EX-99.2 3 fglholdings3312019financia.htm EXHIBIT 99.2 Exhibit
Exhibit 99.2

fgholdingslogowtagcolor.jpg

FGL Holdings (“F&G”; NYSE: FG)
Investor Supplement
March 31, 2019
(Year Ended December 31)

The financial statements and financial exhibits included herein are unaudited. These financial statements and exhibits should be read in conjunction with the Company's periodic reports on Form 10-K, Form 10-Q and Form 8-K.
As disclosed in the Company’s Form 10-K for the year ended December 31, 2018, the Company identified immaterial errors during the quarters ended September 30, 2018 and June 30, 2018. Management recorded immaterial out of period adjustments and updated the respective balance previously reported for the quarters ended June 30, 2018 and March 31, 2018 and the period ended December 31, 2017 within the financial statements and financial exhibits included herein. See "Note 2. Significant Accounting Policies and Practices" to our audited consolidated financial statements for additional information.

Non-GAAP Financial Measures

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


FGL HOLDINGS
Financial Supplement
March 31, 2019
(All periods are unaudited)
 
Page
 
 
 
 

FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)

NON-GAAP FINANCIAL MEASURES
While management believes that non-GAAP measurements are useful supplemental information, such adjusted results are not intended to replace GAAP financial results and should be read in conjunction with those GAAP results. Our non-GAAP measures may not be comparable to similarly titled measures of other organizations because other organizations may not calculate such non-GAAP measures in the same manner as we do. The following represents the definitions of non-GAAP measures used by the FGL Holdings.
Adjusted Operating Income (AOI)
AOI is a non-GAAP economic measure we use to evaluate financial performance each period. AOI is calculated by adjusting net income (loss) to eliminate:
(i) the impact of net investment gains/losses, including other than temporary impairment ("OTTI") losses recognized in operations, but excluding gains and losses on derivatives hedging our indexed annuity policies,
(ii) the impacts related to changes in the fair values of FIA related derivatives and embedded derivatives, net of hedging cost, and the fair value accounting impacts of assumed reinsurance by our international subsidiaries,
(iii) the tax effect of affiliated reinsurance embedded derivative,
(iv) the effect of change in fair value of the reinsurance related embedded derivative,
(v) the effect of integration, merger related & other non-operating items,
(vi) impact of extinguishment of debt, and
(vii) net impact from Tax Cuts and Jobs Act.
Adjustments to AOI are net of the corresponding impact on amortization of intangibles, as appropriate. The income tax impact related to these adjustments is measured using an effective tax rate, as appropriate by tax jurisdiction. While these adjustments are an integral part of the overall performance of the Company, market conditions and/or the non-operating nature of these items can overshadow the underlying performance of the core business. Accordingly, Management considers this to be a useful measure internally and to investors and analysts in analyzing the trends of our operations.
Beginning with the quarter ended December 31, 2018, the Company updated its AOI definition to remove the incremental change due to the impact of the fair value accounting election for international subsidiaries. Management believes this revision will enhance the understanding of our business as the Company executes its growth strategy through international third party assumed business and is more relevant to investors as the impact of fair value accounting election can create an increases/decreases in the assumed liabilities that does not match the increase/decrease of the corresponding assets. This change will be applied on a prospective basis as the Company executes its growth strategy through international third party assumed reinsurance.
AOI Available to Common Shareholders
AOI available to common shareholders is a non-GAAP economic measure we use to evaluate financial performance attributable to our common shareholders each period. AOI available to common shareholders is calculated by adjusting net income (loss) available to common shareholders to eliminate the same items as described in the AOI paragraph above. While these adjustments are an integral part of the overall performance of the Company, market conditions impacting these items can overshadow the underlying performance of the business. Accordingly, Management considers this to be a useful measure internally and to investors and analysts in analyzing the trends of our operations.
Common Shareholders’ Equity
Common Shareholders’ Equity is based on Total Shareholders’ Equity excluding Equity Available to Preferred Shareholders. Management considers this to be a useful measure internally and to investors to assess the level of equity that is attributable common stock holders.
Common Shareholders’ Equity Excluding AOCI

3
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)

Common Shareholders’ Equity Excluding AOCI is based on Common Shareholders' Equity excluding the effect of AOCI. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments, Management considers this non-GAAP financial measure to provide useful supplemental information internally and to investors and analysts assessing the level of earned equity on common equity.
Equity Available to Preferred Shareholders
Equity available to preferred shareholders is equal to the product of (a) the number of preferred shares outstanding plus share dividends declared but not yet issued and (b) the original liquidation preference amount per share. Management considers this non-GAAP measure to provide useful information internally and to investors and analysts to assess the level of equity that is attributable to preferred stock holders.
Total Capitalization Excluding AOCI
Total Capitalization Excluding AOCI is based on shareholders’ equity excluding the effect of AOCI. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments, Management considers this non-GAAP financial measure to provide useful supplemental information internally and to investors and analysts to help assess the capital position of the Company.
GAAP Book Value per Common Share (including and excluding AOCI)
GAAP Book Value per Common Share including and excluding AOCI is calculated as Common Shareholders’ Equity and Common Shareholders Equity Excluding AOCI 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.
Statutory Book Value per Common Share (including and excluding Interest maintenance reserve ("IMR") and asset valuation reserve ("AVR"))
Statutory Book Value per Common Share including IMR and AVR is calculated as Fidelity & Guaranty Life Insurance Company ("FGL Insurance")’s statutory basis capital and surplus plus the international insurance entities’ common shareholder’s equity and related distributable capital, excluding AOCI divided by the total number of shares of common stock outstanding at FGL Holdings. Statutory Book Value per Common Share excluding IMR and AVR is calculated as FGL Insurance’s statutory basis capital and surplus excluding IMR and AVR plus the international insurance entities’ common shareholder’s equity and related distributable capital, excluding AOCI, divided by the total number of shares of common stock outstanding at FGL Holdings. Management considers this to be a useful measure internally and for investors and analysts to assess the capital position of our primary insurance entities.
Return on Average Common Shareholders’ Equity
Return on Average Common Shareholders' Equity is calculated by dividing net income (loss) available to common shareholders by total average Common Shareholders’ Equity. Average Common Shareholders Equity for the twelve months rolling, is the average of 5 points throughout the period and for the quarterly average Common Shareholders Equity is calculated using the beginning and ending Common Shareholders’ Equity for the period. For periods less than a full fiscal year, amounts disclosed in the table are annualized. As a result of the merger, the starting point for calculation of average Common Shareholders’ Equity was reset to December 1, 2017. The rolling average will be updated from the merger date forward to use available historical data points until 5 historical data points are available. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments, Management considers this to be a useful measure internally and for investors and analysts to assess the level of return driven by the Company that is attributable to common shareholders.
Return on Average Common Shareholders Equity Excluding AOCI
Return on Average Common Shareholders' Equity Excluding AOCI is calculated by dividing net income (loss) available to common shareholders by total average Common Shareholders’ Equity Excluding AOCI. Average Common Shareholders Equity Excluding AOCI for the twelve months rolling, is the average of 5 points throughout the period and for the quarterly average Common Shareholders Equity Excluding AOCI is calculated using the beginning and ending Common Shareholders’ Equity, excluding AOCI, for the period. For periods less than a full fiscal year, amounts disclosed in the table are annualized. As a result of the merger, the starting point for calculation of average Common Shareholders’ Equity was reset to December 1, 2017. The rolling average will be updated from the merger date forward to use available historical data points until 5 historical data points are available. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments, Management considers this to be a useful measure internally and for investors and analysts to assess the level of return driven by the Company that is attributable to common shareholders.

4
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)

Adjusted Operating Return on Average Common Shareholders’ Equity Excluding AOCI
Adjusted Operating Return on Common Shareholders’ Equity Excluding AOCI is calculated by dividing AOI Available to Common Shareholders’ by total average Common Shareholders’ Equity Excluding AOCI. Average Common Shareholders’ Equity Excluding AOCI for the twelve months rolling, is the average of 5 points throughout the period and for the quarterly average Common Shareholders Equity is calculated using the beginning and ending Common Shareholders Equity, Excluding AOCI, for the period. For periods less than a full fiscal year, amounts disclosed in the table are annualized. As a result of the merger, the starting point for calculation of average Common Shareholders’ Equity was reset to December 1, 2017. The rolling average will be updated from the merger date forward to use available historical data points until 5 historical data points are available. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments, Management considers this non-GAAP financial measure to provide useful supplemental information internally and to investors and analysts assessing the level of adjusted earned return on common equity.
Debt-to-Capital excluding AOCI
Debt-to-capital ratio is computed by dividing total debt by total capitalization excluding AOCI. Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing its capital position.
Rating Agency Adjusted Debt to Capitalization, excluding AOCI
Rating Agency Adjusted Debt to Capitalization, excluding AOCI is computed by dividing the sum of total debt and 50% Equity Available to Preferred Shareholders by total capitalization excluding AOCI less a 50% credit for Equity Available to Preferred Shareholders. Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing its capital position.
Average Assets Under Management (AAUM)
AAUM is the sum of (i) total invested assets at amortized cost, excluding derivatives; (ii) related party loans and investments; (iii) accrued investment income; (iv) funds withheld at fair value; (v) the net payable/receivable for the purchase/sale of investments and (iv) cash and cash equivalents, excluding derivative collateral, at the beginning of the period and the end of each month in the period, divided by the total number of months in the period plus one. Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the rate of return on assets available for reinvestment.
Yield on AAUM
Yield on AAUM is calculated by dividing annualized net investment income by AAUM. Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the level of return earned on AAUM.
Net Investment Spread
Net investment spread is the excess of net investment income earned over the sum of interest credited to policyholders and the cost of hedging our risk on FIA policies. Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the performance of the Company’s invested assets against the level of investment return provided to policyholders, inclusive of hedging costs.
Investment Book Yield
Investment book yield on bonds purchased during the period excludes yield on short-term treasuries and cash and cash equivalents. Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the level of return on the Company’s income generating invested assets.

5
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)


FGL HOLDINGS
Consolidated Financial Highlights

 
Three months ended
 
March 31, 2019
 
December 31, 2018
 
September 30, 2018
 
June 30, 2018
 
March 31,
2018
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Dollars in millions, except per share data)
Revenues:
 
 
 
 
 
 
 
 
 
Premiums
$
16

 
$
9

 
$
12

 
$
15

 
$
18

Net investment income
289

 
295

 
267

 
282

 
263

Net investment gains (losses)
240

 
(555
)
 
119

 
(2
)
 
(191
)
Insurance and investment product fees and other
55

 
40

 
46

 
45

 
48

Total revenues
600

 
(211
)
 
444

 
340

 
138

 
 
 
 
 
 
 
 
 
 
Net income (loss)
$
171

 
$
(148
)
 
$
56

 
$
40

 
$
65

Adjusted Operating Income ("AOI") (1)
$
90

 
$
84

 
$
69

 
$
65

 
$
68

Dividends on preferred stock
(8
)
 
(8
)
 
(7
)
 
(7
)
 
(7
)
AOI available to common shareholders
82

 
76

 
62

 
58

 
61

 
 
 
 
 
 
 
 
 
 
Per Unrestricted Common Shares Amounts:
 
 
 
 
 
 
 
 
 
Basic:
 
 
 
 
 
 
 
 
 
Net income (loss) available to common shareholders
$
0.74

 
$
(0.70
)
 
$
0.23

 
$
0.15

 
$
0.27

AOI available to common shareholders (1)
$
0.37

 
$
0.34

 
$
0.29

 
$
0.27

 
$
0.28

Diluted:
 
 
 
 
 
 
 
 
 
Net income (loss) available to common shareholders
$
0.74

 
$
(0.70
)
 
$
0.23

 
$
0.15

 
$
0.27

AOI available to common shareholders (1)
$
0.37

 
$
0.34

 
$
0.29

 
$
0.27

 
$
0.28

 
 
 
 
 
 
 
 
 
 
Dividends Paid to Common Shareholders Per Share
$
0.01

 
$
—

 
$
—

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

6
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)

 
Three months ended
 
March 31, 2019
 
December 31, 2018
 
September 30, 2018
 
June 30, 2018
 
March 31,
2018
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
At Period End
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
1,357

 
$
571

 
$
944

 
$
1,710

 
$
1,157

Total investments
$
24,510

 
$
23,917

 
$
24,411

 
$
22,860

 
$
23,232

Total assets
$
32,446

 
$
30,945

 
$
30,960

 
$
30,004

 
$
29,651

Contractholder funds
$
23,881

 
$
23,387

 
$
23,164

 
$
22,504

 
$
22,045

Future policy benefits
$
4,677

 
$
4,641

 
$
4,631

 
$
4,710

 
$
4,711

Debt (including revolving credit facility)
$
541

 
$
541

 
$
540

 
$
540

 
$
442

Total equity
$
1,751

 
$
890

 
$
1,474

 
$
1,382

 
$
1,666

Total equity excluding Accumulated Other Comprehensive Income (AOCI)
$
1,967

 
$
1,827

 
$
2,043

 
$
1,985

 
$
1,944

Common shares issued and outstanding
217.33

 
221.06

 
214.37

 
214.37

 
214.37

 
 
 
 
 
 
 
 
 
 
GAAP Book value per common share (1)
$
6.15

 
$
2.19

 
$
5.02

 
$
4.62

 
$
5.98

GAAP Book value per common share excluding AOCI (1)
$
7.15

 
$
6.43

 
$
7.67

 
$
7.44

 
$
7.28

Debt to total Capitalization excluding AOCI (1)
21.9
%
 
23.1
 %
 
21.2
%
 
21.7
%
 
18.5
%
Return on average common shareholders' equity excluding AOCI (1)
43.8
%
 
(40.7
)%
 
12.1
%
 
8.4
%
 
15.1
%
Statutory Book value per share (1) (2)
$
8.56

 
$
8.15

 
$
8.83

 
$
8.87

 
$
8.32

Statutory Book value per share excluding IMR and AVR (1) (2)
$
11.28

 
$
10.78

 
$
11.65

 
$
11.58

 
$
10.98

(1) Refer to "Non-GAAP Financial Measures" for further details
(2) Statutory book value per share measures reflect an increase in the share count at December 31, 2018 as a result of the tender of warrants on our common stock. The book value of our international subsidiaries and statutory per share measures have been trued-up in prior periods to be more representative of our combined regulatory capital position.

7
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)

FGL HOLDINGS
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except per share data)
 
March 31, 2019
 
December 31, 2018
 
September 30,
2018
 
June 30, 2018
 
March 31, 2018
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
ASSETS
 
 
 
 
 
 
 
 
 
Investments:
 
 
 
 
 
 
 
 
 
Fixed maturity securities, available-for-sale, at fair value (amortized cost: March 31, 2019 - $21,908; December 31, 2018 - $22,219)
$
21,605

 
$
21,109

 
$
21,421

 
$
20,326

 
$
21,040

Equity securities, at fair value (cost: March 31, 2019 - $1,226; December 31, 2018 - $1,526)
1,171

 
1,382

 
1,440

 
1,344

 
1,095

Derivative investments
305

 
97

 
432

 
312

 
293

Short term investments
—

 
—

 
15

 
—

 
—

Mortgage loans
674

 
667

 
497

 
525

 
528

Other invested assets
755

 
662

 
606

 
353

 
276

Total investments
24,510

 
23,917

 
24,411

 
22,860

 
23,232

Cash and cash equivalents
1,357

 
571

 
944

 
1,710

 
1,157

Accrued investment income
238

 
216

 
230

 
215

 
240

Funds withheld for reinsurance receivables, at fair value
837

 
757

 
708

 
769

 
748

Reinsurance recoverable
3,113

 
3,190

 
2,460

 
2,476

 
2,495

Intangibles, net
1,421

 
1,359

 
1,205

 
1,070

 
954

Deferred tax assets, net
283

 
343

 
285

 
283

 
260

Goodwill
467

 
467

 
467

 
467

 
467

Other assets
220

 
125

 
250

 
154

 
105

Total assets
$
32,446

 
$
30,945

 
$
30,960

 
$
30,004

 
$
29,658

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

8
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)

 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
Contractholder funds (a)
$
23,881

 
$
23,387

 
$
23,164

 
$
22,504

 
$
22,045

Future policy benefits, including $797 and $725 at fair value at March 31, 2019 and December 31, 2018, respectively (b)
4,677

 
4,641

 
4,631

 
4,710

 
4,711

Funds withheld for reinsurance liabilities
653

 
722

 
3

 
2

 
3

Liability for policy and contract claims (c)
70

 
64

 
60

 
74

 
70

Debt
541

 
541

 
540

 
540

 
307

Revolving credit facility
—

 
—

 
—

 
—

 
135

Other liabilities
873

 
700

 
1,088

 
792

 
721

Total liabilities
30,695

 
30,055

 
29,486

 
28,622

 
27,992

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shareholders' equity:
 
 
 
 
 
 
 
 
 
Preferred stock ($.0001 par value, 100,000,000 shares authorized, 406,510 and 399,033 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively)
—

 
—

 
—

 
—

 
—

Common stock ($.0001 par value, 800,000,000 shares authorized, 221,660,974 and 221,660,974 issued and outstanding at March 31, 2019 and December 31, 2018, respectively)
—

 
—

 
—

 
—

 
—

Additional paid-in capital
2,007

 
1,998

 
2,056

 
2,047

 
2,039

Retained earnings (Accumulated deficit)
(6
)
 
(167
)
 
(13
)
 
(62
)
 
(95
)
Accumulated other comprehensive income (loss)
(216
)
 
(937
)
 
(569
)
 
(603
)
 
(278
)
Treasury stock, at cost (4,328,077 shares at March 31, 2019; 600,000 shares at December 31, 2018)
(34
)
 
(4
)
 
—

 
—

 
—

Total shareholders' equity
1,751

 
890

 
1,474

 
1,382

 
1,666

Total liabilities and shareholders' equity
$
32,446

 
$
30,945

 
$
30,960

 
$
30,004

 
$
29,658

 
 
 
 
 
 
 
 
 
 
Equity attributable to preferred shareholders (1)
$
414

 
$
406

 
$
398

 
$
391

 
$
384

(1) Refer to "Non-GAAP Financial Measures" for further details
(a) Contractholder funds include amounts on deposit for annuity and universal life contracts plus the fair value of future index credits and guarantees on our FIA and IUL products.
(b) Future policy benefits include the present value of future benefits on our traditional life insurance products, life contingent SPIA contracts, long-term care block and offshore reinsurance annuity products.
(c) Liability for policy and contract claims represents policyholder pending claims.


9
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)

Quarterly Summary - Most Recent 5 Quarters
 
Three months ended
 
March 31, 2019
 
December 31, 2018
 
September 30,
2018
 
June 30, 2018
 
March 31, 2018
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Dollars in millions, except per share data)
Revenues:
 
 
 
 
 
 
 
 
 
Traditional life insurance premiums
$
8

 
$
7

 
$
7

 
$
7

 
$
9

Life contingent immediate annuity
8

 
2

 
5

 
8

 
9

Net investment income
289

 
295

 
267

 
282

 
263

Net investment gains (losses)
240

 
(555
)
 
119

 
(2
)
 
(191
)
Surrender charges
8

 
9

 
9

 
12

 
14

Cost of insurance fees and other income
47

 
31

 
37

 
33

 
34

Total revenues
600

 
(211
)
 
444

 
340

 
138

Benefits and expenses:
 
 
 
 
 
 
 
 
 
Traditional life insurance policy benefits and change in future policy benefits
18

 
20

 
17

 
22

 
18

Life contingent immediate annuity benefits and changes in future policy benefits
5

 
12

 
13

 
13

 
18

Interest sensitive and index product benefits and changes in future policy benefits
316

 
(84
)
 
267

 
182

 
(75
)
General expenses
31

 
47

 
31

 
37

 
34

Acquisition expenses
103

 
106

 
94

 
94

 
55

Deferred acquisition costs ("DAC")
(90
)
 
(98
)
 
(85
)
 
(85
)
 
(49
)
Amortization of intangibles
29

 
(23
)
 
28

 
17

 
27

        Total benefits and expenses
412

 
(20
)
 
365

 
280

 
28

Operating income
188

 
(191
)
 
79

 
60

 
110

Interest expense
(8
)
 
(8
)
 
(8
)
 
(7
)
 
(6
)
Income before income taxes
180

 
(199
)
 
71

 
53

 
104

Income tax expense
(9
)
 
51

 
(15
)
 
(13
)
 
(39
)
Net income (loss)
$
171

 
$
(148
)
 
$
56

 
$
40

 
$
65

Less Preferred stock dividend
8

 
8

 
7

 
7

 
7

Net income (loss) available to common shareholders
$
163

 
$
(156
)
 
$
49

 
$
33

 
$
58

 
 
 
 
 
 
 
 
 
 
Net income (loss) per common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
$
0.74

 
$
(0.70
)
 
$
0.23

 
$
0.15

 
$
0.27

Diluted
$
0.74

 
$
(0.70
)
 
$
0.23

 
$
0.15

 
$
0.27

Weighted average common shares used in computing net income per common share:
 
 
 
 
 
 
 
 
 
Basic
219.65

 
220.91

 
214.37

 
214.37

 
214.37

Diluted
219.68

 
220.91

 
214.42

 
214.38

 
214.37


10
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)


Reconciliation from Net Income (Loss) to AOI
 
Three months ended
 
March 31, 2019
 
December 31, 2018
 
September 30,
2018
 
June 30, 2018
 
March 31, 2018
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Dollars in millions, except per share data)
Net income (loss)
$
171

 
$
(148
)
 
$
56

 
$
40

 
$
65

Adjustments to arrive at AOI:
 
 
 
 
 
 
 
 
 
Effect of investment losses (gains), net of offsets (a)
(70
)
 
174

 
38

 
37

 
39

Impacts related to changes in the fair values of FIA related derivatives and embedded derivatives, net of hedging cost, and the fair value accounting impacts of assumed reinsurance by our international subsidiaries (a) (b)
(17
)
 
77

 
(30
)
 
(9
)
 
(63
)
Effect of change in fair value of reinsurance related embedded derivative, net of offsets (a)
19

 
—

 
—

 
—

 
—

Effect of integration, merger related & other non-operating items
(3
)
 
25

 
4

 
3

 
8

Effects of extinguishment of debt
—

 
—

 
—

 
(2
)
 
—

Tax effect of affiliated reinsurance embedded derivative
—

 
(15
)
 
—

 
—

 
15

Net impact of Tax Cuts and Jobs Act (c)
—

 
—

 
3

 
—

 
—

Tax impact of adjusting items
(10
)
 
(29
)
 
(2
)
 
(4
)
 
4

AOI
$
90

 
$
84

 
$
69

 
$
65

 
$
68

Dividends on preferred stock
(8
)
 
(8
)
 
(7
)
 
(7
)
 
(7
)
AOI available to common shareholders
$
82

 
$
76

 
$
62

 
$
58

 
$
61

 
 
 
 
 
 
 
 
 
 
Per diluted common share:
 
 
 
 
 
 
 
 
 
Net income (loss) available to common shareholders
$
0.74

 
$
(0.70
)
 
$
0.23

 
$
0.15

 
$
0.27

Adjustments to arrive at AOI:
 
 
 
 
 
 
 
 
 
Effect of investment (gains) losses, net of offsets (a)
(0.32
)
 
0.78

 
0.18

 
0.17

 
0.18

Impacts related to changes in the fair values of FIA related derivatives and embedded derivatives, net of hedging cost, and the fair value accounting impacts of assumed reinsurance by our international subsidiaries (a) (b)
(0.08
)
 
0.35

 
(0.14
)
 
(0.04
)
 
(0.29
)
Effect of change in fair value of reinsurance related embedded derivative, net of offsets (a)
0.09

 
—

 
—

 
—

 
—

Effect of integration, merger related & other non-operating items
(0.01
)
 
0.11

 
0.02

 
0.01

 
0.04

Effects of extinguishment of debt
—

 
—

 
—

 
(0.01
)
 
—

Tax effect of affiliated reinsurance embedded derivative
—

 
(0.07
)
 
—

 
—

 
0.07

Net impact of Tax Cuts and Jobs Act (c)
—

 
—

 
0.01

 
—

 
—

Tax impact of adjusting items
(0.05
)
 
(0.13
)
 
(0.01
)
 
(0.01
)
 
0.01

AOI available to common shareholders per diluted share
$
0.37

 
$
0.34

 
$
0.29

 
$
0.27

 
$
0.28

(a) Amounts are net of offsets related to value of business acquired ("VOBA"), deferred acquisition cost ("DAC"), deferred sale inducement ("DSI"), unearned revenue ("UREV") amortization and cost of reinsurance intangible, as applicable.
(b) The updated definition removes the fair value impacts of assumed reinsurance by our international subsidiaries for periods after September 30, 2018.
(c) The Company recorded an immaterial out of period adjustment related to the December 1, 2017 fair value of the deferred income tax valuation allowance acquired from the Business Combination. See "Note 2. Significant Accounting Policies and Practices" of the Company’s Form 10-K for additional information.


11
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)


Summary of Adjustments to Arrive at AOI

 
Three months ended
 
March 31, 2019
 
December 31, 2018
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Dollars in millions)
Revenue:
 
 
 
 
 
 
 
 
 
Insurance and investment product fees and other (a)
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Net investment gains (losses) (b)
(221
)
 
493

 
(92
)
 
(3
)
 
163

Increase (decrease) in total revenues
(221
)
 
493

 
(92
)
 
(3
)
 
163

 
 
 
 
 
 
 
 
 
 
Benefits and expenses:
 
 
 
 
 
 
 
 
 
Benefits and other changes in policy reserves (c)
161

 
(182
)
 
105

 
39

 
(188
)
Acquisition and operating expenses, net of deferrals
(3
)
 
12

 
(1
)
 
3

 
8

Amortization of intangibles (d)
(8
)
 
(47
)
 
—

 
(8
)
 
1

(Decrease) increase in total benefits and expenses
150

 
(217
)
 
104

 
34

 
(179
)
 
 
 
 
 
 
 
 
 
 
Increase (decrease) in pre-tax operating income
(71
)
 
276

 
12

 
31

 
(16
)
 
 
 
 
 
 
 
 
 
 
(Decrease) increase in interest expense
—

 
—

 
—

 
(2
)
 
—

(Decrease) increase in income tax expense (benefit) (e)
(10
)
 
(44
)
 
1

 
(4
)
 
19

Increase (decrease) in net income
$
(81
)
 
$
232

 
$
13

 
$
25

 
$
3


(a) Insurance and investment product fees and other: includes the effect of contract fee termination.
(b) Net investment gains (losses): includes the effect of net investment gains (losses) including OTTI, changes in fair values of FIA related derivatives and embedded derivatives, net of hedging costs. For periods after September 30, 2018, effects of net investment gains include the change in fair value of the reinsurance related embedded derivative.
(c) Benefits and other changes in policy reserves: includes the effects of the changes in fair values of FIA embedded derivatives and the fair value impacts of assumed reinsurance by our international subsidiaries.
(d) Amortization of intangibles includes the impact on DAC, VOBA, DSI and cost of reinsurance of the adjustments in b-c above.
(e) The tax expense (benefit) includes the tax impact of the adjustments in a-d above and the impact of tax reform and the impact of affiliated reinsurance embedded derivative.

12
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)

Notable Items Included in Net Income (Loss) and AOI

Each quarterly reporting period, we identify notable items that help explain the trends in our Net income (loss) and AOI. The amounts below are included in disclosures within the Company's earnings releases to explain our Net income (loss) and AOI results as we believe these items provide further clarity to the financial performance of the business.  
 
Three months ended
 
March 31, 2019
 
December 31, 2018
 
September 30,
2018
 
June 30, 2018
 
March 31, 2018
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Dollars in millions)
Net income (loss)
$
171

 
$
(148
)
 
$
56

 
$
40

 
$
65

 
 
 
 
 
 
 
 
 
 
AOI
$
90

 
$
84

 
$
69

 
$
65

 
$
68

Notable Items (Not Trendable) Included within AOI and Net Income [(unfavorable)/favorable]
 
 
 
 
 
 
 
 
 
Project expenses (a)
(2
)
 
(2
)
 
—

 
(3
)
 
—

Single premium immediate annuities ("SPIA") mortality & other reserve adjustments (b)
14

 
4

 
5

 
5

 
8

Assumption review & DAC, VOBA, DSI and cost of reinsurance unlocking (c)
—

 
(4
)
 
5

 
—

 
—

Bond prepay income / other (d)
5

 
15

 
—

 
4

 
—

(a) Project related expenses.
(b) The release of annuity reserves associated with mortality of annuitants, which varies due to timing, volume and severity of experience, and other reserve adjustments.
(c) Reflects unlocking from updating our DAC, VOBA, DSI and cost of reinsurance amortization models for actual experience and equity market fluctuations. Also, annually in the 3rd calendar quarter, we complete our Annual Assumption Review & Unlocking process by adjusting our valuation assumptions to align with actual experience.
(d) Bond prepayment income, changes in tax valuation, and other allowances related to reinsurance and agent debt, reinsurance settlements and other net favorable activity.

13
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)

Capitalization/Book Value per Share

 
March 31, 2019
 
December 31, 2018
 
September 30,
2018
 
June 30, 2018
 
March 31, 2018
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Dollars in millions, except per share data)
Capitalization:
 
 
 
 
 
 
 
 
 
Debt
$
550

 
$
550

 
$
550

 
$
550

 
$
442

Total debt
550

 
550

 
550

 
550

 
442

Total shareholders' equity
1,751

 
890

 
1,474

 
1,382

 
1,666

Total capitalization
2,301

 
1,440

 
2,024

 
1,932

 
2,108

AOCI
(216
)
 
(937
)
 
(569
)
 
(603
)
 
(278
)
Total capitalization excluding AOCI (1)
$
2,517

 
$
2,377

 
$
2,593

 
$
2,535

 
$
2,386

 
 
 
 
 
 
 
 
 
 
Total shareholders' equity
1,751

 
890

 
1,474

 
1,382

 
1,666

Equity available to preferred shareholders
414

 
406

 
398

 
391

 
384

Common shareholders' equity
1,337

 
484

 
1,076

 
991

 
1,282

AOCI
(216
)
 
(937
)
 
(569
)
 
(603
)
 
(278
)
Total common shareholders' equity excluding AOCI (1)
$
1,553

 
$
1,421

 
$
1,645

 
$
1,594

 
$
1,560

 
 
 
 
 
 
 
 
 
 
Common shares outstanding
217.33

 
221.06

 
214.37

 
214.37

 
214.37

 
 
 
 
 
 
 
 
 
 
Book Value per Share: (1)
 
 
 
 


 
 
 
 
GAAP Book value per common share including AOCI (1)
$
6.15

 
$
2.19

 
$
5.02

 
$
4.62

 
$
5.98

GAAP Book value per common share excluding AOCI (1)
$
7.15

 
$
6.43

 
$
7.67

 
$
7.44

 
$
7.28

 
 
 
 
 
 
 
 
 
 
Debt-to-Capital Ratios: (1)
 
 
 
 
 
 
 
 
 
Total Debt to Capitalization, excluding AOCI (1)
21.9
%
 
23.1
 %
 
21.2
%
 
21.7
%
 
18.5
%
Rating Agency Adjusted Debt to Capitalization, excluding AOCI (1)
30.1
%
 
31.7
 %
 
28.9
%
 
29.4
%
 
26.6
%
 
 
 
 
 
 
 
 
 
 
 
Twelve months ended
Twelve Month Rolling Average Return on Equity ("ROE")
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
Return on Common Shareholders' Equity (1)
 
 
 
 
 
 
 
 
 
Return on average common shareholders' equity
10.3
%
 
(1.5
)%
 
15.1
%
 
14.1
%
 
16.2
%
Return on average common shareholders' equity, excluding AOCI (1)
5.7
%
 
(1.0
)%
 
11.8
%
 
11.7
%
 
15.1
%
 
 
 
 
 
 
 
 
 
 
Return on Common Shareholders' Equity - AOI (1)
 
 
 
 
 
 
 
 
 
Adjusted Operating return on common shareholders' equity, excluding AOCI (1)
17.9
%
 
16.6
 %
 
15.3
%
 
15.3
%
 
15.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

14
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)


 
Three months ended
Quarterly Average ROE
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
Return on average common shareholders' equity
71.6
%
 
(80.0
)%
 
19.0
%
 
11.6
%
 
16.2
%
Return on average common shareholders' equity, excluding AOCI (1)
43.8
%
 
(40.7
)%
 
12.1
%
 
8.4
%
 
15.1
%
Adjusted Operating return on common shareholders' equity, excluding AOCI (1)
22.1
%
 
19.8
 %
 
15.3
%
 
14.7
%
 
15.9
%
 
 
 
 
 
 
 
 
 
 
(1) Refer to "Non-GAAP Financial Measures" for further details



15
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)



Financial Strength Ratings

 
 
A.M. Best
 
Fitch
 
Moody's
 
S&P
Holding Company Ratings
 
 
 
 
 
 
 
 
FGL Holdings
 
 
 
 
 
 
 
 
Issuer Credit / Default Rating
 
Not Rated
 
BB+
 
Ba3
 
BB+
Outlook
 
 
 
Positive
 
Stable
 
Positive
CF Bermuda Holdings Limited
 
 
 
 
 
 
 
 
Issuer Credit / Default Rating
 
Not Rated
 
BB+
 
Ba2
 
BB+
Outlook
 
 
 
Positive
 
Stable
 
Positive
Fidelity & Guaranty Life Holdings, Inc.
 
 
 
 
 
 
 
 
Issuer Credit / Default Rating
 
bbb-
 
BB+
 
Not Rated
 
BB+
Outlook
 
Stable
 
Positive
 
Not Rated
 
Positive
Senior Unsecured Notes
 
bbb-
 
BB
 
Ba2
 
BB+
Outlook
 
Stable
 
Positive
 
Stable
 
 
 
 
 
 
 
 
 
 
 
Operating Subsidiary Ratings
 
 
 
 
 
 
 
 
Fidelity & Guaranty Life Insurance Company
 
 
 
 
 
 
 
 
Financial Strength Rating
 
A-
 
BBB
 
Baa2
 
BBB+
Outlook
 
Stable
 
Positive
 
Stable
 
Stable
Fidelity & Guaranty Life Insurance Company of New York
 
 
 
 
 
 
 
 
Financial Strength Rating
 
A-
 
BBB
 
Not Rated
 
BBB+
Outlook
 
Stable
 
Positive
 
Not Rated
 
Stable
F&G Reinsurance Ltd
 
 
 
 
 
 
 
 
Financial Strength Rating
 
A-
 
BBB-
 
Not Rated
 
Not Rated
Outlook
 
Stable
 
Stable
 
Not Rated
 
Not Rated
F&G Life Re Ltd
 
 
 
 
 
 
 
 
Financial Strength Rating
 
Not Rated
 
BBB
 
Baa2
 
BBB+
Outlook
 
 
 
Positive
 
Stable
 
Stable
*Reflects current ratings and outlooks as of date of filing
 
 
 
 
 
 
 
 



16
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)

Net Investment Spread Results
(Dollars in millions)
Three months ended
 
March 31, 2019
 
March 31, 2018
 
(Unaudited)
 
(Unaudited)
Yield on average assets under management "AAUM" (1)
4.47
 %
 
4.21
 %
Less: Interest credited and option cost
(2.30
)%
 
(2.33
)%
Total net investment spread - All product lines (1)
2.17
 %
 
1.88
 %
 
 
 
 
FIA net investment spread
2.54
 %
 
2.34
 %
 
 
 
 
Gross investment book yield - bonds purchased during the period (1)
5.35
 %
 
4.92
 %
 
 
 
 
Net investment book yield - bonds purchased during the period (1)
4.93
 %
 
4.76
 %
 
 
 
 
AAUM (1)
$
25,862

 
$
24,967

(1) Refer to "Non-GAAP Financial Measures" for further details


 


 
 
 
 
Total Product Net Investment Spread
(Dollars in millions)
Three months ended
 
March 31, 2019
 
March 31, 2018
 
(Unaudited)
 
(Unaudited)
Net investment income
$
289

 
$
263

AAUM
25,862

 
24,967

Yield
4.47
 %
 
4.21
 %
 
 
 
 
Interest credits, less DSI
$
67

 
$
73

Option & futures costs
62

 
52

Total interest credited and option costs
$
129

 
$
125

Average account value
22,435

 
21,418

Interest credited & option cost
2.30
 %
 
2.33
 %
Net investment spread
2.17
 %
 
1.88
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

17
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)

FIA Net Investment Spread
(Dollars in millions)
Three months ended
 
March 31, 2019
 
March 31, 2018
 
(Unaudited)
 
(Unaudited)
Net investment income
$
178

 
$
164

AAUM
15,904

 
15,350

Yield
4.48
 %
 
4.27
 %
 
 
 
 
Interest credits, less DSI
$
13

 
$
17

Option & futures costs
62

 
52

Total interest credited and option costs
$
75

 
$
69

Average account value
15,474

 
14,238

Interest credited & option cost
1.94
 %
 
1.94
 %
Net investment spread
2.54
 %
 
2.34
 %


Sales Results by Product

(Dollars in millions)
Three months ended
 
March 31, 2019
 
December 31, 2018
 
September 30,
2018
 
June 30,
2018
 
March 31, 2018
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
Fixed index annuities (FIA)
$
668

 
$
667

 
$
631

 
$
549

 
$
436

Fixed rate annuities (MYGA)
280

 
185

 
211

 
220

 
142

Institutional spread based
105

 
105

 
—

 
—

 
200

Total annuity
$
1,053

 
$
957

 
$
842

 
$
769

 
$
778

Index universal life
8

 
8

 
7

 
7

 
6

Flow reinsurance
60

 
53

 
$
45

 
54

 
33

Total Sales
$
1,121

 
$
1,018

 
$
894

 
$
830

 
$
817

(1) Institutional spread based product sales from funding agreement investment contracts issued with the Federal Home Loan Bank and held in our separate account.



18
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)

Annuity Account Balance Rollforward (a)

(Dollars in millions)
Three months ended
 
March 31, 2019
 
December 31, 2018
 
September 30,
2018
 
June 30, 2018
 
March 31, 2018
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
Account balances at beginning of period:
$
18,927

 
$
19,335

 
$
18,769

 
$
18,326

 
$
18,041

Net deposits
921

 
884

 
845

 
756

 
548

Premium and interest bonuses
16

 
17

 
14

 
14

 
14

Fixed interest credited and index credits
64

 
99

 
148

 
143

 
177

Guaranteed product rider fees
(26
)
 
(27
)
 
(21
)
 
(23
)
 
(22
)
Surrenders, withdrawals, deaths, etc.
(711
)
 
(624
)
 
(420
)
 
(447
)
 
(432
)
Reinsurance treaty cession
—

 
(758
)
 
—

 
—

 
 
Account balance at end of period
$
19,191

 
$
18,926

 
$
19,335

 
$
18,769

 
$
18,326

(a) The rollforward reflects the vested account balance of our fixed index annuities and fixed rate annuities, net of reinsurance.
 
Deferred Annuity Rider Reserve Summary

(Dollars in millions)
March 31, 2019
 
December 31, 2018
 
September 30, 2018
 
June 30,
2018
 
March 31, 2018
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
Rider reserve
$
227

 
$
211

 
$
193

 
$
183

 
$
165

Account value with rider reserves
9,924

 
9,593

 
9,177

 
8,758

 
8,392

Rider reserves as a percentage of account value with rider reserves
2.3
%
 
2.2
%
 
2.1
%
 
2.1
%
 
2.0
%




19
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)

Annuity Deposits by Product Type

 
Three months ended

March 31, 2019
 
March 31, 2018
 
(Unaudited)
 
(Unaudited)
Product Type
(Dollars in millions)
Fixed Index Annuities:
 
 
 
Index Strategies
$
558

 
$
336

Fixed Strategy
81

 
68

 
639

 
404

 
 
 
 
Fixed Rate Annuities:
 
 
 
Single-Year Rate Guaranteed
5

 
1

Multi-Year Rate Guaranteed
278

 
143

Total before coinsurance ceded
922

 
548

Coinsurance ceded
1

 
—

Net after coinsurance ceded
$
921

 
$
548




Surrender Charge Protection and Account Values by Product Type
Annuity Surrender Charges and Account Values (net of reinsurance) at March 31, 2019 (unaudited):
 
 
Surrender Charge
 
Net Account Value
 
 
(Unaudited)
Product Type
 
Avg. Years at Issue
 
Avg. Years Remaining
 
Avg. % Remaining
 
Dollars in millions
 
%
Fixed Index Annuities
 
11
 
6
 
8
%
 
$
15,617

 
81
%
Single-Year Rate Guaranteed
 
10
 
1
 
1
%
 
305

 
2
%
Multi-Year Rate Guaranteed
 
5
 
4
 
7
%
 
3,269

 
17
%
Total
 
 
 
 
 
 
 
$
19,191

 
100
%



20
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)



Annuity Liability Characteristics

 
 
Fixed Annuities Account Value
 
Fixed Index Annuities Account Value
 
 
(Unaudited)
 
 
(Dollars in millions)
SURRENDER CHARGE PERCENTAGES:
 
 
 
 
No surrender charge
 
$
399

 
$
2,333

0.0% < 2.0%
 
7

 
123

2.0% < 4.0%
 
21

 
299

4.0% < 6.0%
 
330

 
1,056

6.0% < 8.0%
 
931

 
2,012

8.0% < 10.0%
 
1,871

 
3,196

10.0% or greater
 
15

 
6,598

 
 
$
3,574

 
$
15,617


 
 
Fixed and Fixed Index Annuities Account Value
 
Weighted Average Surrender Charge
 
 
(Unaudited)
 
 
(Dollars in millions)
SURRENDER CHARGE EXPIRATION BY YEAR:
 
 
 
 
Out of surrender charge
 
$
2,614

 
—
%
2019
 
676

 
4
%
2020 - 2021
 
3,399

 
6
%
2022 - 2023
 
2,578

 
8
%
2024 - 2025
 
3,603

 
9
%
Thereafter
 
6,321

 
11
%
 
 
$
19,191

 
8
%


21
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)

 
 
Fixed Annuities Account Value
 
Fixed Index Annuities Account Value
 
 
(Unaudited)
 
 
(Dollars in millions)
CREDITED RATE (INCLUDING BONUS INTEREST) VS. ULTIMATE MINIMUM GUARANTEED RATE DIFFERENTIAL:
 
 
 
 
No differential
 
$
540

 
$
1,326

0.0% - 1.0%
 
206

 
1,344

1.0% - 2.0%
 
365

 
41

2.0% - 3.0%
 
2,463

 
6

Allocated to index strategies
 
—

 
12,900

 
 
$
3,574

 
$
15,617

    
FIXED INDEX ANNUITIES ACCOUNT VALUE - INDEX STRATEGIES

Monthly Average, Point to Point and Gain Trigger Strategies with Cap

 
 
Minimum Guaranteed Cap
 
 
(Unaudited)
 
 
1%
 
2%
 
3%
 
5%
 
6%
Current Cap
 
(Dollars in millions)
At minimum
 
$
—

 
$
—

 
$
1,661

 
$
566

 
$
4

 2-3%
 
1,138

 
—

 
—

 
—

 
—

 3-4%
 
1,148

 
—

 
295

 
—

 
—

 4-5%
 
420

 
—

 
225

 
—

 
—

 5-6%
 
240

 
3

 
27

 
1

 
—

 6-7%
 
108

 
4

 
30

 
—

 
3

 7% +
 
117

 
63

 
197

 
—

 
67

Total:
 
$
3,171

 
$
70

 
$
2,435

 
$
567

 
$
74

    








22
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)


Monthly Point-to-Point with Cap
 
 
Minimum Guaranteed Cap 1%
 
 
(Unaudited)
Current Cap
 
(Dollars in millions)
At minimum
 
$
2,236

 1% to 2%
 
2,557

 2% to 3%
 
595

 3% +
 
106

 Total:
 
$
5,494


3 Year Step Forward with Cap
 
 
Minimum Guaranteed Cap 2%
 
Minimum Guaranteed Cap 5%
 
 
(Unaudited)
Current Cap
 
(Dollars in millions)
At minimum
 
$
—

 
$
19

 2% to 5%
 
2

 
—

 5% to 7%
 
12

 
47

 7% to 9%
 
—

 
38

 9% to 11%
 
—

 
16

 11% to 13%
 
—

 
8

 Total:
 
$
14

 
$
128

There is an additional $947 million Account Value allocated to strategies not listed above. Of this $947 million, $13 million is at the guaranteed rates.












23
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)



Summary of Invested Assets by Asset Class

(Dollars in millions)
 
March 31, 2019
 
 
December 31, 2018
 
 
(Unaudited)
 
 
(Unaudited)
 
 
Amortized Cost
 
Fair Value
 
Percent
 
 
Amortized Cost
 
Fair Value
 
Percent
Fixed maturity securities, available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
    United States Government full faith and credit
 
$
56

 
$
56

 
—
%
 
 
$
120

 
$
119

 
—
%
    United States Government sponsored entities
 
104

 
104

 
—
%
 
 
107

 
106

 
—
%
    United States municipalities, states and territories
 
1,211

 
1,217

 
5
%
 
 
1,216

 
1,187

 
5
%
    Foreign Governments
 
138

 
138

 
1
%
 
 
129

 
121

 
1
%
Corporate securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
    Finance, insurance and real estate
 
4,090

 
4,003

 
16
%
 
 
4,307

 
4,088

 
17
%
    Manufacturing, construction and mining
 
646

 
619

 
3
%
 
 
632

 
574

 
2
%
    Utilities, energy and related sectors
 
2,375

 
2,322

 
9
%
 
 
2,527

 
2,306

 
10
%
    Wholesale/retail trade
 
1,518

 
1,431

 
6
%
 
 
1,520

 
1,376

 
6
%
    Services, media and other
 
2,257

 
2,215

 
9
%
 
 
2,227

 
2,035

 
9
%
Hybrid securities
 
988

 
961

 
4
%
 
 
992

 
901

 
4
%
Non-agency residential mortgage-backed securities
 
896

 
918

 
4
%
 
 
920

 
925

 
4
%
Commercial mortgage-backed securities
 
2,596

 
2,647

 
11
%
 
 
2,568

 
2,537

 
11
%
Asset-backed securities
 
1,542

 
1,556

 
6
%
 
 
1,542

 
1,549

 
6
%
CLO securities
 
3,491

 
3,418

 
14
%
 
 
3,411

 
3,283

 
14
%
Alternative investments
 
653

 
647

 
3
%
 
 
563

 
560

 
2
%
Equity securities
 
1,171

 
1,119

 
5
%
 
 
1,475

 
1,332

 
6
%
Commercial mortgage loans
479

 
485

 
2
%
 
 
482

 
483

 
2
%
Residential mortgage loans
 
195

 
199

 
1
%
 
 
185

 
187

 
1
%
Other (primarily derivatives and limited partnerships)
 
479

 
454

 
2
%
 
 
481

 
240

 
1
%
Short term investments
—

 
—

 
—
%
 
 
—

 
—

 
—
%
Total (a)
 
$
24,885

 
$
24,509

 
100
%
 
 
$
25,404

 
$
23,909

 
100
%
(a) Asset duration, including cash and cash equivalents, of 6.49 years and 6.57 years vs. liability duration of 6.43 years and 6.19 years for the periods ending March 31, 2019 and December 31, 2018, respectively.

24
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)


Credit Quality of Fixed Maturity Securities at March 31, 2019 (unaudited)
NAIC Designation
 
Fair Value
 
Percent
 
 
(Dollars in millions)
 
 
1
 
$
11,297

 
52
%
2
 
8,998

 
42
%
3
 
1,017

 
5
%
4
 
183

 
1
%
5
 
72

 
—
%
6
 
38

 
—
%
 
 
$
21,605

 
100
%


Rating Agency Rating
 
Fair Value
 
Percent
 
 
(Dollars in millions)
 
 
AAA
 
$
741

 
3
%
AA
 
1,476

 
7
%
A
 
5,599

 
26
%
BBB
 
8,242

 
38
%
Not rated
 
3,733

 
17
%
Total investment grade
 
19,791

 
91
%
BB
 
1,311

 
6
%
B and below
 
384

 
2
%
Not rated
 
119

 
1
%
Total below investment grade
 
1,814

 
9
%
 
 
$
21,605

 
100
%


25
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)

Summary of Residential Mortgage Backed Securities by Collateral Type and NAIC Designation

 
 
March 31, 2019
 
 
(Unaudited)
Collateral Type
 
Amortized Cost
 
Fair Value
 
(Dollars in millions)
Total by collateral type
 
 
 
 
Government agency
 
$
160

 
$
161

Prime
 
637

 
657

Subprime
 
99

 
100

Alt-A
 
104

 
104

 
 
$
1,000

 
$
1,022

Total by NAIC designation
 
 
 
 
1
 
$
974

 
$
997

2
 
12

 
12

3
 
10

 
9

4
 
3

 
3

5
 
1

 
1

 
 
$
1,000

 
$
1,022




26
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)

Top 10 Holdings by Issuers

(Dollars in millions)
 
March 31, 2019
 
 
(Unaudited)
Issuer (a):
 
Fair Value
 
Percentage of Total Invested Assets
AT&T Inc.
 
$
124

 
0.5
%
Enbridge Inc
 
119

 
0.5
%
HSBC Holdings
 
119

 
0.5
%
Metropolitan Transportation Authority (NY)
 
117

 
0.5
%
Goldman Sachs Group, Inc.
 
112

 
0.5
%
General Motors Co
 
111

 
0.5
%
United Mexican States
 
110

 
0.4
%
Energy Transfer Partners
 
109

 
0.4
%
HP Enterprise Co
 
106

 
0.4
%
Citigroup Inc.
 
106

 
0.4
%
(a) Issuers excluding U.S. Governmental securities.

27
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)

Reinsurance Counterparty Risk Top 5 Reinsurers


(Dollars in millions)
 
 
 
(Unaudited)

 
 
 
Financial Strength Rating
Parent Company/Principal Reinsurers
 
Reinsurance Recoverable (a)
 
AM Best
 
S&P
 
Moody's
Wilton Re
 
$
1,541

 
 A+
 
 Not Rated
 
Not Rated
Kubera Insurance (SAC) Ltd
 
681

 
Not Rated
 
Not Rated
 
Not Rated
Security Life of Denver
 
162

 
A
 
A
 
A2
Hannover Re
 
130

 
A+
 
AA-
 
Not Rated
London Life
 
108

 
A+
 
Not Rated
 
Not Rated
(a) Reinsurance recoverables do not include unearned ceded premiums that would be recovered in the event of early termination of certain traditional life policies.



28
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)

Shareholder Information

Corporate Offices:
FGL Holdings
Boundary Hall, Cricket Square, 4th Floor
Grand Cayman KY1-1102
Cayman Islands


Investor Contact:
Jon Bayer
Investors@fglife.com
(410) 487-8898



Common stock and Dividend Information:
NYSE symbol: "FG"

 
 
High
 
Low
 
Close
 
Dividend Declared
2019 (Unaudited)
 
 
 
 
 
 
 
 
First Quarter
 
$
8.80

 
$
6.57

 
$
7.87

 
$
0.01


Transfer Agent
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Phone: (212) 509-4000
http://www.continentalstock.com


29
FGL HOLDINGS
Financial Supplement - March 31, 2019
(unaudited)

Research Analyst Coverage

Daniel Bergman
Citi Research
(212) 816-2132
Daniel.bergman@citi.com

Andrew Kligerman
Credit Suisse
(212) 325-5069
andrew.kligerman@credit-suisse.com

Alex Scott
Goldman Sachs
(917) 343-7160
alex.scott@gs.com

Pablo Singzon
J.P. Morgan
(212) 622-2295
pablo.s.singzon@jpmorgan.com

Mark A. Dwelle
RBC Capital Markets
(804) 782-4008
mark.dwelle@rbccm.com

John Barnidge
Sandler O'Neill + Partners
(312) 281-3412
jbarnidge@sandleroneill.com
John Nadel
UBS Research
(212) 713-4299
john.nadel@ubs.com





30