Quarterly Financial Information (Unaudited)

A summary of selected quarterly information follows:



2018	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Full Year
	(dollars in millions, except per share data)
Revenues
Net earned premiums	$	145		$	136		$	142		$	125		$	548
Net investment income	101			99			98			100			398
Net realized investment gains (losses)	(5		)	(2		)	(7		)	(18		)	(32		)
Net change in fair value of credit derivatives	34			48			21			9			112
Fair value gains (losses) on FG VIEs	4			2			5			3			14
Commutation gains	1			(18		)	1			—			(16		)
Other income (loss)	13			(44		)	14			(5		)	(22		)
Expenses
Loss and LAE	(18		)	44			17			21			64
Amortization of DAC	5			4			3			4			16
Interest expense	24			24			23			23			94
Other operating expenses	65			62			56			65			248
Income (loss) before provision for income taxes	217			87			175			101			580
Provision (benefit) for income taxes	20			12			14			13			59
Net income (loss)	197			75			161			88			521
Earnings (loss) per share(1):
Basic	$	1.71		$	0.67		$	1.48		$	0.84		$	4.73
Diluted	$	1.68		$	0.67		$	1.47		$	0.83		$	4.68



2017	First Quarter		Second Quarter			Third Quarter		Fourth Quarter			Full Year
	(dollars in millions, except per share data)
Revenues
Net earned premiums	$	164	$	162		$	186	$	178		$	690
Net investment income	122		101			99		96			418
Net realized investment gains (losses)	32		15			7		(14		)	40
Net change in fair value of credit derivatives	54		(6		)	58		5			111
Fair value gains (losses) on FG VIEs	10		12			3		5			30
Bargain purchase gain and settlement of pre-existing relationships	58		—			—		—			58
Commutation gains	73		—			255		—			328
Other income (loss)	14		24			15		11			64
Expenses
Loss and LAE	59		72			223		34			388
Amortization of DAC	4		4			5		6			19
Interest expense	24		25			24		24			97
Other operating expenses	68		57			58		61			244
Income (loss) before provision for income taxes	372		150			313		156			991
Provision (benefit) for income taxes	55		(3		)	105		104			261
Net income (loss)	317		153			208		52			730
Earnings (loss) per share(1):
Basic	$	2.53	$	1.26		$	1.75	$	0.44		$	6.05
Diluted	$	2.49	$	1.24		$	1.72	$	0.44		$	5.96

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(1)

Per share amounts for the quarters and the full years have each been calculated separately. Accordingly, quarterly amounts may not sum up to the annual amounts because of differences in the average common shares outstanding during each period and, with regard to diluted per share amounts only, because of the inclusion of the effect of potentially dilutive securities only in the periods in which such effect would have been dilutive.