABN/FHLB") | 275 | — | 1,825 | 1,020 | |||||
Subtotal: Opportunistic sales2 | 631 | 648 | 5,619 | 6,125 | |||||
Gross sales | 3,392 | 3,469 | 14,638 | 15,262 | |||||
Sales attributable to flow reinsurance to third parties3 | (1,088) | (1,031) | (4,609) | (4,691) | |||||
Net sales | 2,304 | 2,438 | 10,029 | 10,571 | |||||
1See definition of non-GAAP measures below |
2Opportunistic sales volumes fluctuate quarter to quarter depending on economics and market opportunity as we prioritize allocating capital to the highest return opportunities |
3Sales attributable to flow reinsurance to third parties includes the reinsurance sidecar |
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 and "non-recurring," "infrequent" or "unusual items": Other adjustments include removing any charges associated with | |||||||
(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 AUM plus flow reinsured assets, including certain block reinsured assets that have the characteristics of 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.