DES
MOINES, Iowa, Feb. 20,
2025 /PRNewswire/ -- F&G Annuities & Life,
Inc. (NYSE: FG) (F&G or the Company) a leading provider of
insurance solutions serving retail annuity and life customers and
institutional clients, today reported financial results for the
fourth quarter and twelve months (full year) ended December 31, 2024.
Net earnings attributable to common shareholders for
the fourth quarter were $323 million,
or $2.50 per diluted share (per
share), compared to a net loss of $299
million, or $2.41 per share,
for the fourth quarter of 2023. Full year net earnings attributable
to common shareholders of $622
million, or $4.88 per share,
compared to a net loss of $58
million, or $0.47 per share,
for the year ended December 31, 2023.
Net earnings or losses attributable to common shareholders include
mark-to-market effects and non-recurring items; all of which are
excluded from adjusted net earnings attributable to common
shareholders.
Adjusted net earnings attributable to common shareholders
(adjusted net earnings) for the fourth quarter were
$143 million, or $1.12 per share, compared to $75 million, or $0.60 per share, for the fourth quarter of 2023.
Full year adjusted net earnings of $546
million, or $4.30 per share,
compared to $335 million, or
$2.68 per share, for the year ended
December 31, 2023.
- F&G's adjusted net earnings per share include alternative
investment returns below our long-term expectations of $0.25 and $1.11 for
the fourth quarter and full year 2024, respectively, as compared to
$0.30 and $1.22 for the fourth quarter and full year 2023,
respectively. In addition, F&G's adjusted net earnings include
significant income items of $0.17 and
$0.26 for the fourth quarter and full
year 2024, respectively, as compared to significant expense items
of $0.15 and $0.41 for the fourth quarter and full year 2023,
respectively
- Please see the "Fourth Quarter 2024 Results", "Full Year 2024
Results" and "Non-GAAP Measures and Other Information" sections for
further explanation
Company Highlights
- Record full year sales growth across multi-channel
platform: Gross sales of $15.3
billion for the full year, a 16% increase over full year
2023, driven by record retail and pension risk transfer sales. This
included $3.5 billion for the fourth
quarter, a 15% decrease from the near record fourth quarter of
2023
- Record assets under management (AUM) with strong investment
returns: F&G achieved record AUM before flow reinsurance of
$65.3 billion at the end of the
fourth quarter, an increase of 17% over the fourth quarter of 2023.
The investment portfolio is performing well, as expected
- Strong and expanding adjusted return on assets (ROA),
excluding significant items: Demonstrated ROA expansion to 127
basis points for full year 2024, as compared to 117 basis points
for full year 2023
- Growing adjusted return on equity (ROE), excluding AOCI and
significant items: Significant ROE excluding AOCI expansion to
over 12% for full year 2024, as compared to 10% for full year
2023
- Solid balance sheet supports both organic growth and return
of capital to shareholders: F&G returned $32 million and $125
million of capital to shareholders from common and preferred
dividends in the fourth quarter and full year 2024,
respectively
- Strong solvency: Estimated risk-based capital (RBC)
ratio for our primary operating subsidiary of over 410% as of
December 31, 2024, above our 400%
target
Chris Blunt, Chief Executive
Officer, commented, "We reported record gross sales of $15.3 billion for the full year 2024, a 16%
increase over 2023. Notably, gross sales have more than tripled
since 2020. During 2024, we achieved record full year retail
channel and pension risk transfer sales due to favorable market
conditions and secular demand for our products that is poised to
persist. Lastly, we continue to execute our capital light,
strategic initiatives through utilizing flow reinsurance and
growing our owned distribution business which, taken together,
offer F&G a higher return earnings stream. We enter 2025 with
strong momentum and I am excited with the opportunities to further
grow AUM before flow reinsurance and adjusted net earnings."
|
Summary Financial
Results1
|
|
|
(In millions, except
per share data)
|
Three Months
Ended
|
Year
Ended
|
|
December 31,
2024
|
|
December 31,
2023
|
2024
|
|
2023
|
|
Total gross
sales
|
$
3,469
|
|
$
4,083
|
$ 15,262
|
|
$ 13,153
|
|
Net sales
|
$
2,438
|
|
$
2,549
|
$ 10,571
|
|
$
9,238
|
|
Assets under management
(AUM)
|
$ 53,817
|
|
$
49,103
|
$ 53,817
|
|
$ 49,103
|
|
Average assets under
management (AAUM) YTD
|
$ 51,574
|
|
$
46,044
|
$ 51,574
|
|
$ 46,044
|
|
AUM before flow
reinsurance
|
$ 65,274
|
|
$
55,928
|
$ 65,274
|
|
$ 55,928
|
|
Adjusted return on
assets
|
1.06 %
|
|
0.73 %
|
1.06 %
|
|
0.73 %
|
|
Net earnings
(loss)
|
$
323
|
|
$
(299)
|
$
622
|
|
$
(58)
|
|
Net earnings (loss) per
share
|
$
2.50
|
|
$
(2.41)
|
$
4.88
|
|
$
(0.47)
|
|
Adjusted net
earnings
|
$
143
|
|
$
75
|
$
546
|
|
$
335
|
|
Adjusted net earnings
per share
|
$
1.12
|
|
$
0.60
|
$
4.30
|
|
$
2.68
|
|
Book value per common
share
|
$
29.14
|
|
$
24.63
|
$
29.14
|
|
$
24.63
|
|
Book value per common
share, excluding AOCI
|
$
44.28
|
|
$
40.42
|
$
44.28
|
|
$
40.42
|
|
|
1See
definition of non-GAAP measures below
|
Fourth Quarter 2024 Results
Profitable gross
sales were $3.5 billion for
the fourth quarter, a decrease of 15% from the near record fourth
quarter of 2023; this reflects our decision to allocate capital to
the highest returning business, specifically indexed annuity sales
and record pension risk transfer sales, resulting in a reduction in
MYGA sales and funding agreements.
Retail channel sales were $2.5 billion for the fourth quarter, a decrease
of 17% from the fourth quarter of 2023; this reflects our decision
to allocate capital to indexed annuity sales given the ongoing
favorable economic conditions and strong demand for retirement
savings products, resulting in a reduction in MYGA sales.
Institutional market sales reflect $1.0 billion of record pension risk transfer
volume for the fourth quarter, compared to $1.1 billion of pension risk transfer and funding
agreements in fourth quarter of 2023. Institutional sales are
opportunistic and volumes vary quarter to quarter.
Net sales were nearly $2.5
billion for the fourth quarter, in line with the fourth
quarter of 2023.
Record AUM before flow reinsurance was $65.3 billion as of December 31, 2024, an increase of 17% over
$55.9 billion as of December 31, 2023. This included record AUM
of $53.8 billion as of December 31, 2024, an increase of 10% over
$49.1 billion as of December 31, 2023. A rollforward of AUM can
be found in the "Non-GAAP Measures and Other Information" section
of this release.
Adjusted net earnings were $143
million, or $1.12 per share,
in the fourth quarter, compared to $75
million, or $0.60 per share
for the fourth quarter of 2023. Adjusted net earnings include
significant income and expense items and alternative investment
portfolio returns from short-term mark-to-market movement that
differ from long-term return expectations.
- Adjusted net earnings of $143
million, or $1.12 per share,
for the fourth quarter of 2024 include $138 million, or $1.05 per share, of investment income from
alternative investments, $15 million,
or $0.12 per share, of CLO
redemptions and bond prepay income and $7
million, or $0.05 per share,
of actuarial model refinements and other items. Alternative
investments investment income based on management's long-term
expected return of approximately 10% was $170 million, or $1.30 per share
- Adjusted net earnings of $75
million, or $0.60 per share,
for the fourth quarter of 2023 included $110 million, or $0.88 per share, of investment income from
alternative investments and $19
million or $0.15 per share of
significant expense items (comprised of $10
million one-time fixed asset impairment charge and
$9 million actuarial industry
assumption updates). Alternative investments investment income
based on management's long-term expected return of approximately
10% was $147 million, or $1.18 per share
As compared to the prior year quarter, adjusted net earnings
reflect 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.
Full Year 2024 Results
Record gross
sales were $15.3 billion for the
full year, an increase of 16% over $13.2
billion for the full year 2023, driven by record retail
channel and robust institutional market sales.
Record profitable Retail channel sales were
$12.0 billion for the full year, an
increase of 20% over $10.0 billion
for the full year 2023, driven by growth across our agent, bank and
broker dealer channels.
Robust Institutional market sales were $3.3 billion for the full year, comprised of a
record $2.3 billion pension risk
transfer and $1.0 billion funding
agreements, compared to $3.2 billion
for the full year 2023, comprised of $2.0
billion pension risk transfer and $1.2 billion funding agreements.
Record net sales retained were $10.6 billion for the full year, compared to
$9.2 billion for full year
2023.
Record AUM before flow reinsurance was $65.3 billion as of December 31, 2024, an increase of 17% over
$55.9 billion as of December 31, 2023. This included record AUM
of $53.8 billion as of December 31, 2024, an increase of 10% over
$49.1 billion as of December 31, 2023. A rollforward of AUM can
be found in the "Non-GAAP Measures and Other Information" section
of this release.
Adjusted net earnings for the full year of $546 million, or $4.30 per share, compared to $335 million, or $2.68 per share for the full year 2023. Adjusted
net earnings include significant income and expense items and
alternative investment portfolio returns from short-term
mark-to-market movement that differ from long-term return
expectations.
- Adjusted net earnings of $546
million, or $4.30 per share,
for the full year 2024 include $514
million, or $3.92 per share,
of investment income from alternative investments, $46 million, or $0.35 per share, of CLO redemptions and bond
prepay income, and $14 million, or
$0.11 per share, tax valuation
allowance, partially offset by $26
million, or $0.20 per share,
of net expense from actuarial assumption and model updates and
other items. Alternative investments investment income based on
management's long-term expected return of approximately 10% was
$659 million, or $5.03 per share
- Adjusted net earnings of $335
million, or $2.68 per share,
for the full year 2023 included $405
million, or $3.24 per share,
of investment income from alternative investments and $51 million, or $0.41 per share, of net significant expense items
(comprised of $37 million tax
valuation allowance, $10 million of
one-time fixed asset impairment charge and $9 million actuarial industry assumption updates,
partially offset by $5 million bond
prepay income). Alternative investments investment income based on
management's long-term expected return of approximately 10% was
$558 million, or $4.46 per share
As compared to the prior year, adjusted net earnings reflect
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 $5.6 billion, or
$44.28 per share, as of December 31, 2024. This reflects an increase of
$3.86 per share, or 10%, during the
full year, as compared to $40.42 per
share as of December 31, 2023,
including the net increase of $2.00
per share, or 5%, during the current quarter as shown below.
|
Book value per
common share excluding AOCI as of September 30, 2024
|
$
|
42.28
|
|
Adjusted net earnings
and other
|
|
0.89
|
|
Book value per
common share excluding AOCI, before capital actions &
mark-to-market
|
$
|
43.17
|
|
Capital
actions
|
|
(0.54)
|
|
Book value per
common share excluding AOCI, before mark-to-market
|
$
|
42.63
|
|
Mark-to-market
movement
|
|
1.65
|
|
Book value per
common share excluding AOCI as of December 31, 2024
|
$
|
44.28
|
F&G has successfully completed the following capital markets
activity in the fourth quarter of 2024 and early first quarter of
2025, as expected.
- In October of 2024, F&G issued $500
million of senior notes with net proceeds used to fully
paydown its $365 million revolver
balance and the remainder to be used for general corporate
purposes
- In January of 2025, F&G issued $375
million of junior subordinated notes with net proceeds to be
used for general corporate purposes, including the repayment of
debt
- In early February of 2025, F&G fully redeemed its
$300 million of outstanding senior
notes due in May of 2025 at a redemption price of par plus accrued
and unpaid interest up to the redemption date
Debt to capitalization ratio, excluding AOCI, is approximately
27.5% on a pro forma basis, reflecting current debt outstanding of
$2.3 billion. We remain committed to
our long-term target of approximately 25% and expect that our
balance sheet will naturally delever as a result of near-term
growth in total equity, excluding AOCI.
F&G has returned capital to shareholders from common and
preferred dividends of $32 million
and $125 million for the fourth
quarter and full year 2024, respectively, as compared to
$26 million and $101 million for the fourth quarter and full year
2023, respectively.
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 over 410% as of December 31, 2024,
above our 400% target. 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 2024
results on Friday, February 21, 2025,
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
Des Moines, Iowa. For more
information, please visit fglife.com.
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)
|
|
|
|
|
|
|
Assets
|
|
December 31,
2024
|
|
December 31,
2023
|
|
Investments
|
|
|
|
|
|
Fixed maturity
securities available for sale, at fair value, (amortized cost of
$49,729), net
of allowance for credit losses of $62 at December 31,
2024
|
|
$
46,317
|
|
$
40,419
|
|
Preferred securities,
at fair value
|
|
270
|
|
469
|
|
Equity securities, at
fair value
|
|
145
|
|
137
|
|
Derivative
investments
|
|
792
|
|
797
|
|
Mortgage loans, net of
allowance for credit losses of $70 at December 31, 2024
|
|
5,926
|
|
5,336
|
|
Investments in
unconsolidated affiliates (certain investments at fair value of
$272 at
December 31, 2024)
|
|
3,565
|
|
3,071
|
|
Other long-term
investments
|
|
580
|
|
537
|
|
Short-term
investments
|
|
2,410
|
|
1,452
|
|
Total
investments
|
|
$
60,109
|
|
$
52,289
|
|
Cash and cash
equivalents
|
|
2,264
|
|
1,563
|
|
Reinsurance
recoverable, net of allowance for credit losses of $20 at December
31, 2024
|
|
13,369
|
|
8,960
|
|
Goodwill
|
|
2,179
|
|
1,749
|
|
Prepaid expenses and
other assets (certain assets held at fair value of $11 million
at
December 31, 2024)
|
|
1,059
|
|
931
|
|
Other intangible
assets, net
|
|
5,572
|
|
4,207
|
|
Market risk benefits
asset
|
|
189
|
|
88
|
|
Income taxes
receivable
|
|
—
|
|
27
|
|
Deferred tax asset,
net
|
|
299
|
|
388
|
|
Total
assets
|
|
$
85,040
|
|
$
70,202
|
|
Liabilities and
Equity
|
|
|
|
|
|
Contractholder
funds
|
|
$
56,404
|
|
$
48,798
|
|
Future policy
benefits
|
|
8,749
|
|
7,050
|
|
Market risk benefits
liability
|
|
549
|
|
403
|
|
Accounts payable and
accrued liabilities
|
|
2,219
|
|
2,011
|
|
Notes
payable
|
|
2,171
|
|
1,754
|
|
Funds withheld for
reinsurance liabilities
|
|
10,867
|
|
7,083
|
|
Total
liabilities
|
|
$
80,964
|
|
$
67,099
|
|
Equity
|
|
|
|
|
|
Preferred stock $0.001
par value; authorized 25,000,000 shares as of December 31,
2024;
outstanding and issued shares of 5,000,000 as of December 31,
2024
|
|
—
|
|
—
|
|
Common stock $0.001
par value; authorized 500,000,000 shares as of
December 31,
2024; outstanding and issued shares of 126,792,844 and 127,952,143
as of December 31,
2024, respectively
|
|
—
|
|
—
|
|
Additional
paid-in-capital
|
|
3,464
|
|
3,185
|
|
Retained
earnings
|
|
2,440
|
|
1,926
|
|
Accumulated other
comprehensive income (loss) ("AOCI")
|
|
(1,923)
|
|
(1,990)
|
|
Treasury stock, at
cost (1,159,299 shares as of December 31, 2024)
|
|
(30)
|
|
(18)
|
|
Total F&G
Annuities & Life, Inc. shareholders' equity
|
|
$
3,951
|
|
$
3,103
|
|
Non-controlling
interests
|
|
125
|
|
—
|
|
Total
equity
|
|
$
4,076
|
|
$
3,103
|
|
Total liabilities
and equity
|
|
$
85,040
|
|
$
70,202
|
|
F&G ANNUITIES
& LIFE, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
FOURTH QUARTER
INFORMATION
(In millions, except
per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
Year
ended
|
|
|
December 31,
2024
|
|
December 31,
2023
|
|
|
December 31,
2024
|
|
December 31,
2023
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
Life insurance
premiums and other fees
|
|
$
1,149
|
|
$
890
|
|
|
$
2,860
|
|
$
2,413
|
|
Interest and
investment income
|
|
707
|
|
589
|
|
|
2,719
|
|
2,211
|
|
Owned distribution
revenues
|
|
20
|
|
—
|
|
|
81
|
|
—
|
|
Recognized gains and
(losses), net
|
|
(317)
|
|
133
|
|
|
84
|
|
(124)
|
|
Total
revenues
|
|
1,559
|
|
1,612
|
|
|
5,744
|
|
4,500
|
|
Benefits and
expenses
|
|
|
|
|
|
|
|
|
|
|
Benefits and other
changes in policy reserves
|
|
927
|
|
1,632
|
|
|
3,791
|
|
3,553
|
|
Market risk benefit
(gains) losses
|
|
(105)
|
|
115
|
|
|
(25)
|
|
95
|
|
Depreciation and
amortization
|
|
152
|
|
110
|
|
|
569
|
|
412
|
|
Personnel
costs
|
|
81
|
|
65
|
|
|
296
|
|
232
|
|
Other operating
expenses
|
|
54
|
|
39
|
|
|
203
|
|
146
|
|
Interest
expense
|
|
38
|
|
26
|
|
|
132
|
|
97
|
|
Total benefits and
expenses
|
|
1,147
|
|
1,987
|
|
|
4,966
|
|
4,535
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before
income taxes
|
|
412
|
|
(375)
|
|
|
778
|
|
(35)
|
|
Income tax expense
(benefit)
|
|
85
|
|
(76)
|
|
|
136
|
|
23
|
|
Net earnings
(loss)
|
|
327
|
|
(299)
|
|
|
642
|
|
(58)
|
|
Less: Non-controlling
interests
|
|
—
|
|
—
|
|
|
3
|
|
—
|
|
Net earnings (loss)
attributable to F&G
|
|
327
|
|
(299)
|
|
|
639
|
|
(58)
|
|
Less: Preferred stock
dividend
|
|
4
|
|
—
|
|
|
17
|
|
—
|
|
Net earnings (loss)
attributable to F&G common
shareholders
|
|
$
323
|
|
$
(299)
|
|
|
$
622
|
|
$
(58)
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
attributable to F&G common
shareholders per common share
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
2.58
|
|
$
(2.41)
|
|
|
$
4.98
|
|
$
(0.47)
|
|
Diluted
|
|
$
2.50
|
|
$
(2.41)
|
|
|
$
4.88
|
|
$
(0.47)
|
|
Weighted average
common shares used in
computing net earnings (loss) per common share
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
125
|
|
124
|
|
|
125
|
|
124
|
|
Diluted
|
|
131
|
|
124
|
|
|
131
|
|
124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Measures
and Other Information
RECONCILIATION OF
NET EARNINGS (LOSS) AND ADJUSTED NET EARNINGS (LOSS)
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
Year
ended
|
|
|
December 31,
2024
|
|
December 31,
2023
|
|
|
December 31,
2024
|
|
December 31,
2023
|
|
Reconciliation of
net earnings (loss) to adjusted net
earnings attributable to common shareholders ¹
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
attributable to common shareholders
|
|
$
323
|
|
$
(299)
|
|
|
$
622
|
|
$
(58)
|
|
Non-GAAP
adjustments
|
|
|
|
|
|
|
|
|
|
|
Recognized (gains) and
losses, net
|
|
|
|
|
|
|
|
|
|
|
Net realized and
unrealized (gains) losses on fixed
maturity available-for-sale securities, equity securities
and other invested assets
|
|
24
|
|
9
|
|
|
(76)
|
|
98
|
|
Change in allowance
for expected credit losses
|
|
—
|
|
15
|
|
|
32
|
|
48
|
|
Change in fair value
of reinsurance related embedded
derivatives
|
|
(153)
|
|
162
|
|
|
33
|
|
128
|
|
Change in fair value
of other derivatives and
embedded derivatives
|
|
96
|
|
(72)
|
|
|
38
|
|
(60)
|
|
Recognized (gains)
losses, net
|
|
(33)
|
|
114
|
|
|
27
|
|
214
|
|
Market related
liability adjustments
|
|
(233)
|
|
353
|
|
|
(214)
|
|
258
|
|
Purchase price
amortization
|
|
21
|
|
6
|
|
|
84
|
|
22
|
|
Transaction costs,
other and non-recurring items
|
|
19
|
|
—
|
|
|
16
|
|
3
|
|
Non-controlling
interest
|
|
(2)
|
|
—
|
|
|
(10)
|
|
—
|
|
Income taxes
adjustment
|
|
48
|
|
(99)
|
|
|
21
|
|
(104)
|
|
Adjusted net
earnings attributable to common shareholders ¹
|
|
$
143
|
|
$
75
|
|
|
$
546
|
|
$
335
|
|
|
1See
definition of non-GAAP measures below
|
- Adjusted net earnings of $143
million, or $1.12 per share,
for the fourth quarter of 2024 include $138 million, or $1.05 per share, of investment income from
alternative investments, $15 million,
or $0.12 per share, of CLO
redemptions and bond prepay income and $7
million, or $0.05 per share,
of actuarial model refinements and other items. Alternative
investments investment income based on management's long-term
expected return of approximately 10% was $170 million, or $1.30 per share.
- Adjusted net earnings of $75
million, or $0.60 per share,
for the fourth quarter of 2023 include $110 million, or $0.88 per share, of investment income from
alternative investments and $19
million or $0.15 per share of
significant expense items (comprised of $10
million one-time fixed asset impairment charge and
$9 million actuarial industry
assumption updates). Alternative investments investment income
based on management's long-term expected return of approximately
10% was $147 million, or $1.18 per share.
- Adjusted net earnings of $546
million, or $4.30 per share,
for the full year 2024 includes $514
million, or $3.92 per share,
of investment income from alternative investments, $46 million, or $0.35 per share, of CLO redemptions and bond
prepay income, and $14 million, or
$0.11 per share, tax valuation
allowance, partially offset by $26
million, or $0.20 per share,
of net expense from actuarial assumption and model updates and
other items. Alternative investments investment income based on
management's long-term expected return of approximately 10% was
$659 million, or $5.03 per share.
- Adjusted net earnings of $335
million, or $2.68 per share,
for the full year 2023 included $405
million, or $3.24 per share,
of investment income from alternative investments and $51 million, or $0.41 per share, of net significant expense items
(comprised of $37 million tax
valuation allowance, $10 million of
one-time fixed asset impairment charge and $9 million actuarial industry assumption updates,
partially offset by $5 million bond
prepay income). Alternative investments investment income based on
management's long-term expected return of approximately 10% was
$558 million, or $4.46 per share.
|
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,
2024
|
|
September 30,
2024
|
|
June
30,
2024
|
|
March
31,
2024
|
|
Total F&G Annuities
& Life, Inc. shareholders' equity
|
|
3,951
|
|
4,346
|
|
3,654
|
|
3,546
|
|
Less: Preferred
stock
|
|
250
|
|
250
|
|
250
|
|
250
|
|
Total F&G equity
attributable to common shareholders
|
|
3,701
|
|
4,096
|
|
3,404
|
|
3,296
|
|
Less: AOCI
|
|
(1,923)
|
|
(1,231)
|
|
(1,953)
|
|
(1,883)
|
|
Total F&G equity
attributable to common shareholders,
excluding AOCI
|
|
$
5,624
|
|
$
5,327
|
|
$
5,357
|
|
$
5,179
|
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding
|
|
127
|
|
126
|
|
126
|
|
126
|
|
|
|
|
|
|
|
|
|
|
Book value per common
share
|
|
$
29.14
|
|
$
32.51
|
|
$
27.02
|
|
$
26.16
|
|
Book value per common
share, excluding AOCI
|
|
$
44.28
|
|
$
42.28
|
|
$
42.52
|
|
$
41.10
|
|
ASSETS UNDER
MANAGEMENT (AUM) ROLLFORWARD, AVERAGE ASSETS UNDER
MANAGEMENT (AAUM) AND AUM BEFORE FLOW REINSURANCE
|
|
|
|
|
|
Three months
ended
|
|
(In
millions)
|
|
December 31,
2024
|
|
September 30,
2024
|
|
June
30,
2024
|
|
March
31,
2024
|
|
AUM at beginning of
period
|
|
$
52,464
|
|
$
52,208
|
|
$
49,787
|
|
$
49,103
|
|
Net new business asset
flows
|
|
2,270
|
|
1,726
|
|
3,057
|
|
2,116
|
|
Net flow reinsurance to
third parties
|
|
(1,046)
|
|
(1,248)
|
|
(930)
|
|
(1,407)
|
|
Net capital transaction
proceeds (disbursements)
|
|
129
|
|
(222)
|
|
294
|
|
(25)
|
|
AUM at end of
period¹
|
|
$
53,817
|
|
$
52,464
|
|
$
52,208
|
|
$
49,787
|
|
|
|
|
|
|
|
|
|
|
AAUM YTD¹
|
|
$
51,574
|
|
$
50,970
|
|
$
50,181
|
|
$
49,400
|
|
|
|
|
|
|
|
|
|
|
AUM before flow
reinsurance
|
|
$
65,274
|
|
$
62,875
|
|
$
61,370
|
|
$
58,020
|
|
SALES
HIGHLIGHTS
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
Year
ended
|
|
(In
millions)
|
|
December 31,
2024
|
|
December 31,
2023
|
|
|
December 31,
2024
|
|
December 31,
2023
|
|
Total annuity
sales
|
|
2,445
|
|
2,895
|
|
|
11,834
|
|
9,765
|
|
Indexed universal life
("IUL")
|
|
41
|
|
39
|
|
|
166
|
|
156
|
|
Funding agreements
("FABN/FHLB")
|
|
—
|
|
385
|
|
|
1,020
|
|
1,256
|
|
Pension risk transfer
("PRT")
|
|
983
|
|
764
|
|
|
2,242
|
|
1,976
|
|
Gross
sales(1)
|
|
3,469
|
|
4,083
|
|
|
15,262
|
|
13,153
|
|
Sales attributable to
flow reinsurance to third parties
|
|
(1,031)
|
|
(1,534)
|
|
|
(4,691)
|
|
(3,915)
|
|
Net
sales(1)
|
|
$
2,438
|
|
$
2,549
|
|
|
$
10,571
|
|
$
9,238
|
|
|
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 and
"non-recurring," "infrequent" or "unusual items": Other adjustments
include removing any charges associated with U.S. guaranty fund
assessments as these charges neither relate to the ordinary course
of the Company's business nor reflect the Company's underlying
business performance, but result from external situations not
controlled by the Company. Further, 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.
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Total
Capitalization, excluding AOCI
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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.
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Total Equity,
excluding AOCI
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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.
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Total F&G Equity
attributable to common shareholders, excluding AOCI
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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.
