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| /s/ Chinh E. Chu Chinh E. Chu Co-Executive Chairman | | | | | | /s/ William P. Foley, II William P. Foley, II Co-Executive Chairman | |
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| /s/ Chinh E. Chu Chinh E. Chu Co-Executive Chairman | | | | | | /s/ William P. Foley, II William P. Foley, II Co-Executive Chairman | |
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| | | | | F-1 | | | |
| | | | | A-1 | | | |
| | | | | B-1 | | | |
| | | | | C-1 | | | |
| | | | | D-1 | | |
| | | For the Three Months Ended March 31, 2017 | | | For the period from February 26, 2016 (inception) To December 31, 2016 | | ||||||
Statement of Operations Data: | | | | ||||||||||
General and administrative expenses | | | | $ | 406,411 | | | | | $ | 1,167,249 | | |
Loss from operations | | | | | (406,411) | | | | | | (1,167,249) | | |
Interest income | | | | | 465,131 | | | | | | 887,027 | | |
Net income (loss) | | | | $ | 58,720 | | | | | $ | (280,222) | | |
Weighted average shares outstanding(1) | | | | ||||||||||
Basic(2) | | | | | 19,933,292 | | | | | | 18,560,652 | | |
Diluted | | | | | 84,000,000 | | | | | | 18,560,652 | | |
Net earnings (loss) per share | | | | ||||||||||
Basic | | | | $ | 0.00 | | | | | $ | (0.02) | | |
Diluted | | | | $ | 0.00 | | | | | $ | (0.02) | | |
|
| | | As of March 31, 2017 | | | As of December 31, 2016 | | ||||||
| | | (unaudited) | | | ||||||||
Balance Sheet Data: | | | | ||||||||||
Assets | | | | ||||||||||
Current assets: | | | | ||||||||||
Cash and cash equivalents | | | | $ | 805,053 | | | | | $ | 1,016,157 | | |
Prepaid expenses | | | | | 94,954 | | | | | | 96,381 | | |
Total current assets | | | | | 900,007 | | | | | | 1,112,538 | | |
Investments and cash equivalents held in Trust Account | | | | | 691,352,158 | | | | | | 690,887,027 | | |
Total Assets | | | | $ | 692,252,165 | | | | | $ | 691,999,565 | | |
Liabilities and Shareholders’ Equity | | | | ||||||||||
Current liabilities: | | | | ||||||||||
Accounts payable and accrued expenses | | | | $ | 497,051 | | | | | $ | 491,765 | | |
Accounts payable – related party | | | | | 100,000 | | | | | | 70,000 | | |
Due to related parties | | | | | 225,733 | | | | | | 225,733 | | |
Total current liabilities | | | | | 822,784 | | | | | | 787,498 | | |
Accrued legal and printer costs | | | | | 1,154,228 | | | | | | 995,634 | | |
Deferred underwriting commissions and placement agent fees | | | | | 44,550,000 | | | | | | 44,550,000 | | |
Total Liabilities | | | | | 46,527,012 | | | | | | 46,333,132 | | |
Commitments | | | | ||||||||||
Class A ordinary shares subject to possible redemption, $0.0001 par value; 64,072,515 and 64,066,643 shares at redemption value at March 31, 2017 and December 31, 2016, respectively | | | | | 640,725,150 | | | | | | 640,666,430 | | |
Shareholders’ Equity: | | | | ||||||||||
Preferred shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding at March 31, 2017 and December 31, 2016 | | | | | — | | | | | | — | | |
Class A ordinary shares, $0.0001 par value; 400,000,000 shares authorized; 4,927,485 and 4,933,357 issued and outstanding (excluding 64,072,515 and 64,066,643 shares subject to possible redemption) at March 31, 2017 and December 31, 2016, respectively | | | | | 493 | | | | | | 493 | | |
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 15,000,000 shares issued and outstanding at March 31, 2017 and December 31, 2016 | | | | | 1,500 | | | | | | 1,500 | | |
Additional paid-in capital | | | | | 5,219,512 | | | | | | 5,278,232 | | |
Accumulated deficit | | | | | (221,502) | | | | | | (280,222) | | |
Total Shareholders’ Equity | | | | | 5,000,003 | | | | | | 5,000,003 | | |
Total Liabilities and Shareholders’ Equity | | | | $ | 692,252,165 | | | | | $ | 691,999,565 | | |
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| | | Six Months Ended March 31, | | | Year Ended September 30, | | ||||||||||||||||||||||||||||||||||||
(In millions, except share data) | | | 2017 | | | 2016 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | | | 2012 | | |||||||||||||||||||||
SUMMARY OF OPERATIONS | | | | | | | | | |||||||||||||||||||||||||||||||||||
Total operating revenues | | | | $ | 715 | | | | | $ | 562 | | | | | $ | 1,139 | | | | | $ | 961 | | | | | $ | 1,191 | | | | | $ | 1,347 | | | | | $ | 1,222 | | |
Total benefits and expenses | | | | | 505 | | | | | | 462 | | | | | | 964 | | | | | | 755 | | | | | | 979 | | | | | | 827 | | | | | | 1,062 | | |
Net income | | | | $ | 130 | | | | | $ | 57 | | | | | $ | 97 | | | | | $ | 118 | | | | | $ | 163 | | | | | $ | 348 | | | | | $ | 344 | | |
PER SHARE DATA(a) | | | | | | | | | |||||||||||||||||||||||||||||||||||
Net income per common share – basic | | | | $ | 2.23 | | | | | $ | 0.98 | | | | | $ | 1.67 | | | | | $ | 2.03 | | | | | $ | 2.91 | | | | | $ | 7.40 | | | | | $ | 7.32 | | |
Net income per common share – diluted | | | | | 2.23 | | | | | | 0.98 | | | | | | 1.66 | | | | | | 2.02 | | | | | | 2.90 | | | | | | 7.40 | | | | | | 7.32 | | |
Cash dividends declared per common share(b) | | | | | 0.13 | | | | | | 0.13 | | | | | | 0.26 | | | | | | 0.26 | | | | | | 1.11 | | | | | | 1.99 | | | | | | 0.85 | | |
Common shares outstanding | | | | | 58.99 | | | | | | 58.96 | | | | | | 59.0 | | | | | | 58.9 | | | | | | 58.4 | | | | | | 47.0 | | | | | | 47.0 | | |
BALANCE SHEET DATA | | | | | | | | | |||||||||||||||||||||||||||||||||||
Total investments | | | | $ | 21,813 | | | | | $ | 19,580 | | | | | $ | 21,025 | | | | | $ | 19,094 | | | | | $ | 18,802 | | | | | $ | 16,223 | | | | | $ | 16,557 | | |
Total assets | | | | | 27,897 | | | | | | 25,499 | | | | | | 27,035 | | | | | | 24,925 | | | | | | 24,153 | | | | | | 22,403 | | | | | | 20,990 | | |
Debt | | | | | 405 | | | | | | 300 | | | | | | 400 | | | | | | 300 | | | | | | 300 | | | | | | 300 | | | | | | — | | |
Total liabilities | | | | | 25,989 | | | | | | 23,988 | | | | | | 25,101 | | | | | | 23,423 | | | | | | 22,494 | | | | | | 21,264 | | | | | | 19,700 | | |
Total equity | | | | | 1,908 | | | | | | 1,511 | | | | | | 1,934 | | | | | | 1,502 | | | | | | 1,659 | | | | | | 1,139 | | | | | | 1,291 | | |
Book value per share | | | | $ | 32.34 | | | | | $ | 25.36 | | | | | $ | 32.80 | | | | | $ | 25.51 | | | | | $ | 28.39 | | | | | $ | 24.23 | | | | | $ | 27.46 | | |
| | Combined Pro Forma | | | Combined Pro Forma | | ||||||||||||||||||||
| | Assuming No Redemptions | | Assuming Maximum Redemptions | | | Assuming No Redemptions | | Assuming Maximum Redemptions | | ||||||||||||||||
| | (in millions, except share and per share data) | | | (in millions, except share and per share data) | | ||||||||||||||||||||
Selected Unaudited Pro Forma Condensed Combined Statement of Operations | | | | | ||||||||||||||||||||||
Three Months Ended March 31, 2017 | | | | | ||||||||||||||||||||||
Revenue | | | $ | 311 | | | | $ | 311 | | | | | $ | 311 | | | | $ | 311 | | | ||||
Net earnings per share – basic | | | $ | 0.30 | | | | $ | 0.31 | | | | | $ | 0.30 | | | | $ | 0.31 | | | ||||
Net earnings per share – diluted | | | $ | 0.28 | | | | $ | 0.28 | | | | | $ | 0.28 | | | | $ | 0.28 | | | ||||
Weighted average shares outstanding – basic | | | | 206,000,000 | | | | | 140,000,000 | | | | | | 206,000,000 | | | | | 140,000,000 | | | ||||
Weighted average shares outstanding – diluted | | | | 214,362,684 | | | | | 151,169,016 | | | | | | 214,362,356 | | | | | 151,168,579 | | | ||||
Selected Unaudited Pro Forma Combined Balance Sheet Data as of March 31, 2017 | | | | | ||||||||||||||||||||||
Total assets | | | $ | 28,071 | | | | $ | 27,877 | | | | | $ | 28,071 | | | | $ | 27,877 | | | ||||
Total liabilities | | | $ | 26,000 | | | | $ | 26,008 | | | | | $ | 26,000 | | | | $ | 26,008 | | | ||||
Total preferred shares | | | $ | 367 | | | | $ | 818 | | | | | $ | 367 | | | | $ | 818 | | | ||||
Total equity | | | $ | 1,704 | | | | $ | 1,051 | | | | | $ | 1,704 | | | | $ | 1,051 | | | ||||
Selected Unaudited Pro Forma Condensed Combined Statement of Operations | | | | | ||||||||||||||||||||||
Year Ended December 31, 2016 | | | | | ||||||||||||||||||||||
Revenue | | | $ | 1,295 | | | | $ | 1,295 | | | | | $ | 1,295 | | | | $ | 1,295 | | | ||||
Net earnings (loss) per share – basic | | | $ | 0.12 | | | | $ | (0.33) | | | | | $ | 0.12 | | | | $ | (0.33) | | | ||||
Net earnings (loss) per share – diluted | | | $ | 0.11 | | | | $ | (0.33) | | | | | $ | 0.11 | | | | $ | (0.33) | | | ||||
Weighted average shares outstanding – basic | | | | 206,000,000 | | | | | 140,000,000 | | | | | | 206,000,000 | | | | | 140,000,000 | | | ||||
Weighted average shares outstanding – diluted | | | | 214,362,684 | | | | | 151,169,016 | | | | | | 214,362,356 | | | | | 151,168,579 | | |
| | | For the Year Ended December 31, 2016 | | |||||||||||||||||||||||||||||||||
Reconciliation from historical net income to pro forma AOI | | | CF Corp. (Historical as of December 31, 2016) | | | FGL (Historical as of September 30, 2016) | | | FSR (Historical as of September 30, 2016) | | | Combined (Historical) | | | Pro Forma Adjustments (Assuming No Redemption) | | | Combined Pro Forma (Assuming No Redemption) | | ||||||||||||||||||
| | | (in millions) | | |||||||||||||||||||||||||||||||||
Net income | | | | $ | — | | | | | $ | 97 | | | | | $ | (19) | | | | | $ | 78 | | | | | $ | (25)(a) | | | | | $ | 53 | | |
Adjustments to arrive at pro forma AOI: | | | | | | | | ||||||||||||||||||||||||||||||
Effect of investment losses (gains), net of offsets | | | | | — | | | | | | 9 | | | | | | — | | | | | | 9 | | | | | | 1(b) | | | | | | 10 | | |
Effect of change in FIA embedded derivative discount rate, net of offsets | | | | | — | | | | | | 54 | | | | | | — | | | | | | 54 | | | | | | (24)(c) | | | | | | 30 | | |
Effect of change in fair value of reinsurance related embedded derivative, net of offsets | | | | | — | | | | | | 37 | | | | | | — | | | | | | 37 | | | | | | (37)(d) | | | | | | — | | |
Effect of class action litigation reserves, net of offsets | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Tax impact of adjusting items | | | | | — | | | | | | (35) | | | | | | — | | | | | | (35) | | | | | | 21(e) | | | | | | (14) | | |
Pro forma AOI | | | | $ | — | | | | | $ | 162 | | | | | $ | (19) | | | | | $ | 143 | | | | | $ | (64) | | | | | $ | 79 | | |
|
| | | For the Three Months Ended March 31, 2017 | | |||||||||||||||||||||||||||||||||
Reconciliation from historical net income to pro forma AOI | | | CF Corp. (Historical as of March 31, 2017) | | | FGL (Historical as of December 31, 2016) | | | FSR (Historical as of December 31, 2016) | | | Combined (Historical) | | | Pro Forma Adjustments (Assuming No Redemption) | | | Combined Pro Forma (Assuming No Redemption) | | ||||||||||||||||||
| | | (in millions) | | |||||||||||||||||||||||||||||||||
Net income | | | | $ | — | | | | | $ | 108 | | | | | $ | (15) | | | | | $ | 93 | | | | | $ | (25)(a) | | | | | $ | 68 | | |
Adjustments to arrive at pro forma AOI: | | | | | | | | ||||||||||||||||||||||||||||||
Effect of investment losses (gains), net of offsets | | | | | — | | | | | | (1) | | | | | | — | | | | | | (1) | | | | | | 1(b) | | | | | | — | | |
Effect of change in FIA embedded derivative discount rate, net of offsets | | | | | — | | | | | | (92) | | | | | | — | | | | | | (92) | | | | | | 40(c) | | | | | | (52) | | |
Effect of change in fair value of reinsurance related embedded derivative, net of offsets | | | | | — | | | | | | (10) | | | | | | — | | | | | | (10) | | | | | | 10(d) | | | | | | — | | |
Effect of class action litigation reserves, net of offsets | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Tax impact of adjusting items | | | | | — | | | | | | 36 | | | | | | — | | | | | | 36 | | | | | | (18)(e) | | | | | | 18 | | |
Pro forma AOI | | | | $ | — | | | | | $ | 41 | | | | | $ | (15) | | | | | $ | 26 | | | | | $ | 8 | | | | | $ | 34 | | |
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| | | As of March 31, 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | As of March 31, 2017 | | | | | | | | | As of March 31, 2017 | | | |||||||||||||||||||||||
| | | CF Corp. (Historical) | | | FGL (Historical) | | | FSR (Historical) | | | Combined | | | Purchase Accounting Adjustments | | | Intercompany Eliminations(c) | | | Pro Forma Adjustments (Assuming No Redemption) | | | Combined Pro Forma (Assuming No Redemption) | | | Additional Pro Forma Adjustments (Assuming Maximum Redemption) | | | Combined Pro Forma (Assuming Maximum Redemption) | | | ||||||||||||||||||||||||||||||||
| | | (in millions) | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments: | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed maturity securities, available-for-sale, at fair value | | | | $ | — | | | | | $ | 20,052 | | | | | $ | — | | | | | $ | 20,052 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 20,052 | | | | | $ | — | | | | | $ | 20,052 | | | | ||
Equity securities, available-for-sale, at fair value | | | | | — | | | | | | 712 | | | | | | — | | | | | | 712 | | | | | | — | | | | | | — | | | | | | — | | | | | | 712 | | | | | | — | | | | | | 712 | | | | ||
Derivative investments | | | | | — | | | | | | 351 | | | | | | — | | | | | | 351 | | | | | | — | | | | | | — | | | | | | — | | | | | | 351 | | | | | | — | | | | | | 351 | | | | ||
Commercial mortgage loans | | | | | — | | | | | | 579 | | | | | | — | | | | | | 579 | | | | | | (3)(b) | | | | | | — | | | | | | — | | | | | | 576 | | | | | | — | | | | | | 576 | | | | ||
Other invested assets | | | | | — | | | | | | 119 | | | | | | — | | | | | | 119 | | | | | | (4)(b) | | | | | | — | | | | | | — | | | | | | 115 | | | | | | — | | | | | | 115 | | | | ||
Related party investments | | | | | — | | | | | | — | | | | | | 95 | | | | | | 95 | | | | | | — | | | | | | (3) | | | | | | — | | | | | | 92 | | | | | | — | | | | | | 92 | | | | ||
Total investments | | | | | — | | | | | | 21,813 | | | | | | 95 | | | | | | 21,908 | | | | | | (7) | | | | | | (3) | | | | | | — | | | | | | 21,898 | | | | | | — | | | | | | 21,898 | | | | ||
Related party loans | | | | | — | | | | | | 71 | | | | | | — | | | | | | 71 | | | | | | — | | | | | | (71) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Funds withheld receivable | | | | | — | | | | | | — | | | | | | 1,626 | | | | | | 1,626 | | | | | | — | | | | | | (930) | | | | | | — | | | | | | 696 | | | | | | — | | | | | | 696 | | | | ||
Cash and cash equivalents | | | | | 1 | | | | | | 887 | | | | | | 25 | | | | | | 913 | | | | | | (1,903)(a) | | | | | | — | | | | | | 691(f) | | | | | | 1,081 | | | | | | (460)(n) | | | | | | 887 | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (2)(g) | | | | | | | | | | | | 458(o) | | | | | |||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (7)(h) | | | | | | | | | | | | (200)(q) | | | | | |||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 367(i) | | | | | | | | | | | | 8(r) | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 510(j) | | | | | | | | | | | | | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 334(k) | | | | | | | | | | | | | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (45)(l) | | | | | | | | | | | | | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (20)(m) | | | | | | | | | | | | | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 200(p) | | | | | | | | | | | | | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 43(r) | | | | | | | | | | | | | | | | | | | | | | ||
Prepaid expenses | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Accrued investment income | | | | | — | | | | | | 225 | | | | | | — | | | | | | 225 | | | | | | — | | | | | | — | | | | | | — | | | | | | 225 | | | | | | — | | | | | | 225 | | | | ||
Reinsurance recoverable | | | | | — | | | | | | 3,426 | | | | | | — | | | | | | 3,426 | | | | | | (63)(b) | | | | | | (1,004) | | | | | | — | | | | | | 2,359 | | | | | | — | | | | | | 2,359 | | | | ||
Intangibles, net | | | | | — | | | | | | 1,184 | | | | | | — | | | | | | 1,184 | | | | | | 402(b) | | | | | | — | | | | | | — | | | | | | 1,586 | | | | | | — | | | | | | 1,586 | | | | ||
Deferred tax assets | | | | | — | | | | | | 87 | | | | | | — | | | | | | 87 | | | | | | (51)(d) | | | | | | — | | | | | | — | | | | | | 36 | | | | | | — | | | | | | 36 | | | | ||
Goodwill | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 79(b) | | | | | | — | | | | | | — | | | | | | 79 | | | | | | — | | | | | | 79 | | | | ||
Income taxes receivable | | | | | — | | | | | | — | | | | | | 8 | | | | | | 8 | | | | | | — | | | | | | — | | | | | | — | | | | | | 8 | | | | | | — | | | | | | 8 | | | | ||
Investments and cash equivalents held in Trust Account | | | | | 691 | | | | | | — | | | | | | — | | | | | | 691 | | | | | | — | | | | | | — | | | | | | (691)(f) | | | | | | — | | | | | | — | | | | | | — | | | | ||
Other assets | | | | | — | | | | | | 204 | | | | | | 23 | | | | | | 227 | | | | | | (5)(b) | | | | | | (119) | | | | | | — | | | | | | 103 | | | | | | — | | | | | | 103 | | | | ||
Total assets | | | | $ | 692 | | | | | $ | 27,897 | | | | | $ | 1,777 | | | | | $ | 30,366 | | | | | $ | (1,548) | | | | | $ | (2,127) | | | | | $ | 1,380 | | | | | $ | 28,071 | | | | | $ | (194) | | | | | $ | 27,877 | | | | ||
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| | As of March 31, 2017 | | | | | | | | | | | | | | | | | | | | | | As of March 31, 2017 | | | | | | | As of March 31, 2017 | | | | As of March 31, 2017 | | | | | | | | | | | | | | | | | | | | | | As of March 31, 2017 | | | | | | | As of March 31, 2017 | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | CF Corp (Historical) | | FGL (Historical) | | FSR (Historical) | | Combined | | Purchase Accounting Adjustments | | Intercompany Eliminations(c) | | Pro Forma Adjustments (Assuming No Redemption) | | Combined Pro Forma (Assuming No Redemption) | | Additional Pro Forma Adjustments (Assuming Maximum Redemption) | | Combined Pro Forma (Assuming Maximum Redemption) | | | | CF Corp. (Historical) | | FGL (Historical) | | FSR (Historical) | | Combined | | Purchase Accounting Adjustments | | Intercompany Eliminations(c) | | Pro Forma Adjustments (Assuming No Redemption) | | Combined Pro Forma (Assuming No Redemption) | | Additional Pro Forma Adjustments (Assuming Maximum Redemption) | | Combined Pro Forma (Assuming Maximum Redemption) | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | (in millions) | | | (in millions) | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities and shareholders’ equity | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts payable and accrued expenses | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | ||||||||||||||||||||||||
Accounts payable – related party | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | ||||||||||||||||||||||||
Due to related parties | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | ||||||||||||||||||||||||
Accrued legal and printer costs | | | | 1 | | | | | — | | | | | — | | | | | 1 | | | | | — | | | | | — | | | | | — | | | | | 1 | | | | | — | | | | | 1 | | | | | | | 1 | | | | | — | | | | | — | | | | | 1 | | | | | — | | | | | — | | | | | — | | | | | 1 | | | | | — | | | | | 1 | | | | ||||||||||||||||||||||||
Deferred underwriting commissions and placement agent fees | | | | 45 | | | | | — | | | | | — | | | | | 45 | | | | | — | | | | | — | | | | | (45)(l) | | | | | — | | | | | — | | | | | — | | | | | | | 45 | | | | | — | | | | | — | | | | | 45 | | | | | — | | | | | — | | | | | (45)(l) | | | | | — | | | | | �� | | | | | — | | | | ||||||||||||||||||||||||
Contractholder funds | | | | — | | | | | 20,052 | | | | | — | | | | | 20,052 | | | | | 448(b) | | | | | — | | | | | — | | | | | 20,500 | | | | | — | | | | | 20,500 | | | | | | | — | | | | | 20,052 | | | | | — | | | | | 20,052 | | | | | 448(b) | | | | | — | | | | | — | | | | | 20,500 | | | | | — | | | | | 20,500 | | | | ||||||||||||||||||||||||
Future policy benefits | | | | — | | | | | 3,435 | | | | | — | | | | | 3,435 | | | | | — | | | | | — | | | | | — | | | | | 3,435 | | | | | — | | | | | 3,435 | | | | | | | — | | | | | 3,435 | | | | | — | | | | | 3,435 | | | | | — | | | | | — | | | | | — | | | | | 3,435 | | | | | — | | | | | 3,435 | | | | ||||||||||||||||||||||||
Funds witheld for reinsurance liabilities | | | | — | | | | | 1,134 | | | | | — | | | | | 1,134 | | | | | — | | | | | (1,123) | | | | | — | | | | | 11 | | | | | — | | | | | 11 | | | | | | | — | | | | | 1,134 | | | | | — | | | | | 1,134 | | | | | — | | | | | (1,123) | | | | | — | | | | | 11 | | | | | — | | | | | 11 | | | | ||||||||||||||||||||||||
Liability for policy and contract claims | | | | — | | | | | 60 | | | | | — | | | | | 60 | | | | | — | | | | | — | | | | | — | | | | | 60 | | | | | — | | | | | 60 | | | | | | | — | | | | | 60 | | | | | — | | | | | 60 | | | | | — | | | | | — | | | | | — | | | | | 60 | | | | | — | | | | | 60 | | | | ||||||||||||||||||||||||
Insurance reserves | | | | — | | | | | — | | | | | 1,665 | | | | | 1,665 | | | | | — | | | | | (1,004) | | | | | — | | | | | 661 | | | | | — | | | | | 661 | | | | | | | — | | | | | — | | | | | 1,665 | | | | | 1,665 | | | | | — | | | | | (1,004) | | | | | — | | | | | 661 | | | | | — | | | | | 661 | | | | ||||||||||||||||||||||||
Debt | | | | — | | | | | 300 | | | | | — | | | | | 300 | | | | | 1(b) | | | | | — | | | | | — | | | | | 301 | | | | | — | | | | | 301 | | | | | | | — | | | | | 300 | | | | | — | | | | | 300 | | | | | 1(b) | | | | | — | | | | | — | | | | | 301 | | | | | — | | | | | 301 | | | | ||||||||||||||||||||||||
Revolving credit facility | | | | — | | | | | 105 | | | | | — | | | | | 105 | | | | | — | | | | | — | | | | | 43(r) | | | | | 148 | | | | | 8(r) | | | | | 156 | | | | | | | — | | | | | 105 | | | | | — | | | | | 105 | | | | | — | | | | | — | | | | | 43(r) | | | | | 148 | | | | | 8(r) | | | | | 156 | | | | ||||||||||||||||||||||||
Other liabilities | | | | — | | | | | 903 | | | | | 11 | | | | | 914 | | | | | (24)(b) | | | | | — | | | | | (7)(h) | | | | | 883 | | | | | — | | | | | 883 | | | | | | | — | | | | | 903 | | | | | 11 | | | | | 914 | | | | | (24)(b) | | | | | — | | | | | (7)(h) | | | | | 883 | | | | | — | | | | | 883 | | | | ||||||||||||||||||||||||
Total liabilities | | | | 46 | | | | | 25,989 | | | | | 1,676 | | | | | 27,711 | | | | | 425 | | | | | (2,127) | | | | | (9) | | | | | 26,000 | | | | | 8 | | | | | 26,008 | | | | | | | 46 | | | | | 25,989 | | | | | 1,676 | | | | | 27,711 | | | | | 425 | | | | | (2,127) | | | | | (9) | | | | | 26,000 | | | | | 8 | | | | | 26,008 | | | | ||||||||||||||||||||||||
Mezzanine equity | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred shares | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 367(i) | | | | | 367 | | | | | 451(o) | | | | | 818 | | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 367(i) | | | | | 367 | | | | | 451(o) | | | | | 818 | | | | ||||||||||||||||||||||||
Commitments | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A ordinary shares subject to possible redemption, | | | | 641 | | | | | — | | | | | — | | | | | 641 | | | | | — | | | | | — | | | | | (641)(f) | | | | | — | | | | | — | | | | | — | | | | | | | 641 | | | | | — | | | | | — | | | | | 641 | | | | | — | | | | | — | | | | | (641)(f) | | | | | — | | | | | — | | | | | — | | | | ||||||||||||||||||||||||
Shareholders’ equity | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred shares | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | ||||||||||||||||||||||||
Common stock | | | | — | | | | | 1 | | | | | — | | | | | 1 | | | | | (1)(e) | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | — | | | | | 1 | | | | | — | | | | | 1 | | | | | (1)(e) | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | ||||||||||||||||||||||||
Class A ordinary shares | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | ||||||||||||||||||||||||
Class B ordinary shares | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | ||||||||||||||||||||||||
Additional paid in capital | | | | 5 | | | | | 715 | | | | | 178 | | | | | 898 | | | | | (893)(e) | | | | | — | | | | | 641(f) | | | | | 1,690 | | | | | (439)(n) | | | | | 1,051 | | | | | | | 5 | | | | | 715 | | | | | 178 | | | | | 898 | | | | | (893)(e) | | | | | — | | | | | 641(f) | | | | | 1,690 | | | | | (439)(n) | | | | | 1,051 | | | | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 510(j) | | | | | | | | | | (200)(q) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 510(j) | | | | | | | | | | (200)(q) | | | | | | | | | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 334(k) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 334(k) | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 200(p) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 200(p) | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||
Retained earnings (accumulated deficit) | | | | — | | | | | 914 | | | | | (77) | | | | | 837 | | | | | 36(b) | | | | | — | | | | | (2)(g) | | | | | 14 | | | | | (21)(n) | | | | | — | | | | | | | — | | | | | 914 | | | | | (77) | | | | | 837 | | | | | 36(b) | | | | | — | | | | | (2)(g) | | | | | 14 | | | | | (21)(n) | | | | | — | | | | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | (837)(e) | | | | | | | | | | (20) (m) | | | | | | | | | | 7(o) | | | | | | | | | | | | | | | | | | | | | | | | | | | | (837)(e) | | | | | | | | | | (20) (m) | | | | | | | | | | 7(o) | | | | | ||||||||||||||||||||||||||||||||
Accumulated other comprehensive income | | | | — | | | | | 291 | | | | | — | | | | | 291 | | | | | (291)(e) | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | — | | | | | 291 | | | | | — | | | | | 291 | | | | | (291)(e) | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | ||||||||||||||||||||||||
Treasury stock | | | | — | | | | | (13) | | | | | — | | | | | (13) | | | | | 13(e) | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | — | | | | | (13) | | | | | — | | | | | (13) | | | | | 13(e) | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | ||||||||||||||||||||||||
Total shareholders’ equity | | | | 5 | | | | | 1,908 | | | | | 101 | | | | | 2,014 | | | | | (1,973) | | | | | — | | | | | 1,663 | | | | | 1,704 | | | | | (653) | | | | | 1,051 | | | | | | | 5 | | | | | 1,908 | | | | | 101 | | | | | 2,014 | | | | | (1,973) | | | | | — | | | | | 1,663 | | | | | 1,704 | | | | | (653) | | | | | 1,051 | | | | ||||||||||||||||||||||||
Total liabilities, mezzanine equity and shareholders’ equity | | | $ | 692 | | | | $ | 27,897 | | | | $ | 1,777 | | | | $ | 30,366 | | | | $ | (1,548) | | | | $ | (2,127) | | | | $ | 1,380 | | | | $ | 28,071 | | | | $ | (194) | | | | $ | 27,877 | | | | | | $ | 692 | | | | $ | 27,897 | | | | $ | 1,777 | | | | $ | 30,366 | | | | $ | (1,548) | | | | $ | (2,127) | | | | $ | 1,380 | | | | $ | 28,071 | | | | $ | (194) | | | | $ | 27,877 | | | | |
| | For the period from February 26, 2016 (Inception) to December 31, 2016 | | For the Year Ended September 30, 2016 | | | | | | | | | | | | | | | | | | | | | | For the Year Ended December 31, 2016 | | | | | | | For the Year Ended December 31, 2016 | | | For the period from February 26, 2016 (Inception) to December 31, 2016 | | For the Year Ended September 30, 2016 | | | | | | | | | | | | | | | | | | | | | | For the Year Ended December 31, 2016 | | | | | | | For the Year Ended December 31, 2016 | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | CF Corp. (Historical) | | FGL (Historical) | | FSR (Historical) | | Combined | | Purchase Accounting Adjustments | | Intercompany Eliminations(dd) | | Pro Forma Adjustments (Assuming No Redemption) | | Combined Pro Forma (Assuming No Redemption) | | Additional Pro Forma Adjustments (Assuming Maximum Redemption) | | Combined Pro Forma (Assuming Maximum Redemption) | | | CF Corp. (Historical) | | FGL (Historical) | | FSR (Historical) | | Combined | | Purchase Accounting Adjustments | | Intercompany Eliminations(dd) | | Pro Forma Adjustments (Assuming No Redemption) | | Combined Pro Forma (Assuming No Redemption) | | Additional Pro Forma Adjustments (Assuming Maximum Redemption) | | Combined Pro Forma (Assuming Maximum Redemption) | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | (in millions, except share and per share data) | | | (in millions, except share and per share data) | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues: | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premiums | | | $ | — | | | | $ | 70 | | | | $ | — | | | | $ | 70 | | | | $ | — | | | | $ | 3 | | | | $ | — | | | | $ | 73 | | | | $ | — | | | | $ | 73 | | | | | $ | — | | | | $ | 70 | | | | $ | — | | | | $ | 70 | | | | $ | — | | | | $ | 3 | | | | $ | — | | | | $ | 73 | | | | $ | — | | | | $ | 73 | | | ||||||||||||||||||||
Net investment income | | | | — | | | | | 923 | | | | | 2 | | | | | 925 | | | | | (13)(ee) | | | | | 61 | | | | | — | | | | | 973 | | | | | — | | | | | 973 | | | | | | — | | | | | 923 | | | | | 2 | | | | | 925 | | | | | (13)(ee) | | | | | 61 | | | | | — | | | | | 973 | | | | | — | | | | | 973 | | | ||||||||||||||||||||
Net investment gains | | | | — | | | | | 19 | | | | | 148 | | | | | 167 | | | | | — | | | | | (57) | | | | | — | | | | | 110 | | | | | — | | | | | 110 | | | | | | — | | | | | 19 | | | | | 148 | | | | | 167 | | | | | — | | | | | (57) | | | | | — | | | | | 110 | | | | | — | | | | | 110 | | | ||||||||||||||||||||
Insurance and investment product fees and other | | | | — | | | | | 127 | | | | | — | | | | | 127 | | | | | — | | | | | 3 | | | | | 9(ff) | | | | | 139 | | | | | — | | | | | 139 | | | | | | — | | | | | 127 | | | | | — | | | | | 127 | | | | | — | | | | | 3 | | | | | 9(ff) | | | | | 139 | | | | | — | | | | | 139 | | | ||||||||||||||||||||
Total revenues | | | | — | | | | | 1,139 | | | | | 150 | | | | | 1,289 | | | | | (13) | | | | | 10 | | | | | 9 | | | | | 1,295 | | | | | — | | | | | 1,295 | | | | | | — | | | | | 1,139 | | | | | 150 | | | | | 1,289 | | | | | (13) | | | | | 10 | | | | | 9 | | | | | 1,295 | | | | | — | | | | | 1,295 | | | ||||||||||||||||||||
Benefits and expenses: | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves | | | | — | | | | | 791 | | | | | 153 | | | | | 944 | | | | | (46)(gg) | | | | | (50) | | | | | — | | | | | 848 | | | | | — | | | | | 848 | | | | | | — | | | | | 791 | | | | | 153 | | | | | 944 | | | | | (46)(gg) | | | | | (50) | | | | | — | | | | | 848 | | | | | — | | | | | 848 | | | ||||||||||||||||||||
Acquisition and operating expenses, net of deferrals | | | | 1 | | | | | 119 | | | | | 10 | | | | | 130 | | | | | (2)(bb) | | | | | — | | | | | 65(ff) | | | | | 193 | | | | | — | | | | | 193 | | | | | | 1 | | | | | 119 | | | | | 10 | | | | | 130 | | | | | (2)(bb) | | | | | — | | | | | 65(ff) | | | | | 193 | | | | | — | | | | | 193 | | | ||||||||||||||||||||
Amortization of intangibles | | | | — | | | | | 54 | | | | | — | | | | | 54 | | | | | 76(aa) | | | | | — | | | | | — | | | | | 130 | | | | | — | | | | | 130 | | | | | | — | | | | | 54 | | | | | — | | | | | 54 | | | | | 76(aa) | | | | | — | | | | | — | | | | | 130 | | | | | — | | | | | 130 | | | ||||||||||||||||||||
Total benefits and expenses | | | | 1 | | | | | 964 | | | | | 163 | | | | | 1,128 | | | | | 28 | | | | | (50) | | | | | 65 | | | | | 1,171 | | | | | — | | | | | 1,171 | | | | | | 1 | | | | | 964 | | | | | 163 | | | | | 1,128 | | | | | 28 | | | | | (50) | | | | | 65 | | | | | 1,171 | | | | | — | | | | | 1,171 | | | ||||||||||||||||||||
Income (loss) from operations | | | | (1) | | | | | 175 | | | | | (13) | | | | | 161 | | | | | (41) | | | | | 60 | | | | | (56) | | | | | 124 | | | | | — | | | | | 124 | | | | | | (1) | | | | | 175 | | | | | (13) | | | | | 161 | | | | | (41) | | | | | 60 | | | | | (56) | | | | | 124 | | | | | — | | | | | 124 | | | ||||||||||||||||||||
Interest income | | | | 1 | | | | | — | | | | | — | | | | | 1 | | | | | — | | | | | — | | | | | — | | | | | 1 | | | | | — | | | | | 1 | | | | | | 1 | | | | | — | | | | | — | | | | | 1 | | | | | — | | | | | — | | | | | — | | | | | 1 | | | | | — | | | | | 1 | | | ||||||||||||||||||||
Interest expense | | | | — | | | | | (22) | | | | | — | | | | | (22) | | | | | — | | | | | — | | | | | (2)(hh) | | | | | (24) | | | | | — | | | | | (24) | | | | | | — | | | | | (22) | | | | | — | | | | | (22) | | | | | — | | | | | — | | | | | (2)(hh) | | | | | (24) | | | | | — | | | | | (24) | | | ||||||||||||||||||||
Income (loss) before income taxes | | | | — | | | | | 153 | | | | | (13) | | | | | 140 | | | | | (41) | | | | | 60 | | | | | (58) | | | | | 101 | | | | | — | | | | | 101 | | | | | | — | | | | | 153 | | | | | (13) | | | | | 140 | | | | | (41) | | | | | 60 | | | | | (58) | | | | | 101 | | | | | — | | | | | 101 | | | ||||||||||||||||||||
Income tax (benefit) expense | | | | — | | | | | 56 | | | | | 6 | | | | | 62 | | | | | (14)(cc) | | | | | 21 | | | | | (21)(cc) | | | | | 48 | | | | | — | | | | | 48 | | | | | | — | | | | | 56 | | | | | 6 | | | | | 62 | | | | | (14)(cc) | | | | | 21 | | | | | (21)(cc) | | | | | 48 | | | | | — | | | | | 48 | | | ||||||||||||||||||||
Net income (loss) | | | $ | — | | | | $ | 97 | | | | $ | (19) | | | | $ | 78 | | | | $ | (27) | | | | $ | 39 | | | | $ | (37) | | | | $ | 53 | | | | $ | — | | | | $ | 53 | | | | | $ | — | | | | $ | 97 | | | | $ | (19) | | | | $ | 78 | | | | $ | (27) | | | | $ | 39 | | | | $ | (37) | | | | $ | 53 | | | | $ | — | | | | $ | 53 | | | ||||||||||||||||||||
Weighted average shares outstanding | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic | | | | 18,560,652 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (4) | | | | | 206,000,000 | | | | | (4) | | | | | 140,000,000 | | | | | | 18,560,652 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (4) | | | | | 206,000,000 | | | | | (4) | | | | | 140,000,000 | | | ||||||||||||||||||||
Diluted | | | | 18,560,652 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (4) | | | | | 214,362,684 | | | | | (4) | | | | | 151,169,016 | | | | | | 18,560,652 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (4) | | | | | 214,362,356 | | | | | (4) | | | | | 151,168,579 | | | ||||||||||||||||||||
Net earnings per share | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic | | | $ | (0.02) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 0.12 | | | | | | | | | $ | (0.33) | | | | | $ | (0.02) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 0.12 | | | | | | | | | $ | (0.33) | | | ||||||||||||||||||||
Diluted | | | $ | (0.02) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 0.12 | | | | | | | | | $ | (0.33) | | | | | $ | (0.02) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 0.11 | | | | | | | | | $ | (0.33) | | |
| | For the Three Months Ended March 31, 2017 | | For the Three Months Ended December 31, 2016 | | | | | | | | | | | | | | | | | | | | | | For the Three Months Ended March 31, 2017 | | | | | | | For the Three Months Ended March 31, 2017 | | | For the Three Months Ended March 31, 2017 | | For the Three Months Ended December 31, 2016 | | | | | | | | | | | | | | | | | | | | | | For the Three Months Ended March 31, 2017 | | | | | | | For the Three Months Ended March 31, 2017 | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | CF Corp. (Historical) | | FGL (Historical) | | FSR (Historical) | | Combined | | Purchase Accounting Adjustments | | Intercompany Eliminations(dd) | | Pro Forma Adjustments (Assuming No Redemption) | | Combined Pro Forma (Assuming No Redemption) | | Additional Pro Forma Adjustments (Assuming Maximum Redemption) | | Combined Pro Forma (Assuming Maximum Redemption) | | | CF Corp. (Historical) | | FGL (Historical) | | FSR (Historical) | | Combined | | Purchase Accounting Adjustments | | Intercompany Eliminations(dd) | | Pro Forma Adjustments (Assuming No Redemption) | | Combined Pro Forma (Assuming No Redemption) | | Additional Pro Forma Adjustments (Assuming Maximum Redemption) | | Combined Pro Forma (Assuming Maximum Redemption) | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | (in millions, except share and per share data) | | | (in millions, except share and per share data) | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues: | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premiums | | | $ | — | | | | $ | 11 | | | | $ | — | | | | $ | 11 | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | 11 | | | | $ | — | | | | $ | 11 | | | | | $ | — | | | | $ | 11 | | | | $ | — | | | | $ | 11 | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | 11 | | | | $ | — | | | | $ | 11 | | | ||||||||||||||||||||
Net investment income | | | | — | | | | | 240 | | | | | — | | | | | 240 | | | | | (3)(ee) | | | | | 11 | | | | | — | | | | | 248 | | | | | — | | | | | 248 | | | | | | — | | | | | 240 | | | | | — | | | | | 240 | | | | | (3)(ee) | | | | | 11 | | | | | — | | | | | 248 | | | | | — | | | | | 248 | | | ||||||||||||||||||||
Net investment gains | | | | — | | | | | 51 | | | | | (29) | | | | | 22 | | | | | — | | | | | (11) | | | | | — | | | | | 11 | | | | | — | | | | | 11 | | | | | | — | | | | | 51 | | | | | (29) | | | | | 22 | | | | | — | | | | | (11) | | | | | — | | | | | 11 | | | | | — | | | | | 11 | | | ||||||||||||||||||||
Insurance and investment product fees and other | | | | — | | | | | 38 | | | | | — | | | | | 38 | | | | | — | | | | | 1 | | | | | 2(ff) | | | | | 41 | | | | | — | | | | | 41 | | | | | | — | | | | | 38 | | | | | — | | | | | 38 | | | | | — | | | | | 1 | | | | | 2(ff) | | | | | 41 | | | | | — | | | | | 41 | | | ||||||||||||||||||||
Total revenues | | | | — | | | | | 340 | | | | | (29) | | | | | 311 | | | | | (3) | | | | | 1 | | | | | 2 | | | | | 311 | | | | | — | | | | | 311 | | | | | | — | | | | | 340 | | | | | (29) | | | | | 311 | | | | | (3) | | | | | 1 | | | | | 2 | | | | | 311 | | | | | — | | | | | 311 | | | ||||||||||||||||||||
Benefits and expenses: | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves | | | | — | | | | | 20 | | | | | (16) | | | | | 4 | | | | | (5)(gg) | | | | | 4 | | | | | — | | | | | 3 | | | | | — | | | | | 3 | | | | | | — | | | | | 20 | | | | | (16) | | | | | 4 | | | | | (5)(gg) | | | | | 4 | | | | | — | | | | | 3 | | | | | — | | | | | 3 | | | ||||||||||||||||||||
Acquisition and operating expenses, net of deferrals | | | | — | | | | | 28 | | | | | 2 | | | | | 30 | | | | | (1)(bb) | | | | | — | | | | | 16(ff) | | | | | 45 | | | | | — | | | | | 45 | | | | | | — | | | | | 28 | | | | | 2 | | | | | 30 | | | | | (1)(bb) | | | | | — | | | | | 16(ff) | | | | | 45 | | | | | — | | | | | 45 | | | ||||||||||||||||||||
Amortization of intangibles | | | | — | | | | | 123 | | | | | — | | | | | 123 | | | | | 24(aa) | | | | | — | | | | | — | | | | | 147 | | | | | — | | | | | 147 | | | | | | — | | | | | 123 | | | | | — | | | | | 123 | | | | | 24(aa) | | | | | — | | | | | — | | | | | 147 | | | | | — | | | | | 147 | | | ||||||||||||||||||||
Total benefits and expenses | | | | — | | | | | 171 | | | | | (14) | | | | | 157 | | | | | 18 | | | | | 4 | | | | | 16 | | | | | 195 | | | | | — | | | | | 195 | | | | | | — | | | | | 171 | | | | | (14) | | | | | 157 | | | | | 18 | | | | | 4 | | | | | 16 | | | | | 195 | | | | | — | | | | | 195 | | | ||||||||||||||||||||
Income (loss) from operations | | | | — | | | | | 169 | | | | | (15) | | | | | 154 | | | | | (21) | | | | | (3) | | | | | (14) | | | | | 116 | | | | | — | | | | | 116 | | | | | | — | | | | | 169 | | | | | (15) | | | | | 154 | | | | | (21) | | | | | (3) | | | | | (14) | | | | | 116 | | | | | — | | | | | 116 | | | ||||||||||||||||||||
Interest income | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | ||||||||||||||||||||
Interest expense | | | | — | | | | | (6) | | | | | — | | | | | (6) | | | | | — | | | | | — | | | | | — | | | | | (6) | | | | | — | | | | | (6) | | | | | | — | | | | | (6) | | | | | — | | | | | (6) | | | | | — | | | | | — | | | | | — | | | | | (6) | | | | | — | | | | | (6) | | | ||||||||||||||||||||
Income (loss) before income taxes | | | | — | | | | | 163 | | | | | (15) | | | | | 148 | | | | | (21) | | | | | (3) | | | | | (14) | | | | | 110 | | | | | — | | | | | 110 | | | | | | — | | | | | 163 | | | | | (15) | | | | | 148 | | | | | (21) | | | | | (3) | | | | | (14) | | | | | 110 | | | | | — | | | | | 110 | | | ||||||||||||||||||||
Income tax (benefit) expense | | | | — | | | | | 55 | | | | | — | | | | | 55 | | | | | (7)(cc) | | | | | (1) | | | | | (5)(cc) | | | | | 42 | | | | | — | | | | | 42 | | | | | | — | | | | | 55 | | | | | — | | | | | 55 | | | | | (7)(cc) | | | | | (1) | | | | | (5)(cc) | | | | | 42 | | | | | — | | | | | 42 | | | ||||||||||||||||||||
Net income (loss) | | | $ | — | | | | $ | 108 | | | | $ | (15) | | | | $ | 93 | | | | $ | (14) | | | | $ | (2) | | | | $ | (9) | | | | $ | 68 | | | | $ | — | | | | $ | 68 | | | | | $ | — | | | | $ | 108 | | | | $ | (15) | | | | $ | 93 | | | | $ | (14) | | | | $ | (2) | | | | $ | (9) | | | | $ | 68 | | | | $ | — | | | | $ | 68 | | | ||||||||||||||||||||
Weighted average shares outstanding | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic | | | | 19,933,292 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (4) | | | | | 206,000,000 | | | | | (4) | | | | | 140,000,000 | | | | | | 19,933,292 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (4) | | | | | 206,000,000 | | | | | (4) | | | | | 140,000,000 | | | ||||||||||||||||||||
Diluted | | | | 84,000,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (4) | | | | | 214,362,684 | | | | | (4) | | | | | 151,169,016 | | | | | | 84,000,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (4) | | | | | 214,362,356 | | | | | (4) | | | | | 151,168,579 | | | ||||||||||||||||||||
Net earnings per share | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic | | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 0.30 | | | | | | | | | $ | 0.31 | | | | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 0.30 | | | | | | | | | $ | 0.31 | | | ||||||||||||||||||||
Diluted | | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 0.28 | | | | | | | | | $ | 0.28 | | | | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 0.28 | | | | | | | | | $ | 0.28 | | |
| | | (in millions except share and per share data) | | |||
Shares of FGL common stock outstanding as of the Merger Agreement | | | | | 58,991,806 | | |
Cash consideration per share to FGL common stockholders | | | | $ | 31.10 | | |
Estimated cash consideration to FGL common stockholders | | | | $ | 1,835 | | |
Estimated cash consideration for FGL outstanding stock-based compensation awards | | | | | 3(1) | | |
Estimated total consideration for FGL | | | | | 1,838 | | |
Estimated total consideration for FSR | | | | | 65 | | |
Total estimated consideration | | | | $ | 1,903 | | |
|
| | | (in millions except share and per share data) | | |||
Shares of FGL common stock outstanding as of the Merger Agreement | | | | | 58,991,806 | | |
Cash consideration per share to FGL common stockholders | | | | $ | 31.10 | | |
Estimated cash consideration to FGL common stockholders | | | | $ | 1,835 | | |
Estimated cash consideration for FGL outstanding stock-based compensation awards | | | | | 3(1) | | |
Estimated total consideration for FGL | | | | | 1,838 | | |
Estimated total consideration for FSR | | | | | 65 | | |
Total estimated consideration | | | | $ | 1,903 | | |
|
| | | FGL | | | FSR | | | Total | | |||||||||
| | | (in millions) | | |||||||||||||||
Commercial mortgage loans – carrying value | | | | $ | 579 | | | | | $ | — | | | | | $ | 579 | | |
Commercial mortgage loans – fair value | | | | | 576 | | | | | | — | | | | | | 576 | | |
Net purchase accounting adjustment | | | | $ | (3) | | | | | $ | — | | | | | $ | (3) | | |
Other investments – carrying value | | | | $ | 119 | | | | | $ | — | | | | | $ | 119 | | |
Other investments – fair value | | | | | 115 | | | | | | — | | | | | | 115 | | |
Net purchase accounting adjustment(1) | | | | $ | (4) | | | | | $ | — | | | | | $ | (4) | | |
Reinsurance recoverables – carrying value | | | | $ | 3,426 | | | | | | — | | | | | $ | 3,426 | | |
Reinsurance recoverables – fair value | | | | | 3,363 | | | | | | — | | | | | | 3,363 | | |
Net purchase accounting adjustment | | | | $ | (63) | | | | | | — | | | | | $ | (63) | | |
|
| | | FGL | | | FSR | | | Total | ||||||||
| | | (in millions) | ||||||||||||||
Intangibles, net – carrying value | | | | $ | 1,184 | | | | | $ | — | | | | | $ | 1,184 |
Intangibles, net – fair value | | | | | 1,586 | | | | | | — | | | | | | 1,586 |
Net purchase accounting adjustment(3) | | | | $ | 402 | | | | | $ | — | | | | | $ | 402 |
Goodwill – carrying value | | | | $ | — | | | | | $ | — | | | | | $ | — |
Goodwill – fair value(4) | | | | | 79 | | | | | | — | | | | | | 79 |
Net purchase accounting adjustment | | | | $ | 79 | | | | | $ | — | | | | | $ | 79 |
Other assets(2) – carrying value | | | | $ | 204 | | | | | $ | 23 | | | | | $ | 227 |
Other assets – fair value | | | | | 199 | | | | | | 23 | | | | | | 222 |
Net purchase accounting adjustment | | | | $ | (5) | | | | | $ | — | | | | | $ | (5) |
Contractholder funds – carrying value | | | | $ | 20,052 | | | | | $ | — | | | | | $ | 20,052 |
Contractholder funds – fair value | | | | | 20,500 | | | | | | — | | | | | | 20,500 |
Net purchase accounting adjustment(5) | | | | $ | 448 | | | | | $ | — | | | | | $ | 448 |
Debt – carrying value | | | | $ | 300 | | | | | $ | — | | | | | $ | 300 |
Debt – fair value | | | | | 301 | | | | | | — | | | | | | 301 |
Net purchase accounting adjustment | | | | $ | 1 | | | | | $ | — | | | | | $ | 1 |
Other liabilities – carrying value | | | | $ | 903 | | | | | $ | 11 | | | | | $ | 914 |
Other liabilities – fair value | | | | | 879 | | | | | | 11 | | | | | | 890 |
Net purchase accounting adjustment(6) | | | | $ | (24) | | | | | $ | — | | | | | $ | (24) |
|
| | | (in millions) | | |||
Assets | | | |||||
Related party investments | | | | | (3) | | |
Related party loans | | | | | (71) | | |
Funds withheld receivables | | | | | (930) | | |
Reinsurance recoverables | | | | | (1,004) | | |
Other assets(1) | | | | | (119) | | |
Liabilities | | | |||||
Funds withheld for reinsurance liabilities | | | | | (1,123) | | |
Insurance reserves | | | | | (1,004) | | |
| | | FGL | | | FSR | | | Total | | |||||||||
| | | (in millions) | | |||||||||||||||
Common stock | | | | $ | (1) | | | | | $ | — | | | | | $ | (1) | | |
Additional paid-in capital | | | | | (715) | | | | | | (178) | | | | | | (893) | | |
Retained earnings (accumulated deficit) | | | | | (914) | | | | | | 77 | | | | | | (837) | | |
Accumulated other comprehensive income | | | | | (291) | | | | | | — | | | | | | (291) | | |
Treasury stock | | | | | 13 | | | | | | — | | | | | | 13 | | |
Total adjustment | | | | $ | (1,908) | | | | | $ | (101) | | | | | $ | (2,009) | | |
|
| | | Three Months Ended March 31, 2017 | | | Year Ended December 31, 2016 | | ||||||||||||||||||||||||||||||
| | | FGL | | | FSR | | | Total | | | FGL | | | FSR | | | Total | | ||||||||||||||||||
| | | (in millions) | | |||||||||||||||||||||||||||||||||
Calculation of amortization adjustment: | | | | | | | | ||||||||||||||||||||||||||||||
Historical amortization recognized on DAC and VOBA | | | | $ | 123 | | | | | $ | — | | | | | $ | 123 | | | | | $ | 54 | | | | | $ | — | | | | | $ | 54 | | |
Amortization after fair value (including VOBA and other intangibles) | | | | | 147 | | | | | | — | | | | | | 147 | | | | | | 130 | | | | | | — | | | | | | 130 | | |
Amortization expense adjustment for the period | | | | $ | 24 | | | | | $ | — | | | | | $ | 24 | | | | | $ | 76 | | | | | $ | — | | | | | $ | 76 | | |
|
| | | Three Months Ended March 31, 2017 | | | Year Ended December 31, 2016 | | ||||||||||||||||||||||||||||||
| | | Purchase Accounting Adjustments | | | Pro Forma Adjustments (Assuming No Redemption) | | | Additional Pro Forma Adjustments (Assuming Maximum Redemption) | | | Purchase Accounting Adjustments | | | Pro Forma Adjustments (Assuming No Redemption) | | | Additional Pro Forma Adjustments (Assuming Maximum Redemption) | | ||||||||||||||||||
| | | (in millions) | | |||||||||||||||||||||||||||||||||
Pro forma net income (loss) before income taxes | | | | $ | (21) | | | | | $ | (14) | | | | | $ | — | | | | | $ | (41) | | | | | $ | (58) | | | | | $ | — | | |
Statutory tax rate | | | | | 35% | | | | | | 35% | | | | | | 35% | | | | | | 35% | | | | | | 35% | | | | | | 35% | | |
Income tax (benefit) expense | | | | $ | (7) | | | | | $ | (5) | | | | | $ | — | | | | | $ | (14) | | | | | $ | (21) | | | | | $ | — | | |
|
| | | Three Months Ended March 31, 2017 | | | Year Ended December 31, 2016 | | ||||||
| | | (in millions) | | |||||||||
Premiums | | | | $ | — | | | | | $ | 3 | | |
Net investment income | | | | | 11 | | | | | | 61 | | |
Net investment gains (losses) | | | | | (11) | | | | | | (57) | | |
Insurance and investment product fees and other | | | | | 1 | | | | | | 3 | | |
Benefits and other changes in policy reserves | | | | | (4) | | | | | | 50 | | |
Income tax (benefit) expense | | | | | 1 | | | | | | (21) | | |
Impact to net income (loss) | | | | $ | (2) | | | | | $ | 39 | | |
|
| Combined Pro Forma Basic Weighted Average Shares (assuming no redemption) | | | |||||
| Founders shares | | | | | 30,000,000 | | |
| Shares issued as part of units purchased in IPO | | | | | 69,000,000 | | |
| Share purchases pursuant to forward purchase agreements | | | | | 51,000,000 | | |
| Share purchases pursuant to the Equity Commitment Letters | | | | | 36,000,000 | | |
| Share purchases by the ROFO Financing participants | | | | | 20,000,000 | | |
| Pro forma weighted average shares (basic) | | | | | 206,000,000 | | |
|
| Combined Pro Forma Diluted Weighted Average Shares (assuming no redemption) | | | |||||
| Founders shares | | | | | 30,000,000 | | |
| Shares issued as part of units purchased in IPO | | | | | 69,000,000 | | |
| Share purchases pursuant to forward purchase agreements | | | | | 51,000,000 | | |
| Share purchases pursuant to the Equity Commitment Letters | | | | | 36,000,000 | | |
| Share purchases by the ROFO Financing participants | | | | | 20,000,000 | | |
| Preferred warrants | | | | | | | |
| Pro forma weighted average shares (diluted) | | | | | | | |
|
| Combined Pro Forma Basic Weighted Average Shares (assuming maximum redemption) | | | |||||
| Founders shares | | | | | 30,000,000 | | |
| Shares issued as part of units purchased in IPO | | | | | 23,000,000(2) | | |
| Share purchases pursuant to forward purchase agreements | | | | | 51,000,000 | | |
| Share purchases pursuant to the Equity Commitment Letters | | | | | 36,000,000 | | |
| Pro forma weighted average shares (basic) | | | | | 140,000,000 | | |
|
| Combined Pro Forma Diluted Weighted Average Shares (assuming maximum redemption) | | | |||||
| Founders shares | | | | | 30,000,000 | | |
| Shares issued as part of units purchased in IPO | | | | | 23,000,000(2) | | |
| Share purchases pursuant to forward purchase agreements | | | | | 51,000,000 | | |
| Share purchases pursuant to the Equity Commitment Letters | | | | | 36,000,000 | | |
| Preferred warrants | | | | | | | |
| Pro forma weighted average shares (diluted) | | | | | | | |
|
| | | Three Months Ended March 31, 2017 | | | Year Ended December 31, 2016 | | ||||||||||||||||||
| | | Pro Forma Adjustments (Assuming No Redemption) | | | Additional Pro Forma Adjustments (Assuming Maximum Redemption) | | | Pro Forma Adjustments (Assuming No Redemption) | | | Additional Pro Forma Adjustments (Assuming Maximum Redemption) | | ||||||||||||
| | | | | | ||||||||||||||||||||
Net income | | | | | 68 | | | | | | 68 | | | | | | 53 | | | | | | 53 | | |
Mezzanine equity accretion | | | | | 7 | | | | | | 25 | | | | | | 29 | | | | | | 99 | | |
Income (loss) attributable to common shareholders | | | | | 61 | | | | | | 43 | | | | | | 24 | | | | | | (46) | | |
Basic earnings (loss) per share | | | | $ | 0.30 | | | | | $ | 0.31 | | | | | $ | 0.12 | | | | | $ | (0.33) | | |
Diluted earnings (loss) per share | | | | $ | 0.28 | | | | | $ | 0.28 | | | | | $ | 0.11 | | | | | $ | (0.33) | | |
| | | FGL | | | FSR | | ||||||
| | | (in millions) | | |||||||||
Fixed maturity securities, available-for-sale | | | | $ | 20,052 | | | | | $ | — | | |
Equity securities, available-for-sale | | | | | 712 | | | | | | — | | |
Derivative investments | | | | | 351 | | | | | | — | | |
Commercial mortgage loans | | | | | 576 | | | | | | — | | |
Other invested assets | | | | | 115 | | | | | | — | | |
Related party investments | | | | | — | | | | | | 95 | | |
Total investments | | | | | 21,806 | | | | | | 95 | | |
Related party loans | | | | | 71 | | | | | | — | | |
Funds withheld receivable | | | | | — | | | | | | 1,626 | | |
Cash and cash equivalents | | | | | 887 | | | | | | 25 | | |
Accrued investment income | | | | | 225 | | | | | | — | | |
Reinsurance recoverable | | | | | 3,363 | | | | | | — | | |
Intangibles, net | | | | | 1,586 | | | | | | — | | |
Deferred tax assets | | | | | 36 | | | | | | — | | |
Income taxes receivable | | | | | — | | | | | | 8 | | |
Other assets | | | | | 199 | | | | | | 23 | | |
Total identifiable assets acquired | | | | | 28,173 | | | | | | 1,777 | | |
Contractholder funds | | | | | (20,500) | | | | | | — | | |
Future policy benefits | | | | | (3,435) | | | | | | — | | |
Funds withheld for insurance liabilities | | | | | (1,134) | | | | | | — | | |
Liability for policy and contract claims | | | | | (60) | | | | | | — | | |
Insurance reserves | | | | | — | | | | | | (1,665) | | |
Debt | | | | | (301) | | | | | | — | | |
Revolving credit facility | | | | | (105) | | | | | | — | | |
Other liabilities | | | | | (879) | | | | | | (11) | | |
Net identifiable liabilities acquired | | | | | 1,759 | | | | | | 101 | | |
Goodwill (bargain purchase gain)(1) | | | | | 79 | | | | | | (36) | | |
Total gross consideration | | | | $ | 1,838 | | | | | $ | 65 | | |
|
| | | Fair Value | | | |||||||||||||||||
| | | FGL | | | FSR | | | Total | | | Useful Life | | |||||||||
| | | (in millions) | | | |||||||||||||||||
Distribution channels | | | | $ | 44 | | | | | $ | — | | | | | $ | 44 | | | | 20 years | |
Trade names | | | | | 20 | | | | | | — | | | | | | 20 | | | | 10 years | |
Licenses | | | | | 7 | | | | | | — | | | | | | 7 | | | | indefinite | |
Total intangible assets | | | | $ | 71 | | | | | $ | — | | | | | $ | 71 | | | | ||
|
| | | | | | | | | | | | Combined Pro Forma | | | | | | | | | | | | | Combined Pro Forma | | ||||||||||||||||||||||||
| | CF Corp. | | FGL | | Assuming No Redemptions | | Assuming Maximum Redemptions | | | CF Corp. | | FGL | | Assuming No Redemptions | | Assuming Maximum Redemptions | | ||||||||||||||||||||||||||||||||
| | (in millions, except share and per share amounts) | | | (in millions, except share and per share amounts) | | ||||||||||||||||||||||||||||||||||||||||||||
As of and for the Three Months Ended (Unaudited) | | | | | ||||||||||||||||||||||||||||||||||||||||||||||
Book value per share(1) | | | $ | 0.25 | | | | $ | 32.74 | | | | $ | 8.27 | | | | $ | 7.51 | | | | | $ | 0.25 | | | | $ | 32.74 | | | | $ | 8.27 | | | | $ | 7.51 | | | ||||||||
Weighted average shares outstanding – basic | | | | 19,933,292 | | | | | 58,280,532 | | | | | 206,000,000 | | | | | 140,000,000 | | | | | | 19,933,292 | | | | | 58,280,532 | | | | | 206,000,000 | | | | | 140,000,000 | | | ||||||||
Weighted average shares outstanding – diluted | | | | 84,000,000 | | | | | 58,366,009 | | | | | 214,362,684 | | | | | 151,169,016 | | | | | | 84,000,000 | | | | | 58,366,009 | | | | | 214,362,356 | | | | | 151,168,579 | | | ||||||||
Net earnings (loss) per share – basic | | | $ | — | | | | $ | 1.85 | | | | $ | 0.30 | | | | $ | 0.31 | | | | | $ | — | | | | $ | 1.85 | | | | $ | 0.30 | | | | $ | 0.31 | | | ||||||||
Net earnings (loss) per share – diluted | | | $ | — | | | | $ | 1.85 | | | | $ | 0.28 | | | | $ | 0.28 | | | | | $ | — | | | | $ | 1.85 | | | | $ | 0.28 | | | | $ | 0.28 | | | ||||||||
Cash dividends per share | | | $ | — | | | | $ | 0.065 | | | | $ | 0.018 | | | | $ | 0.027 | | | | | $ | — | | | | $ | 0.065 | | | | $ | 0.018 | | | | $ | 0.027 | | | ||||||||
As of and for the Year Ended | | | | | ||||||||||||||||||||||||||||||||||||||||||||||
Weighted average shares outstanding – basic | | | | 18,560,652 | | | | | 58,275,013 | | | | | 206,000,000 | | | | | 140,000,000 | | | | | | 18,560,652 | | | | | 58,275,013 | | | | | 206,000,000 | | | | | 140,000,000 | | | ||||||||
Weighted average shares outstanding - diluted | | | | 18,560,652 | | | | | 58,578,163 | | | | | 214,362,684 | | | | | 151,169,016 | | | | | | 18,560,652 | | | | | 58,578,163 | | | | | 214,362,356 | | | | | 151,168,579 | | | ||||||||
Net earnings (loss) per share – basic | | | $ | (0.02) | | | | $ | 1.67 | | | | $ | 0.12 | | | | $ | (0.33) | | | | | $ | (0.02) | | | | $ | 1.67 | | | | $ | 0.12 | | | | $ | (0.33) | | | ||||||||
Net earnings (loss) per share – diluted | | | $ | (0.02) | | | | $ | 1.66 | | | | $ | 0.11 | | | | $ | (0.33) | | | | | $ | (0.02) | | | | $ | 1.66 | | | | $ | 0.11 | | | | $ | (0.33) | | | ||||||||
Cash dividends per share | | | $ | — | | | | $ | 0.260 | | | | $ | 0.074 | | | | $ | 0.108 | | | | | $ | — | | | | $ | 0.260 | | | | $ | 0.074 | | | | $ | 0.108 | | |
| | | March 31, 2017 | | |||||||||||||||||||||
| | | | | | | | | | | | | | | Pro Forma | | |||||||||
| | | Historical | | | Assuming No Redemptions | | | Assuming Maximum Redemptions | | |||||||||||||||
| | | CF Corp. | | | FGL | | ||||||||||||||||||
| | | (in millions) | | |||||||||||||||||||||
Cash and cash equivalents | | | | $ | 1 | | | | | $ | 887 | | | | | $ | 1,081 | | | | | $ | 887 | | |
Investments and cash equivalents held in Trust Account | | | | | 691 | | | | | | — | | | | | | — | | | | | | — | | |
| | | | | 692 | | | | | | 887 | | | | | | 1,081 | | | | | | 887 | | |
Long-term debt, including current portion | | | | | — | | | | | | 405 | | | | | | 449 | | | | | | 457 | | |
Deferred underwriting compensation | | | | | 45 | | | | | | — | | | | | | — | | | | | | — | | |
Preferred shares | | | | | — | | | | | | — | | | | | | 367 | | | | | | 818 | | |
Class A ordinary shares, subject to possible redemption | | | | | 641 | | | | | | — | | | | | | — | | | | | | — | | |
Shareholders’ equity | | | | | 5 | | | | | | 1,908 | | | | | | 1,704 | | | | | | 1,051 | | |
Total capitalization | | | | $ | 1,383 | | | | | $ | 3,200 | | | | | $ | 3,601 | | | | | $ | 3,213 | | |
|
| | | March 31, 2017 | | |||||||||||||||||||||
| | | | | | | | | | | | | | | Pro Forma | | |||||||||
| | | Historical | | | Assuming No Redemptions | | | Assuming Maximum Redemptions | | |||||||||||||||
| | | CF Corp. | | | FGL | | ||||||||||||||||||
| | | (in millions) | | |||||||||||||||||||||
Long-term debt, including current portion | | | | $ | — | | | | | $ | 405 | | | | | $ | 449 | | | | | $ | 457 | | |
Deferred underwriting compensation | | | | | 45 | | | | | | — | | | | | | — | | | | | | — | | |
Preferred shares | | | | | — | | | | | | — | | | | | | 367 | | | | | | 818 | | |
Class A ordinary shares, subject to possible redemption | | | | | 641 | | | | | | — | | | | | | — | | | | | | — | | |
Shareholders’ equity | | | | | 5 | | | | | | 1,908 | | | | | | 1,704 | | | | | | 1,051 | | |
Total capitalization | | | | $ | 691 | | | | | $ | 2,313 | | | | | $ | 2,520 | | | | | $ | 2,326 | | |
|
| Primary Selected Companies | | | Secondary Selected Companies | |
| • American Equity Investment Life Holding Company • Athene Group Ltd. | | | • Ameriprise Financial, Inc. • CNO Financial Group, Inc. • Lincoln National Corporation • MetLife, Inc. • Principal Financial Group, Inc. • Primerica, Inc. • Prudential Financial, Inc. • Torchmark Corporation • Unum Group • Voya Financial, Inc. | |
| Selected Approximate Implied Per Share Equity Value Reference Range | | | Business Combination Consideration | |
| $26.00 − $32.00 | | | $31.10 | |
| Announcement Date | | | Acquiror | | | Target | |
| • 11/9/2015 | | | • Anbang Insurance Group Co., Ltd. | | | • Fidelity & Guaranty Life | |
| • 8/11/2015 | | | • Sumitomo Life Insurance Company | | | • Symetra Financial Corporation | |
| • 6/3/2014 | | | • Dai-ichi Life Insurance Company, Limited | | | • Protective Life Corporation | |
| • 12/21/2012 | | | • Athene Holding Ltd. | | | • Aviva USA Corporation | |
| • 7/13/2012 | | | • Athene Holding Ltd. | | | • Presidential Life Corporation | |
| • 10/7/2011 | | | • Guggenheim Partners, LLC | | | • EquiTrust Life Insurance Company | |
| Selected Approximate Implied Per Share Equity Value Reference Range | | | Business Combination Consideration | |
| $31.00 − $37.00 | | | $31.10 | |
| Selected Approximate Implied Per Share Equity Value Reference Ranges: | | | Business Combination Consideration | | |||
| Standalone | | | Pro Forma for Transaction | | | ||
| $30.00 − $34.00 | | | $36.00 − $43.00 | | | $31.10 | |
Year | | | 2017 | | | 2018 | | | 2019 | | |||||||||
Adjusted Operating EPS(1) | | | | $ | 2.59 | | | | | $ | 2.90 | | | | | $ | 3.24 | | |
Adjusted Operating ROE, excluding AOCI(2) | | | | | 9.8% | | | | | | 10.1% | | | | | | 10.4% | | |
Book Value/Share, excluding AOCI(3) | | | | $ | 27.46 | | | | | $ | 29.82 | | | | | $ | 32.51 | | |
| | | For the Year Ended September 30, | | |||||||||||||||||||||||||||
(in millions) | | | 2018E | | | 2019E | | | 2020E | | | 2021E | | | 2022E | | |||||||||||||||
Total Revenue | | | | $ | 1,304.7 | | | | | $ | 1,384.3 | | | | | $ | 1,468.9 | | | | | $ | 1,510.2 | | | | | $ | 1,555.0 | | |
Net Income | | | | $ | 280.8 | | | | | $ | 318.8 | | | | | $ | 348.1 | | | | | $ | 349.9 | | | | | $ | 353.3 | | |
| Sources of Funds(1) | | | Uses(1) | | ||||||||||||
| (in millions) | | |||||||||||||||
| Debt Financing Commitment | | | | $ | 418 | | | | Debt | | | | $ | 405 | | |
| Preferred Shares | | | | | 375 | | | | FGL Equity Purchase Price | | | | | 1,835 | | |
| Public shares and forward purchase shares | | | | | 1,200 | | | | FSR Equity Purchase Price | | | | | 65 | | |
| BTO & FNF equity financing | | | | | 360 | | | | Fees & Other Adjustments(2) | | | | | 99 | | |
| 338(h)(10) Rebate | | | | | 30 | | | | | |||||||
| ROFO shares | | | | | 200 | | | | Cash to Balance Sheet | | | | | 179 | | |
| Total Sources | | | | $ | 2,583 | | | | Total Uses | | | | $ | 2,583 | | |
|
Name | | | Age | | | Position | |
Chinh E. Chu | | | 50 | | | Co-Executive Chairman | |
William P. Foley, II | | | 72 | | | Co-Executive Chairman | |
Christopher J. Littlefield | | | 50 | | | President, Chief Executive Officer and Director | |
Dennis R. Vigneau | | | 50 | | | Chief Financial Officer | |
Eric L. Marhoun | | | 55 | | | General Counsel and Secretary | |
James A. Quella | | | 67 | | | Director | |
Keith W. Abell | | | 60 | | | Director | |
Richard N. Massey | | | 60 | | | Director | |
Menes O. Chee | | | 40 | | | Director | |
Patrick S. Baird | | | 63 | | | Director | |
Timothy M. Walsh | | | 54 | | | Director | |
| | | | | | | | | | | | | | | After Business Combination and Related Transactions | | |||||||||||||||||||||
| | | Prior to Business Combination and Related Transactions(1) | | | Assuming No Redemption | | | Assuming Maximum Redemption | | |||||||||||||||||||||||||||
Directors and Executive Officers | | | Number of Shares Beneficially Owned(2) | | | Percentage of Outstanding Ordinary Shares | | | Number of Shares Beneficially Owned | | | Percentage of Outstanding Ordinary Shares | | | Number of Shares Beneficially Owned | | | Percentage of Outstanding Ordinary Shares | | ||||||||||||||||||
Chinh E. Chu(3) | | | | | 11,452,206 | | | | | | 13.6% | | | | | | 22,692,058(7) | | | | | | 8.0% | | | | | | 22,692,058 | | | | | | 10.3% | | |
William P. Foley, II(3) | | | | | 11,452,206 | | | | | | 13.6% | | | | | | 22,692,058(8) | | | | | | 8.0% | | | | | | 22,692,058 | | | | | | 10.3% | | |
Douglas B. Newton | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Richard N. Massey | | | | | 73,529 | | | | | | * | | | | | | 2,390,565 | | | | | | * | | | | | | 2,390,565 | | | | | | 1.1% | | |
James A. Quella | | | | | 36,765 | | | | | | * | | | | | | 1,195,282(9) | | | | | | * | | | | | | 1,195,282 | | | | | | * | | |
Keith Abell | | | | | 8,516 | | | | | | * | | | | | | 239,056 | | | | | | * | | | | | | 239,056 | | | | | | * | | |
Menes O. Chee | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Christopher J. Littlefield | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Dennis R. Vigneau | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Eric L. Marhoun | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
David Ducommun | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Patrick S. Baird | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Timothy M. Walsh | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
All officers and directors as a group (six individuals) | | | | | 12,712,716 | | | | | | 15.1% | | | | | | 49,209,019 | | | | | | 17.3% | | | | | | 49,209,019 | | | | | | 22.3% | | |
Greater than 5% Shareholders | | | | | | | | ||||||||||||||||||||||||||||||
CF Capital Growth, LLC (our Sponsor)(3) | | | | | 11,250,000 | | | | | | 13.4% | | | | | | 45,384,116(10) | | | | | | 16.0% | | | | | | 45,384,116(10) | | | | | | 20.6% | | |
BTO | | | | | 919,118 | | | | | | — | | | | | | 43,378,906(11) | | | | | | 15.3% | | | | | | 43,378,906(11) | | | | | | 19.7% | | |
FNF | | | | | — | | | | | | — | | | | | | 20,232,000(12) | | | | | | 7.1% | | | | | | 24,580,855(12) | | | | | | 11.1% | | |
Angelo, Gordon & Co., L.P. | | | | | 5,800,000(4) | | | | | | 6.9% | | | | | | 8,700,000(13) | | | | | | 3.1% | | | | | | 2,900,000 | | | | | | 1.3% | | |
Blue Pool Capital Limited | | | | | 5,000,000(5) | | | | | | 6.0% | | | | | | 7,500,000(14) | | | | | | 2.6% | | | | | | 2,500,000 | | | | | | 1.1% | | |
BlueMountain Capital Management, LLC | | | | | 7,000,000(6) | | | | | | 8.3% | | | | | | 10,500,000(15) | | | | | | 3.7% | | | | | | 3,500,000 | | | | | | 1.6% | | |
| Unaudited Interim Financial Statements | | | | | Page | | |
| | | | | F-2 | | | |
| | | | | F-3 | | | |
| | | | | F-4 | | | |
| | | | | F-5 | | | |
| Audited Annual Financial Statements | | | |||||
| | | | | F-17 | | | |
| | | | | F-18 | | | |
| | | | | F-19 | | | |
| | | | | F-20 | | | |
| | | | | F-21 | | | |
| | | | | F-22 | | | |
| | | | | F-44 | | | |
| | | | | F-45 | | | |
| | | | | F-46 | | |
| | | March 31, 2017 | | | September 30, 2016 | | ||||||
| | | (Unaudited) | | | ||||||||
ASSETS | | | | ||||||||||
Related party investments | | | | $ | 95.2 | | | | | $ | 98.4 | | |
Cash and cash equivalents | | | | | 25.4 | | | | | | 32.1 | | |
Funds withheld receivables at fair value | | | | | 1,626.0 | | | | | | 1,650.4 | | |
Income tax receivable | | | | | 8.2 | | | | | | 16.5 | | |
Other assets | | | | | 22.1 | | | | | | 19.0 | | |
Total assets | | | | $ | 1,776.9 | | | | | $ | 1,816.4 | | |
LIABILITIES AND EQUITY | | | | ||||||||||
Insurance reserves at fair value | | | | $ | 1,664.8 | | | | | $ | 1,685.9 | | |
Other liabilities | | | | | 11.2 | | | | | | 9.9 | | |
Total liabilities | | | | | 1,676.0 | | | | | | 1,695.8 | | |
Commitments and contingencies | | | | | | | | | | | | | |
Shareholder’s equity: | | | | ||||||||||
Common stock | | | | | 0.4 | | | | | | 0.4 | | |
Additional paid-in capital | | | | | 177.7 | | | | | | 177.7 | | |
Accumulated deficit | | | | | (77.2) | | | | | | (57.7) | | |
Accumulated other comprehensive income (loss) | | | | | — | | | | | | 0.2 | | |
Total shareholder’s equity | | | | | 100.9 | | | | | | 120.6 | | |
Total liabilities and equity | | | | $ | 1,776.9 | | | | | $ | 1,816.4 | | |
|
| | | Three months ended March 31, | | | Six months ended March 31, | | ||||||||||||||||||
| | | 2017 | | | 2016 | | | 2017 | | | 2016 | | ||||||||||||
| | | (Unaudited) | | | (Unaudited) | | ||||||||||||||||||
Revenues: | | | | | | ||||||||||||||||||||
Net investment income | | | | $ | 0.1 | | | | | $ | 0.6 | | | | | $ | 0.1 | | | | | $ | 1.5 | | |
Net investment gains | | | | | 40.9 | | | | | | 40.3 | | | | | | 12.2 | | | | | | 28.6 | | |
Total revenues | | | | | 41.0 | | | | | | 40.9 | | | | | | 12.3 | | | | | | 30.1 | | |
Operating costs and expenses: | | | | | | ||||||||||||||||||||
Benefits and other changes in policy reserves | | | | | 42.0 | | | | | | 38.5 | | | | | | 26.3 | | | | | | 26.1 | | |
Acquisition and operating expenses | | | | | 3.1 | | | | | | 3.8 | | | | | | 5.5 | | | | | | 5.4 | | |
Total operating costs and expenses | | | | | 45.1 | | | | | | 42.3 | | | | | | 31.8 | | | | | | 31.5 | | |
Operating loss | | | | | (4.1) | | | | | | (1.4) | | | | | | (19.5) | | | | | | (1.4) | | |
Other income, net | | | | | 0.1 | | | | | | — | | | | | | 0.1 | | | | | | — | | |
Loss before income taxes | | | | | (4.0) | | | | | | (1.4) | | | | | | (19.4) | | | | | | (1.4) | | |
Income tax expense (benefit) | | | | | 0.1 | | | | | | (0.5) | | | | | | 0.1 | | | | | | (1.8) | | |
Net (loss) income | | | | $ | (4.1) | | | | | $ | (0.9) | | | | | $ | (19.5) | | | | | $ | 0.4 | | |
|
| | | Six months ended March 31, | | |||||||||
| | | 2017 | | | 2016 | | ||||||
| | | (Unaudited) | | |||||||||
Cash flows from operating activities: | | | | ||||||||||
Net (loss) income | | | | $ | (19.5) | | | | | $ | 0.4 | | |
Adjustments to reconcile net (loss) income to operating cash flows: | | | | | | | | | | | | | |
Deferred income taxes | | | | | 0.1 | | | | | | 0.2 | | |
Net recognized gains on investments and derivatives | | | | | (0.6) | | | | | | (3.9) | | |
Changes in operating assets and liabilities | | | | | 14.3 | | | | | | (4.4) | | |
Net change in cash due to operating activities | | | | | (5.7) | | | | | | (7.7) | | |
Cash flows from investing activities: | | | | ||||||||||
Proceeds from investments sold, matured or repaid | | | | | 2.4 | | | | | | 17.4 | | |
Cost of investments acquired | | | | | (3.8) | | | | | | (3.2) | | |
Net asset-based loan repayments | | | | | 0.4 | | | | | | 0.6 | | |
Other investing activities, net | | | | | — | | | | | | 7.9 | | |
Net change in cash due to investing activities | | | | | (1.0) | | | | | | 22.7 | | |
Net change in cash and cash equivalents | | | | | (6.7) | | | | | | 15.0 | | |
Cash and cash equivalents at beginning of period | | | | | 32.1 | | | | | | 18.0 | | |
Cash and cash equivalents at end of period | | | | $ | 25.4 | | | | | $ | 33.0 | | |
|
Asset Derivatives | | | Classification | | | March 31, 2017 | | | September 30, 2016 | | ||||||
Derivatives not designated as hedging instruments: | | | | | ||||||||||||
Call option receivable from FGL | | | Funds withheld receivables | | | | $ | 13.3 | | | | | $ | 11.3 | | |
Call options | | | Other assets | | | | | 10.5 | | | | | | 5.9 | | |
Total asset derivatives | | | | | | | $ | 23.8 | | | | | $ | 17.2 | | |
|
| | | | | | Three months ended March 31, | | | Six months ended March 31, | | ||||||||||||||||||
Classification | | | Derivatives Not Designated as Hedging Instruments | | | 2017 | | | 2016 | | | 2017 | | | 2016 | | ||||||||||||
Revenues: | | | | | | | ||||||||||||||||||||||
Net investment gains | | | Call options | | | | $ | 5.8 | | | | | $ | (1.4) | | | | | $ | 8.9 | | | | | $ | 0.5 | | |
| | | March 31, 2017 | | | September 30, 2016 | | ||||||||||||||||||||||||||||||||||||||||||
Assets | | | Level 1 | | | Level 2 | | | Level 3 | | | Fair Value | | | Level 1 | | | Level 2 | | | Level 3 | | | Fair Value | | ||||||||||||||||||||||||
Fixed maturity and equity securities included in funds withheld receivables | | | | $ | 80.5 | | | | | $ | 1,413.8 | | | | | $ | 49.1 | | | | | $ | 1,543.4 | | | | | $ | 69.9 | | | | | $ | 1,387.1 | | | | | $ | 78.1 | | | | | $ | 1,535.1 | | |
Call option receivable from FGL included in funds withheld receivables | | | | | — | | | | | | 13.3 | | | | | | — | | | | | | 13.3 | | | | | | — | | | | | | 11.3 | | | | | | — | | | | | | 11.3 | | |
Related party investments | | | | | — | | | | | | 2.0 | | | | | | 93.2 | | | | | | 95.2 | | | | | | — | | | | | | — | | | | | | 98.4 | | | | | | 98.4 | | |
Other invested assets included in other assets | | | | | — | | | | | | — | | | | | | 5.5 | | | | | | 5.5 | | | | | | — | | | | | | — | | | | | | 5.5 | | | | | | 5.5 | | |
Total financial assets | | | | $ | 80.5 | | | | | $ | 1,429.1 | | | | | $ | 147.8 | | | | | $ | 1,657.4 | | | | | $ | 69.9 | | | | | $ | 1,398.4 | | | | | $ | 182.0 | | | | | $ | 1,650.3 | | |
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves | | | | $ | — | | | | | $ | — | | | | | $ | 1,664.8 | | | | | $ | 1,664.8 | | | | | $ | — | | | | | $ | — | | | | | $ | 1,685.9 | | | | | $ | 1,685.9 | | |
Total financial liabilities | | | | $ | — | | | | | $ | — | | | | | $ | 1,664.8 | | | | | $ | 1,664.8 | | | | | $ | — | | | | | $ | — | | | | | $ | 1,685.9 | | | | | $ | 1,685.9 | | |
|
| | | Fair Value at | | | | | | | | | Range (Weighted average) | | ||||||||||||
Assets | | | March 31, 2017 | | | September 30, 2016 | | | Valuation Technique | | | Unobservable Input(s) | | | March 31, 2017 | | | September 30, 2016 | | ||||||
Related party investments − HGI Energy | | | | $ | 91.7 | | | | | $ | 91.0 | | | | Discounted Cash Flow | | | Discount rate | | | 1.31% | | | 0.79% | |
Related party investments − Salus preferred equity | | | | | 1.2 | | | | | | 6.7 | | | | Market- approach | | | Yield | | | 1% – 3% | | | 11% | |
| | | | | | | | | | | | | | | | | | RadioShack Corp. Recovery | | | —% | | | 5.5% | |
| | | | | | | | | | | | | | | | | | Discount rate | | | 7% – 9% | | | 15% | |
| | | | | | | | | | | | | | | | | | Salus CLO Equity | | | 11.9% | | | 28.4% | |
Related party investments − Salus CLO equity tranche | | | | | 0.3 | | | | | | 0.7 | | | | Third party valuation | | | Offered quote | | | 11.9% | | | 28.4% | |
| | | | | | | | | | | | | | | | | | Discount rate | | | 15% | | | 15% | |
| | | | | | | | | | | | | | | | | | RSH Recovery | | | —% | | | 5.5% | |
| | | | | | | | | | | | | | | | | | Other loan recoveries | | | 0% – 100% | | | 0% – 100% | |
Other invested assets included in other assets | | | | | 5.5 | | | | | | 5.5 | | | | Discounted Cash Flow | | | Probability of collection | | | 100% | | | 100% | |
| | | | | | | | | | | | | | | | | | Discount rate | | | 10% | | | 10% | |
Funds withheld receivables: | | | | | | | | ||||||||||||||||||
Fixed maturity securities | | | | | 33.6 | | | | | | 35.2 | | | | Matrix pricing | | | Quoted prices | | | 100% – 117% (106%) | | | 98% – 122% (109%) | |
Fixed maturity securities | | | | | 5.1 | | | | | | 5.4 | | | | Loan Recovery Value | | | Recovery rate | | | 56% – 100% (81%) | | | 56% – 100% (82%) | |
Fixed maturity securities | | | | | 10.0 | | | | | | 35.7 | | | | Broker- quoted | | | Offered quotes | | | 99% – 105% (100%) | | | 97% – 100% (100%) | |
Loan participations | | | | | 0.4 | | | | | | 1.8 | | | | Loan Recovery Value | | | Recovery rate | | | 56% | | | 52% – 100% (71%) | |
Total | | | | $ | 147.8 | | | | | $ | 182.0 | | | | | | | ||||||||
Liabilities | | | | | | | | ||||||||||||||||||
Insurance reserves | | | | $ | 1,664.8 | | | | | $ | 1,685.9 | | | | Discounted cash flow | | | Non-performance risk spread | | | 0.35% | | | 0.32% | |
| | | | | | | | | | | | | | | | | | Risk margin to reflect uncertainty | | | 0.50% | | | 0.50% | |
Total | | | | $ | 1,664.8 | | | | | $ | 1,685.9 | | | | | | | ||||||||
|
| | | Three months ended March 31, 2017 | | |||||||||||||||||||||||||||||||||||||||||||||
| | | Balance at Beginning of Period | | | Total Gains (Losses) | | | Purchases | | | Sales | | | Settlements | | | Net transfer In (Out) of Level 3(a) | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Related party investments | | | | $ | 93.1 | | | | | $ | 0.1 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 93.2 | | |
Other invested assets included in other assets | | | | | 5.5 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5.5 | | |
Funds withheld receivables | | | | | 46.4 | | | | | | — | | | | | | — | | | | | | 6.1 | | | | | | (1.0) | | | | | | — | | | | | | (2.4) | | | | | | 49.1 | | |
Total assets at fair value | | | | $ | 145.0 | | | | | $ | 0.1 | | | | | $ | — | | | | | $ | 6.1 | | | | | $ | (1.0) | | | | | $ | — | | | | | $ | (2.4) | | | | | $ | 147.8 | | |
|
| | | Balance at Beginning of Period | | | Total (Gains) Losses | | | Purchases | | | Sales | | | Settlements | | | Net transfer In (Out) of Level 3 | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves | | | | $ | 1,653.3 | | | | | $ | 44.3 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (32.8) | | | | | $ | — | | | | | $ | 1,664.8 | | |
Total liabilities at fair value | | | | $ | 1,653.3 | | | | | $ | 44.3 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (32.8) | | | | | $ | — | | | | | $ | 1,664.8 | | |
|
| | | Six months ended March 31, 2017 | | |||||||||||||||||||||||||||||||||||||||||||||
| | | Balance at Beginning of Period | | | Total Gains (Losses) | | | Purchases | | | Sales | | | Settlements | | | Net transfer In (Out) of Level 3(a) | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Related party investments | | | | $ | 98.4 | | | | | $ | (5.2) | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 93.2 | | |
Other invested assets included in other assets | | | | | 5.5 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5.5 | | |
Funds withheld receivables | | | | | 78.1 | | | | | | (1.3) | | | | | | — | | | | | | 9.1 | | | | | | (7.3) | | | | | | — | | | | | | (29.5) | | | | | | 49.1 | | |
Total assets at fair value | | | | $ | 182.0 | | | | | $ | (6.5) | | | | | $ | — | | | | | $ | 9.1 | | | | | $ | (7.3) | | | | | $ | — | | | | | $ | (29.5) | | | | | $ | 147.8 | | |
|
| | | Balance at Beginning of Period | | | Total (Gains) Losses | | | Purchases | | | Sales | | | Settlements | | | Net transfer In (Out) of Level 3 | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves | | | | $ | 1,685.9 | | | | | $ | 30.9 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (52.0) | | | | | $ | — | | | | | $ | 1,664.8 | | |
Total liabilities at fair value | | | | $ | 1,685.9 | | | | | $ | 30.9 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (52.0) | | | | | $ | — | | | | | $ | 1,664.8 | | |
|
| | | Three months ended March 31, 2016 | | |||||||||||||||||||||||||||||||||||||||||||||
| | | Balance at Beginning of Period | | | Total Gains (Losses) | | | Purchases | | | Sales | | | Settlements | | | Net transfer In (Out) of Level 3 | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Related party investments | | | | $ | 61.8 | | | | | $ | (2.5) | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 59.3 | | |
Other invested assets included in other assets | | | | | 5.5 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5.5 | | |
Funds withheld receivables | | | | | 65.1 | | | | | | (0.3) | | | | | | — | | | | | | 3.1 | | | | | | (3.4) | | | | | | — | | | | | | — | | | | | | 64.5 | | |
Total assets at fair value | | | | $ | 132.4 | | | | | $ | (2.8) | | | | | $ | — | | | | | $ | 3.1 | | | | | $ | (3.4) | | | | | $ | — | | | | | $ | — | | | | | $ | 129.3 | | |
|
| | | Balance at Beginning of Period | | | Total (Gains) Losses | | | Purchases | | | Sales | | | Settlements | | | Net transfer In (Out) of Level 3 | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves | | | | $ | 1,682.5 | | | | | $ | 40.6 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (36.6) | | | | | $ | — | | | | | $ | 1,686.5 | | |
Total liabilities at fair value | | | | $ | 1,682.5 | | | | | $ | 40.6 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (36.6) | | | | | $ | — | | | | | $ | 1,686.5 | | |
|
| | | Six months ended March 31, 2016 | | |||||||||||||||||||||||||||||||||||||||||||||
| | | Balance at Beginning of Period | | | Total Gains (Losses) | | | Purchases | | | Sales | | | Settlements | | | Net transfer In (Out) of Level 3 | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Corporate fixed maturity securities AFS | | | | $ | 14.1 | | | | | $ | (0.5) | | | | | $ | — | | | | | $ | — | | | | | $ | (13.6) | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Related party investments | | | | | 61.7 | | | | | | (2.4) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 59.3 | | |
Other invested assets included in other assets | | | | | 2.8 | | | | | | 2.7 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5.5 | | |
Funds withheld receivables | | | | | 74.7 | | | | | | (1.9) | | | | | | — | | | | | | 8.1 | | | | | | (16.4) | | | | | | — | | | | | | — | | | | | | 64.5 | | |
Total assets at fair value | | | | $ | 153.3 | | | | | $ | (2.1) | | | | | $ | — | | | | | $ | 8.1 | | | | | $ | (30.0) | | | | | $ | — | | | | | $ | — | | | | | $ | 70.0 | | |
|
| | | Balance at Beginning of Period | | | Total (Gains) Losses | | | Purchases | | | Sales | | | Settlements | | | Net transfer In (Out) of Level 3 | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves | | | | $ | 1,731.9 | | | | | $ | 28.5 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (73.9) | | | | | $ | — | | | | | $ | 1,686.5 | | |
Total liabilities at fair value | | | | $ | 1,731.9 | | | | | $ | 28.5 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (73.9) | | | | | $ | — | | | | | $ | 1,686.5 | | |
|
| | | March 31, 2017 | | |||||||||||||||||||||||||||
| | | Level 1 | | | Level 2 | | | Level 3 | | | Fair Value | | | Carrying Amount | | |||||||||||||||
Assetss(a) | | | | | | | |||||||||||||||||||||||||
Policy loans, included in funds withheld receivables | | | | $ | — | | | | | $ | — | | | | | $ | 8.3 | | | | | $ | 8.3 | | | | | $ | 8.3 | | |
Total financial assets | | | | $ | — | | | | | $ | — | | | | | $ | 8.3 | | | | | $ | 8.3 | | | | | $ | 8.3 | | |
|
| | | September 30, 2016 | | |||||||||||||||||||||||||||
| | | Level 1 | | | Level 2 | | | Level 3 | | | Fair Value | | | Carrying Amount | | |||||||||||||||
Assets(a) | | | | | | | |||||||||||||||||||||||||
Policy loans, included in funds withheld receivables | | | | $ | — | | | | | $ | — | | | | | $ | 8.5 | | | | | $ | 8.5 | | | | | $ | 8.5 | | |
Total financial assets | | | | $ | — | | | | | $ | — | | | | | $ | 8.5 | | | | | $ | 8.5 | | | | | $ | 8.5 | | |
|
| | | March 31, 2017 | | |||||||||||||||||||||||||||
| | | Cost or Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | | | Carrying Value | | |||||||||||||||
Funds withheld receivables with FGL | | | | | | | |||||||||||||||||||||||||
Corporates | | | | $ | 661.1 | | | | | $ | 10.0 | | | | | $ | (25.8) | | | | | $ | 645.3 | | | | | $ | 645.3 | | |
Asset/Mortgage-backed securities | | | | | 197.8 | | | | | | 1.1 | | | | | | (4.9) | | | | | | 194.0 | | | | | | 194.0 | | |
Municipals | | | | | 12.0 | | | | | | 0.1 | | | | | | (0.3) | | | | | | 11.8 | | | | | | 11.8 | | |
Government bonds | | | | | 1.1 | | | | | | — | | | | | | (0.1) | | | | | | 1.0 | | | | | | 1.0 | | |
Preferred stock | | | | | 8.5 | | | | | | 0.1 | | | | | | (0.4) | | | | | | 8.2 | | | | | | 8.2 | | |
Total funds withheld receivables with FGL | | | | | 880.5 | | | | | | 11.3 | | | | | | (31.5) | | | | | | 860.3 | | | | | | 860.3 | | |
Funds withheld receivables with third parties | | | | | | | |||||||||||||||||||||||||
Corporates | | | | | 404.4 | | | | | | 5.9 | | | | | | (7.2) | | | | | | 403.1 | | | | | | 403.1 | | |
Asset/Mortgage-backed securities | | | | | 135.4 | | | | | | 2.4 | | | | | | (1.1) | | | | | | 136.7 | | | | | | 136.7 | | |
Municipals | | | | | 56.2 | | | | | | 0.7 | | | | | | (0.4) | | | | | | 56.5 | | | | | | 56.5 | | |
Government bonds | | | | | 83.0 | | | | | | — | | | | | | (3.5) | | | | | | 79.5 | | | | | | 79.5 | | |
Agency bonds | | | | | 7.3 | | | | | | — | | | | | | — | | | | | | 7.3 | | | | | | 7.3 | | |
Total funds withheld receivables with third parties | | | | | 686.3 | | | | | | 9.0 | | | | | | (12.2) | | | | | | 683.1 | | | | | | 683.1 | | |
Total fixed maturity and equity securities included in funds withheld receivables | | | | | 1,566.8 | | | | | | 20.3 | | | | | | (43.7) | | | | | | 1,543.4 | | | | | | 1,543.4 | | |
Call option receivable from FGL included in funds withheld receivables | | | | | 8.9 | | | | | | 4.4 | | | | | | — | | | | | | 13.3 | | | | | | 13.3 | | |
Accrued interest | | | | | 17.0 | | | | | | — | | | | | | — | | | | | | 17.0 | | | | | | 17.0 | | |
Net receivables | | | | | 44.0 | | | | | | — | | | | | | — | | | | | | 44.0 | | | | | | 44.0 | | |
Policy loans and other | | | | | 8.3 | | | | | | — | | | | | | — | | | | | | 8.3 | | | | | | 8.3 | | |
Total funds withheld receivables | | | | $ | 1,645.0 | | | | | $ | 24.7 | | | | | $ | (43.7) | | | | | $ | 1,626.0 | | | | | $ | 1,626.0 | | |
|
| | | September 30, 2016 | | |||||||||||||||||||||||||||
| | | Cost or Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | | | Carrying Value | | |||||||||||||||
Funds withheld receivables with FGL | | | | | | | |||||||||||||||||||||||||
Corporates | | | | $ | 638.5 | | | | | $ | 18.2 | | | | | $ | (29.5) | | | | | $ | 627.2 | | | | | $ | 627.2 | | |
Asset/Mortgage-backed securities | | | | | 238.8 | | | | | | 0.6 | | | | | | (7.9) | | | | | | 231.5 | | | | | | 231.5 | | |
Municipals | | | | | 12.1 | | | | | | 0.7 | | | | | | — | | | | | | 12.8 | | | | | | 12.8 | | |
Government bonds | | | | | 1.1 | | | | | | — | | | | | | — | | | | | | 1.1 | | | | | | 1.1 | | |
Preferred stock | | | | | 8.8 | | | | | | 0.3 | | | | | | (0.9) | | | | | | 8.2 | | | | | | 8.2 | | |
Total funds withheld receivables with FGL | | | | | 899.3 | | | | | | 19.8 | | | | | | (38.3) | | | | | | 880.8 | | | | | | 880.8 | | |
Funds withheld receivables with third parties | | | | | | | |||||||||||||||||||||||||
Corporates | | | | | 390.0 | | | | | | 18.8 | | | | | | (2.7) | | | | | | 406.1 | | | | | | 406.1 | | |
Asset/Mortgage-backed securities | | | | | 118.7 | | | | | | 1.9 | | | | | | (1.7) | | | | | | 118.9 | | | | | | 118.9 | | |
Municipals | | | | | 49.5 | | | | | | 4.1 | | | | | | — | | | | | | 53.6 | | | | | | 53.6 | | |
Government bonds | | | | | 67.7 | | | | | | 1.3 | | | | | | (0.2) | | | | | | 68.8 | | | | | | 68.8 | | |
Agency bonds | | | | | 6.6 | | | | | | 0.3 | | | | | | — | | | | | | 6.9 | | | | | | 6.9 | | |
Total funds withheld receivables with third parties | | | | | 632.5 | | | | | | 26.4 | | | | | | (4.6) | | | | | | 654.3 | | | | | | 654.3 | | |
Total fixed maturity and equity securities included in funds withheld receivables | | | | | 1,531.8 | | | | | | 46.2 | | | | | | (42.9) | | | | | | 1,535.1 | | | | | | 1,535.1 | | |
Call option receivable from FGL included in funds withheld receivables | | | | | 9.8 | | | | | | 1.5 | | | | | | — | | | | | | 11.3 | | | | | | 11.3 | | |
Accrued interest | | | | | 17.8 | | | | | | — | | | | | | — | | | | | | 17.8 | | | | | | 17.8 | | |
Net receivables | | | | | 77.7 | | | | | | — | | | | | | — | | | | | | 77.7 | | | | | | 77.7 | | |
Policy loans and other | | | | | 8.5 | | | | | | — | | | | | | — | | | | | | 8.5 | | | | | | 8.5 | | |
Total funds withheld receivables | | | | $ | 1,645.6 | | | | | $ | 47.7 | | | | | $ | (42.9) | | | | | $ | 1,650.4 | | | | | $ | 1,650.4 | | |
|
| | | March 31, 2017 | | |||||||||
| | | Amortized Cost | | | Fair Value | | ||||||
Corporate, Non-structured Hybrids, Municipal and Preferred stock: | | | | ||||||||||
Due in one year or less | | | | $ | 18.6 | | | | | $ | 18.6 | | |
Due after one year through five years | | | | | 201.6 | | | | | | 198.0 | | |
Due after five years through ten years | | | | | 498.0 | | | | | | 496.2 | | |
Due after ten years | | | | | 496.3 | | | | | | 481.6 | | |
Subtotal | | | | | 1,214.5 | | | | | | 1,194.4 | | |
Other securities which provide for periodic payments: | | | | ||||||||||
Asset/Mortgage-backed securities | | | | | 333.2 | | | | | | 330.7 | | |
Structured hybrids | | | | | 19.1 | | | | | | 18.3 | | |
Total fixed maturity and equity securities included in funds withheld receivables | | | | $ | 1,566.8 | | | | | $ | 1,543.4 | | |
|
| | | Three months ended March 31, | | | Six months ended March 31, | | ||||||||||||||||||
| | | 2017 | | | 2016 | | | 2017 | | | 2016 | | ||||||||||||
Realized losses on available-for-sale securities not included in funds withheld receivables | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (0.5) | | |
Realized and unrealized (losses) gains on related party investments and other invested assets not included in funds withheld receivables | | | | | (0.3) | | | | | | — | | | | | | (3.7) | | | | | | 4.4 | | |
Realized and unrealized gains (losses) on derivative instruments not included in funds withheld receivables | | | | | 5.8 | | | | | | (1.4) | | | | | | 8.9 | | | | | | 0.5 | | |
Realized and unrealized gains (losses) on funds withheld receivables | | | | | 35.4 | | | | | | 41.7 | | | | | | 7.0 | | | | | | 24.2 | | |
Net investment gains (losses) | | | | $ | 40.9 | | | | | $ | 40.3 | | | | | $ | 12.2 | | | | | $ | 28.6 | | |
|
Description | | | Balance Sheet Classification | | | March 31, 2017 | | | September 30, 2016 | | ||||||
Assets: | | | | | ||||||||||||
HGI Energy Notes | | | Related party investments | | | | $ | 91.7 | | | | | $ | 91.0 | | |
Spectrum Brands(a) | | | Related party investments | | | | | 2.0 | | | | | | — | | |
Salus Preferred Equity | | | Related party investments | | | | | 1.2 | | | | | | 6.7 | | |
EIC Preferred Equity | | | Related party investments | | | | | — | | | | | | — | | |
Salus CLO | | | Related party investments | | | | | 0.3 | | | | | | 0.7 | | |
Funds withheld receivables with FGL | | | Funds withheld receivable | | | | | 930.4 | | | | | | 978.8 | | |
Liabilities: | | | | | ||||||||||||
Insurance reserves | | | Insurance reserves | | | | | 1,003.6 | | | | | | 1,054.1 | | |
Accounts payable to FGL | | | Other liabilities | | | | | — | | | | | | — | | |
Accounts payable to HRG | | | Other liabilities | | | | | 0.2 | | | | | | 0.2 | | |
| | | Three months ended March 31, | | | Six months ended March 31, | | ||||||||||||||||||
Statement of Operations | | | 2017 | | | 2016 | | | 2017 | | | 2016 | | ||||||||||||
Net investment income | | | | $ | — | | | | | $ | 0.7 | | | | | $ | 0.1 | | | | | $ | 1.5 | | |
Net investment gains (losses) | | | | | 26.5 | | | | | | 16.4 | | | | | | 21.5 | | | | | | 4.3 | | |
Benefits and other changes in policy reserves | | | | | 22.7 | | | | | | 15.7 | | | | | | 21.0 | | | | | | 6.4 | | |
Acquisition and operating expenses | | | | | 0.2 | | | | | | — | | | | | | 0.3 | | | | | | — | | |
| | | September 30, | | |||||||||
| | | 2016 | | | 2015 | | ||||||
ASSETS | | | | ||||||||||
Related party investments (Note 9) | | | | $ | 98.4 | | | | | $ | 75.4 | | |
Cash and cash equivalents | | | | | 32.1 | | | | | | 18.0 | | |
Funds withheld receivables at fair value (Note 6) | | | | | 1,650.4 | | | | | | 1,710.1 | | |
Income tax receivable | | | | | 16.5 | | | | | | 22.5 | | |
Deferred tax assets (Note 8) | | | | | — | | | | | | 23.6 | | |
Other assets (Note 7) | | | | | 19.0 | | | | | | 34.3 | | |
Total assets | | | | $ | 1,816.4 | | | | | $ | 1,883.9 | | |
LIABILITIES AND SHAREHOLDER’S EQUITY | | | | ||||||||||
Insurance reserves at fair value | | | | $ | 1,685.9 | | | | | $ | 1,731.9 | | |
Other liabilities | | | | | 9.9 | | | | | | 12.6 | | |
Total liabilities | | | | | 1,695.8 | | | | | | 1,744.5 | | |
Commitments and contingencies | | | | ||||||||||
Shareholder’s equity: | | | | ||||||||||
Common stock ($1 par value, 425,000 shares authorized, 377,400 shares issued and outstanding at September 30, 2016 and 2015) | | | | | 0.4 | | | | | | 0.4 | | |
Additional paid-in capital | | | | | 177.7 | | | | | | 178.0 | | |
Accumulated deficit | | | | | (57.7) | | | | | | (39.0) | | |
Accumulated other comprehensive income | | | | | 0.2 | | | | | | — | | |
Total shareholder’s equity | | | | | 120.6 | | | | | | 139.4 | | |
Total liabilities and shareholder’s equity | | | | $ | 1,816.4 | | | | | $ | 1,883.9 | | |
|
| | | Year ended September 30, | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Revenues: | | | | | |||||||||||||||
Net investment income | | | | $ | 2.4 | | | | | $ | 8.9 | | | | | $ | 9.3 | | |
Net investment gains (losses) | | | | | 148.0 | | | | | | (107.7) | | | | | | 135.0 | | |
Total revenues | | | | | 150.4 | | | | | | (98.8) | | | | | | 144.3 | | |
Benefits and expenses: | | | | | |||||||||||||||
Benefits and other changes in policy reserves | | | | | 153.2 | | | | | | (43.5) | | | | | | 92.8 | | |
Acquisition and operating expenses | | | | | 9.7 | | | | | | 13.4 | | | | | | 11.4 | | |
Total benefits and expenses | | | | | 162.9 | | | | | | (30.1) | | | | | | 104.2 | | |
Operating (loss) income | | | | | (12.5) | | | | | | (68.7) | | | | | | 40.1 | | |
(Loss) income before income taxes | | | | | (12.5) | | | | | | (68.7) | | | | | | 40.1 | | |
Income tax expense (benefit) | | | | | 6.2 | | | | | | (24.0) | | | | | | 15.7 | | |
Net (loss) income | | | | $ | (18.7) | | | | | $ | (44.7) | | | | | $ | 24.4 | | |
Other comprehensive income: | | | | | |||||||||||||||
Unrealized investment gains: | | | | | |||||||||||||||
Changes in unrealized investment gains before reclassification adjustment | | | | $ | 0.3 | | | | | $ | — | | | | | $ | — | | |
Changes in unrealized investment gains after reclassification adjustment | | | | | 0.3 | | | | | | — | | | | | | — | | |
Changes in deferred income tax asset/liability | | | | | (0.1) | | | | | | — | | | | | | — | | |
Net unrealized gains on investments | | | | | 0.2 | | | | | | — | | | | | | — | | |
Net change to derive comprehensive income for the period | | | | | 0.2 | | | | | | — | | | | | | — | | |
Comprehensive (loss) income | | | | $ | (9.9) | | | | | $ | (44.7) | | | | | $ | 24.4 | | |
|
| | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive Income | | | Total Shareholder’s Equity | | |||||||||||||||
Balances at September 30, 2013 | | | | $ | 0.4 | | | | | $ | 166.2 | | | | | $ | (18.7) | | | | | $ | — | | | | | $ | 147.9 | | |
Net income | | | | | — | | | | | | — | | | | | | 24.4 | | | | | | — | | | | | | 24.4 | | |
Comprehensive income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 24.4 | | |
Capital distributions | | | | | — | | | | | | (12.2) | | | | | | — | | | | | | — | | | | | | (12.2) | | |
Balances at September 30, 2014 | | | | | 0.4 | | | | | | 154.0 | | | | | | 5.7 | | | | | | — | | | | | | 160.1 | | |
Net Loss | | | | | — | | | | | | — | | | | | | (44.7) | | | | | | — | | | | | | (44.7) | | |
Comprehensive loss | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (44.7) | | |
Capital contributions | | | | | — | | | | | | 24.0 | | | | | | — | | | | | | — | | | | | | 24.0 | | |
Balances at September 30, 2015 | | | | | 0.4 | | | | | | 178.0 | | | | | | (39.0) | | | | | | — | | | | | | 139.4 | | |
Net loss | | | | | — | | | | | | — | | | | | | (18.7) | | | | | | — | | | | | | (18.7) | | |
Unrealized investment gains, net | | | | | — | | | | | | — | | | | | | — | | | | | | 0.2 | | | | | | 0.2 | | |
Comprehensive loss | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (18.5) | | |
Stock Compensation | | | | | — | | | | | | (0.3) | | | | | | — | | | | | | — | | | | | | (0.3) | | |
Balance at September 30, 2016 | | | | $ | 0.4 | | | | | $ | 177.7 | | | | | $ | (57.7) | | | | | $ | 0.2 | | | | | $ | 120.6 | | |
|
| | | Fiscal | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Cash flows from operating activities: | | | | | |||||||||||||||
Net (loss) income | | | | $ | (18.7) | | | | | $ | (44.7) | | | | | $ | 24.4 | | |
Adjustments to reconcile net (loss) income to operating cash flows: | | | | | | | | | | | | | | | | | | | |
Deferred income taxes | | | | | 23.6 | | | | | | (7.7) | | | | | | 6.3 | | |
Net recognized gains (losses) on investments and derivatives | | | | | 4.5 | | | | | | 57.0 | | | | | | (20.3) | | |
Changes in operating assets and liabilities | | | | | (21.1) | | | | | | (73.3) | | | | | | (26.1) | | |
Net change in cash due to operating activities | | | | | (11.7) | | | | | | (68.7) | | | | | | (15.7) | | |
Cash flows from investing activities: | | | | | |||||||||||||||
Proceeds from investments, sold, matured or repaid | | | | | 33.0 | | | | | | 16.9 | | | | | | 78.7 | | |
Cost of investments acquired | | | | | (7.2) | | | | | | (9.4) | | | | | | (37.1) | | |
Net change in cash due to investing activities | | | | | 25.8 | | | | | | 7.5 | | | | | | 41.6 | | |
Cash flows from financing activities: | | | | | |||||||||||||||
Capital contributions | | | | | — | | | | | | 24.0 | | | | | | — | | |
Dividends paid | | | | | — | | | | | | — | | | | | | (12.2) | | |
Net change in cash due to financing activities | | | | | — | | | | | | 24.0 | | | | | | (12.2) | | |
Net change in cash and cash equivalents | | | | | 14.1 | | | | | | (37.2) | | | | | | 13.7 | | |
Cash and cash equivalents at beginning of period | | | | | 18.0 | | | | | | 55.2 | | | | | | 41.5 | | |
Cash and cash equivalents at end of period | | | | $ | 32.1 | | | | | $ | 18.0 | | | | | $ | 55.2 | | |
Supplemental disclosures of cash flow information | | | | | |||||||||||||||
Taxes paid during the year | | | | $ | — | | | | | $ | 6.6 | | | | | $ | 16.0 | | |
Taxes received during the year | | | | | 21.9 | | | | | | — | | | | | | — | | |
Description | | | Balance Sheet Classification | | | March 31, 2017 | | | September 30, 2016 | | ||||||
Assets: | | | | | ||||||||||||
HGI Energy Notes | | | Related party investments | | | | $ | 91.7 | | | | | $ | 91.0 | | |
Spectrum Brands(a) | | | Related party investments | | | | | 2.0 | | | | | | — | | |
Salus Preferred Equity | | | Related party investments | | | | | 1.2 | | | | | | 6.7 | | |
EIC Preferred Equity | | | Related party investments | | | | | — | | | | | | — | | |
Salus CLO | | | Related party investments | | | | | 0.3 | | | | | | 0.7 | | |
Funds withheld receivables with FGL | | | Funds withheld receivable | | | | | 930.4 | | | | | | 978.8 | | |
Liabilities: | | | | | ||||||||||||
Insurance reserves | | | Insurance reserves | | | | | 1,003.6 | | | | | | 1,054.1 | | |
Accounts payable to FGL | | | Other liabilities | | | | | — | | | | | | — | | |
Accounts payable to HRG | | | Other liabilities | | | | | 0.2 | | | | | | 0.2 | | |
| | | Three months ended March 31, | | | Six months ended March 31, | | ||||||||||||||||||
Statement of Operations | | | 2017 | | | 2016 | | | 2017 | | | 2016 | | ||||||||||||
Net investment income | | | | $ | — | | | | | $ | 0.7 | | | | | $ | 0.1 | | | | | $ | 1.5 | | |
Net investment gains (losses) | | | | | 26.5 | | | | | | 16.4 | | | | | | 21.5 | | | | | | 4.3 | | |
Benefits and other changes in policy reserves | | | | | 22.7 | | | | | | 15.7 | | | | | | 21.0 | | | | | | 6.4 | | |
Acquisition and operating expenses | | | | | 0.2 | | | | | | — | | | | | | 0.3 | | | | | | — | | |
| | | September 30, | | |||||||||
| | | 2016 | | | 2015 | | ||||||
ASSETS | | | | ||||||||||
Related party investments (Note 9) | | | | $ | 98.4 | | | | | $ | 75.4 | | |
Cash and cash equivalents | | | | | 32.1 | | | | | | 18.0 | | |
Funds withheld receivables at fair value (Note 6) | | | | | 1,650.4 | | | | | | 1,710.1 | | |
Income tax receivable | | | | | 16.5 | | | | | | 22.5 | | |
Deferred tax assets (Note 8) | | | | | — | | | | | | 23.6 | | |
Other assets (Note 7) | | | | | 19.0 | | | | | | 34.3 | | |
Total assets | | | | $ | 1,816.4 | | | | | $ | 1,883.9 | | |
LIABILITIES AND SHAREHOLDER’S EQUITY | | | | ||||||||||
Insurance reserves at fair value | | | | $ | 1,685.9 | | | | | $ | 1,731.9 | | |
Other liabilities | | | | | 9.9 | | | | | | 12.6 | | |
Total liabilities | | | | | 1,695.8 | | | | | | 1,744.5 | | |
Commitments and contingencies | | | | ||||||||||
Shareholder’s equity: | | | | ||||||||||
Common stock ($1 par value, 425,000 shares authorized, 377,400 shares issued and outstanding at September 30, 2016 and 2015) | | | | | 0.4 | | | | | | 0.4 | | |
Additional paid-in capital | | | | | 177.7 | | | | | | 178.0 | | |
Accumulated deficit | | | | | (57.7) | | | | | | (39.0) | | |
Accumulated other comprehensive income | | | | | 0.2 | | | | | | — | | |
Total shareholder’s equity | | | | | 120.6 | | | | | | 139.4 | | |
Total liabilities and shareholder’s equity | | | | $ | 1,816.4 | | | | | $ | 1,883.9 | | |
|
| | | Year ended September 30, | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Revenues: | | | | | |||||||||||||||
Net investment income | | | | $ | 2.4 | | | | | $ | 8.9 | | | | | $ | 9.3 | | |
Net investment gains (losses) | | | | | 148.0 | | | | | | (107.7) | | | | | | 135.0 | | |
Total revenues | | | | | 150.4 | | | | | | (98.8) | | | | | | 144.3 | | |
Benefits and expenses: | | | | | |||||||||||||||
Benefits and other changes in policy reserves | | | | | 153.2 | | | | | | (43.5) | | | | | | 92.8 | | |
Acquisition and operating expenses | | | | | 9.7 | | | | | | 13.4 | | | | | | 11.4 | | |
Total benefits and expenses | | | | | 162.9 | | | | | | (30.1) | | | | | | 104.2 | | |
Operating (loss) income | | | | | (12.5) | | | | | | (68.7) | | | | | | 40.1 | | |
(Loss) income before income taxes | | | | | (12.5) | | | | | | (68.7) | | | | | | 40.1 | | |
Income tax expense (benefit) | | | | | 6.2 | | | | | | (24.0) | | | | | | 15.7 | | |
Net (loss) income | | | | $ | (18.7) | | | | | $ | (44.7) | | | | | $ | 24.4 | | |
Other comprehensive income: | | | | | |||||||||||||||
Unrealized investment gains: | | | | | |||||||||||||||
Changes in unrealized investment gains before reclassification adjustment | | | | $ | 0.3 | | | | | $ | — | | | | | $ | — | | |
Changes in unrealized investment gains after reclassification adjustment | | | | | 0.3 | | | | | | — | | | | | | — | | |
Changes in deferred income tax asset/liability | | | | | (0.1) | | | | | | — | | | | | | — | | |
Net unrealized gains on investments | | | | | 0.2 | | | | | | — | | | | | | — | | |
Net change to derive comprehensive income for the period | | | | | 0.2 | | | | | | — | | | | | | — | | |
Comprehensive (loss) income | | | | $ | (9.9) | | | | | $ | (44.7) | | | | | $ | 24.4 | | |
|
| | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive Income | | | Total Shareholder’s Equity | | |||||||||||||||
Balances at September 30, 2013 | | | | $ | 0.4 | | | | | $ | 166.2 | | | | | $ | (18.7) | | | | | $ | — | | | | | $ | 147.9 | | |
Net income | | | | | — | | | | | | — | | | | | | 24.4 | | | | | | — | | | | | | 24.4 | | |
Comprehensive income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 24.4 | | |
Capital distributions | | | | | — | | | | | | (12.2) | | | | | | — | | | | | | — | | | | | | (12.2) | | |
Balances at September 30, 2014 | | | | | 0.4 | | | | | | 154.0 | | | | | | 5.7 | | | | | | — | | | | | | 160.1 | | |
Net Loss | | | | | — | | | | | | — | | | | | | (44.7) | | | | | | — | | | | | | (44.7) | | |
Comprehensive loss | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (44.7) | | |
Capital contributions | | | | | — | | | | | | 24.0 | | | | | | — | | | | | | — | | | | | | 24.0 | | |
Balances at September 30, 2015 | | | | | 0.4 | | | | | | 178.0 | | | | | | (39.0) | | | | | | — | | | | | | 139.4 | | |
Net loss | | | | | — | | | | | | — | | | | | | (18.7) | | | | | | — | | | | | | (18.7) | | |
Unrealized investment gains, net | | | | | — | | | | | | — | | | | | | — | | | | | | 0.2 | | | | | | 0.2 | | |
Comprehensive loss | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (18.5) | | |
Stock Compensation | | | | | — | | | | | | (0.3) | | | | | | — | | | | | | — | | | | | | (0.3) | | |
Balance at September 30, 2016 | | | | $ | 0.4 | | | | | $ | 177.7 | | | | | $ | (57.7) | | | | | $ | 0.2 | | | | | $ | 120.6 | | |
|
| | | Fiscal | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Cash flows from operating activities: | | | | | |||||||||||||||
Net (loss) income | | | | $ | (18.7) | | | | | $ | (44.7) | | | | | $ | 24.4 | | |
Adjustments to reconcile net (loss) income to operating cash flows: | | | | | | | | | | | | | | | | | | | |
Deferred income taxes | | | | | 23.6 | | | | | | (7.7) | | | | | | 6.3 | | |
Net recognized gains (losses) on investments and derivatives | | | | | 4.5 | | | | | | 57.0 | | | | | | (20.3) | | |
Changes in operating assets and liabilities | | | | | (21.1) | | | | | | (73.3) | | | | | | (26.1) | | |
Net change in cash due to operating activities | | | | | (11.7) | | | | | | (68.7) | | | | | | (15.7) | | |
Cash flows from investing activities: | | | | | |||||||||||||||
Proceeds from investments, sold, matured or repaid | | | | | 33.0 | | | | | | 16.9 | | | | | | 78.7 | | |
Cost of investments acquired | | | | | (7.2) | | | | | | (9.4) | | | | | | (37.1) | | |
Net change in cash due to investing activities | | | | | 25.8 | | | | | | 7.5 | | | | | | 41.6 | | |
Cash flows from financing activities: | | | | | |||||||||||||||
Capital contributions | | | | | — | | | | | | 24.0 | | | | | | — | | |
Dividends paid | | | | | — | | | | | | — | | | | | | (12.2) | | |
Net change in cash due to financing activities | | | | | — | | | | | | 24.0 | | | | | | (12.2) | | |
Net change in cash and cash equivalents | | | | | 14.1 | | | | | | (37.2) | | | | | | 13.7 | | |
Cash and cash equivalents at beginning of period | | | | | 18.0 | | | | | | 55.2 | | | | | | 41.5 | | |
Cash and cash equivalents at end of period | | | | $ | 32.1 | | | | | $ | 18.0 | | | | | $ | 55.2 | | |
Supplemental disclosures of cash flow information | | | | | |||||||||||||||
Taxes paid during the year | | | | $ | — | | | | | $ | 6.6 | | | | | $ | 16.0 | | |
Taxes received during the year | | | | | 21.9 | | | | | | — | | | | | | — | | |
Description | | | Balance Sheet Classification | | | March 31, 2017 | | | September 30, 2016 | | ||||||
Assets: | | | | | ||||||||||||
HGI Energy Notes | | | Related party investments | | | | $ | 91.7 | | | | | $ | 91.0 | | |
Spectrum Brands(a) | | | Related party investments | | | | | 2.0 | | | | | | — | | |
Salus Preferred Equity | | | Related party investments | | | | | 1.2 | | | | | | 6.7 | | |
EIC Preferred Equity | | | Related party investments | | | | | — | | | | | | — | | |
Salus CLO | | | Related party investments | | | | | 0.3 | | | | | | 0.7 | | |
Funds withheld receivables with FGL | | | Funds withheld receivable | | | | | 930.4 | | | | | | 978.8 | | |
Liabilities: | | | | | ||||||||||||
Insurance reserves | | | Insurance reserves | | | | | 1,003.6 | | | | | | 1,054.1 | | |
Accounts payable to FGL | | | Other liabilities | | | | | — | | | | | | — | | |
Accounts payable to HRG | | | Other liabilities | | | | | 0.2 | | | | | | 0.2 | | |
| | | Three months ended March 31, | | | Six months ended March 31, | | ||||||||||||||||||
Statement of Operations | | | 2017 | | | 2016 | | | 2017 | | | 2016 | | ||||||||||||
Net investment income | | | | $ | — | | | | | $ | 0.7 | | | | | $ | 0.1 | | | | | $ | 1.5 | | |
Net investment gains (losses) | | | | | 26.5 | | | | | | 16.4 | | | | | | 21.5 | | | | | | 4.3 | | |
Benefits and other changes in policy reserves | | | | | 22.7 | | | | | | 15.7 | | | | | | 21.0 | | | | | | 6.4 | | |
Acquisition and operating expenses | | | | | 0.2 | | | | | | — | | | | | | 0.3 | | | | | | — | | |
| | | September 30, | | |||||||||
| | | 2016 | | | 2015 | | ||||||
ASSETS | | | | ||||||||||
Related party investments (Note 9) | | | | $ | 98.4 | | | | | $ | 75.4 | | |
Cash and cash equivalents | | | | | 32.1 | | | | | | 18.0 | | |
Funds withheld receivables at fair value (Note 6) | | | | | 1,650.4 | | | | | | 1,710.1 | | |
Income tax receivable | | | | | 16.5 | | | | | | 22.5 | | |
Deferred tax assets (Note 8) | | | | | — | | | | | | 23.6 | | |
Other assets (Note 7) | | | | | 19.0 | | | | | | 34.3 | | |
Total assets | | | | $ | 1,816.4 | | | | | $ | 1,883.9 | | |
LIABILITIES AND SHAREHOLDER’S EQUITY | | | | ||||||||||
Insurance reserves at fair value | | | | $ | 1,685.9 | | | | | $ | 1,731.9 | | |
Other liabilities | | | | | 9.9 | | | | | | 12.6 | | |
Total liabilities | | | | | 1,695.8 | | | | | | 1,744.5 | | |
Commitments and contingencies | | | | ||||||||||
Shareholder’s equity: | | | | ||||||||||
Common stock ($1 par value, 425,000 shares authorized, 377,400 shares issued and outstanding at September 30, 2016 and 2015) | | | | | 0.4 | | | | | | 0.4 | | |
Additional paid-in capital | | | | | 177.7 | | | | | | 178.0 | | |
Accumulated deficit | | | | | (57.7) | | | | | | (39.0) | | |
Accumulated other comprehensive income | | | | | 0.2 | | | | | | — | | |
Total shareholder’s equity | | | | | 120.6 | | | | | | 139.4 | | |
Total liabilities and shareholder’s equity | | | | $ | 1,816.4 | | | | | $ | 1,883.9 | | |
|
| | | Year ended September 30, | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Revenues: | | | | | |||||||||||||||
Net investment income | | | | $ | 2.4 | | | | | $ | 8.9 | | | | | $ | 9.3 | | |
Net investment gains (losses) | | | | | 148.0 | | | | | | (107.7) | | | | | | 135.0 | | |
Total revenues | | | | | 150.4 | | | | | | (98.8) | | | | | | 144.3 | | |
Benefits and expenses: | | | | | |||||||||||||||
Benefits and other changes in policy reserves | | | | | 153.2 | | | | | | (43.5) | | | | | | 92.8 | | |
Acquisition and operating expenses | | | | | 9.7 | | | | | | 13.4 | | | | | | 11.4 | | |
Total benefits and expenses | | | | | 162.9 | | | | | | (30.1) | | | | | | 104.2 | | |
Operating (loss) income | | | | | (12.5) | | | | | | (68.7) | | | | | | 40.1 | | |
(Loss) income before income taxes | | | | | (12.5) | | | | | | (68.7) | | | | | | 40.1 | | |
Income tax expense (benefit) | | | | | 6.2 | | | | | | (24.0) | | | | | | 15.7 | | |
Net (loss) income | | | | $ | (18.7) | | | | | $ | (44.7) | | | | | $ | 24.4 | | |
Other comprehensive income: | | | | | |||||||||||||||
Unrealized investment gains: | | | | | |||||||||||||||
Changes in unrealized investment gains before reclassification adjustment | | | | $ | 0.3 | | | | | $ | — | | | | | $ | — | | |
Changes in unrealized investment gains after reclassification adjustment | | | | | 0.3 | | | | | | — | | | | | | — | | |
Changes in deferred income tax asset/liability | | | | | (0.1) | | | | | | — | | | | | | — | | |
Net unrealized gains on investments | | | | | 0.2 | | | | | | — | | | | | | — | | |
Net change to derive comprehensive income for the period | | | | | 0.2 | | | | | | — | | | | | | — | | |
Comprehensive (loss) income | | | | $ | (9.9) | | | | | $ | (44.7) | | | | | $ | 24.4 | | |
|
| | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive Income | | | Total Shareholder’s Equity | | |||||||||||||||
Balances at September 30, 2013 | | | | $ | 0.4 | | | | | $ | 166.2 | | | | | $ | (18.7) | | | | | $ | — | | | | | $ | 147.9 | | |
Net income | | | | | — | | | | | | — | | | | | | 24.4 | | | | | | — | | | | | | 24.4 | | |
Comprehensive income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 24.4 | | |
Capital distributions | | | | | — | | | | | | (12.2) | | | | | | — | | | | | | — | | | | | | (12.2) | | |
Balances at September 30, 2014 | | | | | 0.4 | | | | | | 154.0 | | | | | | 5.7 | | | | | | — | | | | | | 160.1 | | |
Net Loss | | | | | — | | | | | | — | | | | | | (44.7) | | | | | | — | | | | | | (44.7) | | |
Comprehensive loss | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (44.7) | | |
Capital contributions | | | | | — | | | | | | 24.0 | | | | | | — | | | | | | — | | | | | | 24.0 | | |
Balances at September 30, 2015 | | | | | 0.4 | | | | | | 178.0 | | | | | | (39.0) | | | | | | — | | | | | | 139.4 | | |
Net loss | | | | | — | | | | | | — | | | | | | (18.7) | | | | | | — | | | | | | (18.7) | | |
Unrealized investment gains, net | | | | | — | | | | | | — | | | | | | — | | | | | | 0.2 | | | | | | 0.2 | | |
Comprehensive loss | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (18.5) | | |
Stock Compensation | | | | | — | | | | | | (0.3) | | | | | | — | | | | | | — | | | | | | (0.3) | | |
Balance at September 30, 2016 | | | | $ | 0.4 | | | | | $ | 177.7 | | | | | $ | (57.7) | | | | | $ | 0.2 | | | | | $ | 120.6 | | |
|
| | | Fiscal | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Cash flows from operating activities: | | | | | |||||||||||||||
Net (loss) income | | | | $ | (18.7) | | | | | $ | (44.7) | | | | | $ | 24.4 | | |
Adjustments to reconcile net (loss) income to operating cash flows: | | | | | | | | | | | | | | | | | | | |
Deferred income taxes | | | | | 23.6 | | | | | | (7.7) | | | | | | 6.3 | | |
Net recognized gains (losses) on investments and derivatives | | | | | 4.5 | | | | | | 57.0 | | | | | | (20.3) | | |
Changes in operating assets and liabilities | | | | | (21.1) | | | | | | (73.3) | | | | | | (26.1) | | |
Net change in cash due to operating activities | | | | | (11.7) | | | | | | (68.7) | | | | | | (15.7) | | |
Cash flows from investing activities: | | | | | |||||||||||||||
Proceeds from investments, sold, matured or repaid | | | | | 33.0 | | | | | | 16.9 | | | | | | 78.7 | | |
Cost of investments acquired | | | | | (7.2) | | | | | | (9.4) | | | | | | (37.1) | | |
Net change in cash due to investing activities | | | | | 25.8 | | | | | | 7.5 | | | | | | 41.6 | | |
Cash flows from financing activities: | | | | | |||||||||||||||
Capital contributions | | | | | — | | | | | | 24.0 | | | | | | — | | |
Dividends paid | | | | | — | | | | | | — | | | | | | (12.2) | | |
Net change in cash due to financing activities | | | | | — | | | | | | 24.0 | | | | | | (12.2) | | |
Net change in cash and cash equivalents | | | | | 14.1 | | | | | | (37.2) | | | | | | 13.7 | | |
Cash and cash equivalents at beginning of period | | | | | 18.0 | | | | | | 55.2 | | | | | | 41.5 | | |
Cash and cash equivalents at end of period | | | | $ | 32.1 | | | | | $ | 18.0 | | | | | $ | 55.2 | | |
Supplemental disclosures of cash flow information | | | | | |||||||||||||||
Taxes paid during the year | | | | $ | — | | | | | $ | 6.6 | | | | | $ | 16.0 | | |
Taxes received during the year | | | | | 21.9 | | | | | | — | | | | | | — | | |
| | | Purchase Price | | |||
Cash paid at November 3, 2014 close | | | | $ | 17.9 | | |
Cash purchase price adjustments | | | | | (1.5) | | |
Contingent consideration premium increase benefit | | | | | 2.8 | | |
Total purchase price | | | | $ | 19.2 | | |
|
| | | Purchase Price Allocation | | |||
Cash and cash equivalents | | | | $ | 8.5 | | |
Funds withheld receivables | | | | | 359.5 | | |
Insurance reserves | | | | | (346.9) | | |
Other liabilities | | | | | (1.9) | | |
Total net assets acquired | | | | $ | 19.2 | | |
|
| | | | | | September 30, | | |||||||||
Derivatives not designated as hedging instruments: | | | Classification | | | 2016 | | | 2015 | | ||||||
Assets: | | | | | ||||||||||||
Call option receivable from FGL | | | Funds withheld receivables | | | | $ | 11.3 | | | | | $ | 5.4 | | |
Call options | | | Other assets | | | | | 5.9 | | | | | | 1.0 | | |
| | | | | | | $ | 17.2 | | | | | $ | 6.4 | | |
|
| | | | | | Fiscal | | |||||||||||||||
Classification | | | Derivatives Not Designated as Hedging Instruments | | | 2016 | | | 2015 | | | 2014 | | |||||||||
Revenues: | | | | | | |||||||||||||||||
Net investment gains (losses) | | | Call options | | | | $ | 3.8 | | | | | $ | (7.6) | | | | | $ | 25.7 | | |
| | | September 30, 2016 | | | September 30, 2015 | | ||||||||||||||||||||||||||||||||||||||||||
| | | Level 1 | | | Level 2 | | | Level 3 | | | Fair Value | | | Level 1 | | | Level 2 | | | Level 3 | | | Fair Value | | ||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Fixed maturity and equity securities included in funds withheld receivables | | | | $ | 69.9 | | | | | $ | 1,387.1 | | | | | $ | 78.1 | | | | | $ | 1,535.1 | | | | | $ | 8.4 | | | | | $ | 1,555.0 | | | | | $ | 74.7 | | | | | $ | 1,638.1 | | |
Call option receivable from FGL included in funds withheld receivables | | | | | — | | | | | | 11.3 | | | | | | — | | | | | | 11.3 | | | | | | — | | | | | | 5.4 | | | | | | — | | | | | | 5.4 | | |
Related party investments | | | | | — | | | | | | — | | | | | | 98.4 | | | | | | 98.4 | | | | | | — | | | | | | 7.0 | | | | | | 61.7 | | | | | | 68.7 | | |
Corporate fixed maturity securities included in other assets | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 14.1 | | | | | | 14.1 | | |
Other invested assets included in other assets | | | | | — | | | | | | — | | | | | | 5.5 | | | | | | 5.5 | | | | | | — | | | | | | — | | | | | | 2.8 | | | | | | 2.8 | | |
Total financial assets | | | | $ | 69.9 | | | | | $ | 1,398.4 | | | | | $ | 182.0 | | | | | $ | 1,650.3 | | | | | $ | 8.4 | | | | | $ | 1,567.4 | | | | | $ | 153.3 | | | | | $ | 1,729.1 | | |
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves | | | | $ | — | | | | | $ | — | | | | | $ | 1,685.9 | | | | | $ | 1,685.9 | | | | | $ | — | | | | | $ | — | | | | | $ | 1,731.9 | | | | | $ | 1,731.9 | | |
Total financial liabilities | | | | $ | — | | | | | $ | — | | | | | $ | 1,685.9 | | | | | $ | 1,685.9 | | | | | $ | — | | | | | $ | — | | | | | $ | 1,731.9 | | | | | $ | 1,731.9 | | |
|
| | | Fair Value at | | | | | | | | | Range (Weighted average) | | ||||||||||||
Assets | | | September 30, 2016 | | | September 30, 2015 | | | Valuation Technique | | | Unobservable Input(s) | | | September 30, 2016 | | | September 30, 2015 | | ||||||
Corporate fixed maturity securities included in other assets | | | | $ | — | | | | | $ | 14.1 | | | | Broker-quoted | | | Offered quotes | | | —% | | | 83% | |
Related party investments − HGI Energy | | | | | 91.0 | | | | | | 50.0 | | | | Discounted Cash Flow | | | Discount rate | | | 0.79% | | | 9% | |
Related party investments − Salus preferred equity | | | | | 6.7 | | | | | | 10.4 | | | | Market- approach | | | Yield | | | 11% | | | 11% | |
| | | | | | | | | | | | | | | | | | RadioShack Corp. Recovery | | | 5.5% | | | 30% | |
| | | | | | | | | | | | | | | | | | Discount Rate | | | 15% | | | 15% | |
| | | | | | | | | | | | | | | | | | Salus CLO Equity | | | 28.4% | | | 41.8% | |
Related party investments − Salus CLO equity tranche | | | | | 0.7 | | | | | | 1.3 | | | | Third party valuation | | | Offered quote | | | 28.4% | | | 41.8% | |
| | | | | | | | | | | | | | | | | | Discount rate | | | 15% | | | 15% | |
| | | | | | | | | | | | | | | | | | Constant default rate | | | — | | | 2% | |
| | | | | | | | | | | | | | | | | | RSH Recovery | | | 5.5% | | | 30% | |
| | | | | | | | | | | | | | | | | | Other loan recoveries | | | 0% – 100% | | | 4% – 100% | |
| | | Fair Value at | | | | | | | | | Range (Weighted average) | | ||||||||||||
Assets | | | September 30, 2016 | | | September 30, 2015 | | | Valuation Technique | | | Unobservable Input(s) | | | September 30, 2016 | | | September 30, 2015 | | ||||||
Other invested assets included in other assets | | | | | 5.5 | | | | | | 2.8 | | | | Discounted Cash Flow | | | Probability of collection | | | 100% | | | 50% | |
| | | | | | | | | | | | | | | | | | Discount rate | | | 10% | | | 10% | |
Funds withheld receivables: | | | | | | | | ||||||||||||||||||
Fixed maturity and equity securities | | | | | 35.2 | | | | | | 39.1 | | | | Matrix pricing | | | Quoted prices | | | 98% – 122% (109%) | | | 100% – 122% (112%) | |
Fixed maturity securities | | | | | 5.4 | | | | | | 19.2 | | | | Loan Recovery Value | | | Recovery rate | | | 56% – 100% (82%) | | | 6% – 12% (8%) | |
Fixed maturity securities | | | | | 35.7 | | | | | | 6.7 | | | | Broker-quoted | | | Offered quotes | | | 97% – 100% (100%) | | | 99% – 103% (101%) | |
Loan participations | | | | | 1.8 | | | | | | 9.7 | | | | Loan Recovery Value | | | Recovery rate | | | 52% – 100% (71%) | | | 100% | |
Total | | | | $ | 182.0 | | | | | $ | 153.3 | | | | | | | ||||||||
Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
Insurance reserves | | | | $ | 1,685.9 | | | | | $ | 1,731.9 | | | | Discounted cash flow | | | Non-performance risk spread | | | 0.32% | | | 0.16% – 0.46% | |
| | | | | | | | | | | | | | | | | | Risk margin to reflect uncertainty | | | 0.50% | | | 0.50% – 1.00% | |
Total | | | | $ | 1,685.9 | | | | | $ | 1,731.9 | | | | | | | ||||||||
|
| | | Fiscal 2016 | | |||||||||||||||||||||||||||||||||||||||||||||
| | | Balance at Beginning of Period | | | Total Gains (Losses) | | | Purchases | | | Sales | | | Settlements | | | Net Transfer In (Out) of Level 3s(a) | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Corporate fixed maturity securities | | | | $ | 14.1 | | | | | $ | (0.5) | | | | | $ | — | | | | | $ | — | | | | | $ | (13.6) | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Related party investments | | | | | 61.7 | | | | | | (9.3) | | | | | | — | | | | | | 46.0 | | | | | | — | | | | | | — | | | | | | — | | | | | | 98.4 | | |
Other invested assets included in other assets | | | | | 2.8 | | | | | | 2.7 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5.5 | | |
Funds withheld receivables | | | | | 74.7 | | | | | | (3.6) | | | | | | — | | | | | | 36.2 | | | | | | (34.4) | | | | | | — | | | | | | 5.2 | | | | | | 78.1 | | |
Total assets at fair value | | | | $ | 153.3 | | | | | $ | (10.7) | | | | | $ | — | | | | | $ | 82.2 | | | | | $ | (48.0) | | | | | $ | — | | | | | $ | 5.2 | | | | | $ | 182.0 | | |
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves | | | | $ | 1,731.9 | | | | | $ | 162.7 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (208.7) | | | | | $ | — | | | | | $ | 1,685.9 | | |
Total liabilities at fair value | | | | $ | 1,731.9 | | | | | $ | 162.7 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (208.7) | | | | | $ | — | | | | | $ | 1,685.9 | | |
|
| | | Fiscal 2015 | | |||||||||||||||||||||||||||||||||||||||||||||
| | | Balance at Beginning of Period | | | Total Gains (Losses) | | | Purchases | | | Sales | | | Settlements | | | Net Transfer In (Out) of Level 3(a) | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Corporate fixed maturity securities | | | | $ | 16.3 | | | | | $ | (2.2) | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 14.1 | | |
Related party investments | | | | | 115.2 | | | | | | (56.2) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2.7 | | | | | | 61.7 | | |
Other invested assets included in other assets | | | | | — | | | | | | (16.3) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 19.1 | | | | | | 2.8 | | |
Funds withheld receivables | | | | | 58.9 | | | | | | (0.5) | | | | | | — | | | | | | 30.4 | | | | | | (14.1) | | | | | | — | | | | | | — | | | | | | 74.7 | | |
Total assets at fair value | | | | $ | 190.4 | | | | | $ | (75.2) | | | | | $ | — | | | | | $ | 30.4 | | | | | $ | (14.1) | | | | | $ | — | | | | | $ | 21.8 | | | | | $ | 153.3 | | |
|
| | | Balance at Beginning of Period | | | Total (Gains) Losses | | | Purchases | | | Sales | | | Settlements | | | Net transfer In (Out) of Level 3 | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves | | | | $ | 1,408.9 | | | | | $ | (46.2) | | | | | $ | — | | | | | $ | 444.7 | | | | | $ | — | | | | | $ | (75.5) | | | | | $ | — | | | | | $ | 1,731.9 | | |
Total liabilities at fair value | | | | $ | 1,408.9 | | | | | $ | (46.2) | | | | | $ | — | | | | | $ | 444.7 | | | | | $ | — | | | | | $ | (75.5) | | | | | $ | — | | | | | $ | 1,731.9 | | |
|
| | | Fiscal 2014 | | |||||||||||||||||||||||||||||||||||||||||||||
| | | Balance at Beginning of Period | | | Total Gains (Losses) | | | Purchases | | | Sales | | | Settlements | | | Net Transfer In (Out) of Level 3 | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Corporate fixed maturity securities | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 16.3 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 16.3 | | |
Related party investments | | | | | — | | | | | | — | | | | | | — | | | | | | 115.2 | | | | | | — | | | | | | — | | | | | | — | | | | | | 115.2 | | |
Funds withheld receivables | | | | | 34.6 | | | | | | 1.5 | | | | | | — | | | | | | 23.5 | | | | | | (0.7) | | | | | | — | | | | | | — | | | | | | 58.9 | | |
Total assets at fair value | | | | $ | 34.6 | | | | | $ | 1.5 | | | | | $ | — | | | | | $ | 155.0 | | | | | $ | (0.7) | | | | | $ | — | | | | | $ | — | | | | | $ | 190.4 | | |
|
| | | Balance at Beginning of Period | | | Total (Gains) Losses | | | Purchases | | | Sales | | | Settlements | | | Net transfer In (Out) of Level 3 | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves | | | | $ | 1,316.5 | | | | | $ | 106.2 | | | | | $ | — | | | | | $ | 150.6 | | | | | $ | — | | | | | $ | (164.4) | | | | | $ | — | | | | | $ | 1,408.9 | | |
Total liabilities at fair value | | | | $ | 1,316.5 | | | | | $ | 106.2 | | | | | $ | — | | | | | $ | 150.6 | | | | | $ | — | | | | | $ | (164.4) | | | | | $ | — | | | | | $ | 1,408.9 | | |
|
| | | September 30, 2016 | | |||||||||||||||||||||||||||
| | | Level 1 | | | Level 2 | | | Level 3 | | | Fair Value | | | Carrying Amount | | |||||||||||||||
Assets(a) | | | | | | | |||||||||||||||||||||||||
Policy loans, included in funds withheld receivables | | | | $ | — | | | | | $ | — | | | | | $ | 8.5 | | | | | $ | 8.5 | | | | | $ | 8.5 | | |
Total financial assets | | | | $ | — | | | | | $ | — | | | | | $ | 8.5 | | | | | $ | 8.5 | | | | | $ | 8.5 | | |
|
| | | September 30, 2015 | | |||||||||||||||||||||||||||
| | | Level 1 | | | Level 2 | | | Level 3 | | | Fair Value | | | Carrying Amount | | |||||||||||||||
Assets(a) | | | | | | | |||||||||||||||||||||||||
Policy loans, included in funds withheld receivables | | | | $ | — | | | | | $ | — | | | | | $ | 9.0 | | | | | $ | 9.0 | | | | | $ | 9.0 | | |
Other invested assets, included in other assets | | | | | — | | | | | | — | | | | | | 2.5 | | | | | | 2.5 | | | | | | 2.5 | | |
Related party investments | | | | | — | | | | | | — | | | | | | 6.7 | | | | | | 6.7 | | | | | | 6.7 | | |
Total financial assets | | | | $ | — | | | | | $ | — | | | | | $ | 18.2 | | | | | $ | 18.2 | | | | | $ | 18.2 | | |
|
| | | September 30, 2016 | | |||||||||||||||||||||||||||
| | | Cost or Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | | | Carrying Value | | |||||||||||||||
Funds withheld receivables with FGL | | | | | | | |||||||||||||||||||||||||
Corporates | | | | $ | 638.5 | | | | | $ | 18.2 | | | | | $ | (29.5) | | | | | $ | 627.2 | | | | | $ | 627.2 | | |
Asset/Mortgage-backed securities | | | | | 238.8 | | | | | | 0.6 | | | | | | (7.9) | | | | | | 231.5 | | | | | | 231.5 | | |
Municipals | | | | | 12.1 | | | | | | 0.7 | | | | | | — | | | | | | 12.8 | | | | | | 12.8 | | |
Government bonds | | | | | 1.1 | | | | | | — | | | | | | — | | | | | | 1.1 | | | | | | 1.1 | | |
Preferred stock | | | | | 8.8 | | | | | | 0.3 | | | | | | (0.9) | | | | | | 8.2 | | | | | | 8.2 | | |
Total funds withheld receivables with FGL | | | | | 899.3 | | | | | | 19.8 | | | | | | (38.3) | | | | | | 880.8 | | | | | | 880.8 | | |
Funds withheld receivables with third parties | | | | | | | |||||||||||||||||||||||||
Corporates | | | | | 390.0 | | | | | | 18.8 | | | | | | (2.7) | | | | | | 406.1 | | | | | | 406.1 | | |
Asset/Mortgage-backed securities | | | | | 118.7 | | | | | | 1.9 | | | | | | (1.7) | | | | | | 118.9 | | | | | | 118.9 | | |
Municipals | | | | | 49.5 | | | | | | 4.1 | | | | | | — | | | | | | 53.6 | | | | | | 53.6 | | |
Government bonds | | | | | 67.7 | | | | | | 1.3 | | | | | | (0.2) | | | | | | 68.8 | | | | | | 68.8 | | |
Agency bonds | | | | | 6.6 | | | | | | 0.3 | | | | | | — | | | | | | 6.9 | | | | | | 6.9 | | |
Total funds withheld receivables with third parties | | | | | 632.5 | | | | | | 26.4 | | | | | | (4.6) | | | | | | 654.3 | | | | | | 654.3 | | |
Total fixed maturity and equity securities included in funds withheld receivables | | | | | 1,531.8 | | | | | | 46.2 | | | | | | (42.9) | | | | | | 1,535.1 | | | | | | 1,535.1 | | |
Call option receivable from FGL included in funds withheld receivables | | | | | 9.8 | | | | | | 1.5 | | | | | | — | | | | | | 11.3 | | | | | | 11.3 | | |
Accrued interest | | | | | 17.8 | | | | | | — | | | | | | — | | | | | | 17.8 | | | | | | 17.8 | | |
Net receivables | | | | | 77.7 | | | | | | — | | | | | | — | | | | | | 77.7 | | | | | | 77.7 | | |
Policy loans and other | | | | | 8.5 | | | | | | — | | | | | | — | | | | | | 8.5 | | | | | | 8.5 | | |
Total funds withheld receivables | | | | $ | 1,645.6 | | | | | $ | 47.7 | | | | | $ | (42.9) | | | | | $ | 1,650.4 | | | | | $ | 1,650.4 | | |
|
| | | September 30, 2015 | | |||||||||||||||||||||||||||
| | | Cost or Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | | | Carrying Value | | |||||||||||||||
Funds withheld receivables with FGL | | | | | | | |||||||||||||||||||||||||
Corporates | | | | $ | 740.4 | | | | | $ | 4.5 | | | | | $ | (67.9) | | | | | $ | 677.0 | | | | | $ | 677.0 | | |
Asset/Mortgage-backed securities | | | | | 274.6 | | | | | | 1.3 | | | | | | (6.6) | | | | | | 269.3 | | | | | | 269.3 | | |
Municipals | | | | | 28.5 | | | | | | 0.1 | | | | | | (0.6) | | | | | | 28.0 | | | | | | 28.0 | | |
Preferred stock | | | | | 38.9 | | | | | | 1.4 | | | | | | (1.0) | | | | | | 39.3 | | | | | | 39.3 | | |
Total funds withheld receivables with FGL | | | | | 1,082.4 | | | | | | 7.3 | | | | | | (76.1) | | | | | | 1,013.6 | | | | | | 1,013.6 | | |
Funds withheld receivables with third parties | | | | | | | |||||||||||||||||||||||||
Corporates | | | | | 420.8 | | | | | | 3.7 | | | | | | (18.5) | | | | | | 406.0 | | | | | | 406.0 | | |
Asset/Mortgage-backed securities | | | | | 125.4 | | | | | | 1.3 | | | | | | (1.0) | | | | | | 125.7 | | | | | | 125.7 | | |
Municipals | | | | | 72.9 | | | | | | 0.8 | | | | | | (0.7) | | | | | | 73.0 | | | | | | 73.0 | | |
Government bonds | | | | | 8.3 | | | | | | 0.1 | | | | | | — | | | | | | 8.4 | | | | | | 8.4 | | |
Agency bonds | | | | | 11.5 | | | | | | — | | | | | | (0.1) | | | | | | 11.4 | | | | | | 11.4 | | |
Total funds withheld receivables with third parties | | | | | 638.9 | | | | | | 5.9 | | | | | | (20.3) | | | | | | 624.5 | | | | | | 624.5 | | |
Total fixed maturity and equity securities included in funds withheld receivables | | | | | 1,721.3 | | | | | | 13.2 | | | | | | (96.4) | | | | | | 1,638.1 | | | | | | 1,638.1 | | |
Call option receivable from FGL included in funds withheld receivables | | | | | 12.3 | | | | | | — | | | | | | (6.9) | | | | | | 5.4 | | | | | | 5.4 | | |
Accrued interest | | | | | 20.5 | | | | | | — | | | | | | — | | | | | | 20.5 | | | | | | 20.5 | | |
Net receivables | | | | | 41.1 | | | | | | — | | | | | | — | | | | | | 41.1 | | | | | | 41.1 | | |
Policy loans and other | | | | | 5.0 | | | | | | — | | | | | | — | | | | | | 5.0 | | | | | | 5.0 | | |
Total funds withheld receivables | | | | $ | 1,800.2 | | | | | $ | 13.2 | | | | | $ | (103.3) | | | | | $ | 1,710.1 | | | | | $ | 1,710.1 | | |
|
| | | September 30, 2016 | | |||||||||
| | | Amortized Cost | | | Fair Value | | ||||||
Corporate, Non-structured Hybrids, Municipal and Preferred stock: | | | | ||||||||||
Due in one year or less | | | | $ | 12.8 | | | | | $ | 11.9 | | |
Due after one year through five years | | | | | 231.4 | | | | | | 228.2 | | |
Due after five years through ten years | | | | | 420.8 | | | | | | 429.3 | | |
Due after ten years | | | | | 487.1 | | | | | | 493.3 | | |
Subtotal | | | | | 1,152.1 | | | | | | 1,162.7 | | |
Other securities which provide for periodic payments: | | | | ||||||||||
Asset/Mortgage-backed securities | | | | | 357.5 | | | | | | 350.4 | | |
Structured hybrids | | | | | 22.2 | | | | | | 22.0 | | |
Total fixed maturity and equity securities included in funds withheld receivables | | | | $ | 1,531.8 | | | | | $ | 1,535.1 | | |
|
| | | Fiscal | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Realized losses on available-for-sale securities not included in funds withheld receivables | | | | $ | (0.5) | | | | | $ | (2.2) | | | | | $ | — | | |
Realized (losses) gains on equity securities not included in funds withheld receivables | | | | | — | | | | | | (4.7) | | | | | | 15.4 | | |
Realized and unrealized (losses) gains on related party investments and other invested assets not included in funds withheld receivables | | | | | (5.6) | | | | | | (49.8) | | | | | | 2.8 | | |
Realized and unrealized gains (losses) on derivative instruments not included in funds withheld receivables | | | | | 3.8 | | | | | | (7.6) | | | | | | 25.7 | | |
Realized and unrealized gains (losses) on funds withheld receivables | | | | | 150.3 | | | | | | (43.4) | | | | | | 91.1 | | |
Net investment gains (losses) | | | | $ | 148.0 | | | | | $ | (107.7) | | | | | $ | 135.0 | | |
|
| | | September 30, | | |||||||||
| | | 2016 | | | 2015 | | ||||||
Other invested assets | | | | $ | 8.4 | | | | | $ | 7.2 | | |
Derivatives | | | | | 5.9 | | | | | | 1.0 | | |
Asset-based loans | | | | | 1.7 | | | | | | 4.5 | | |
Corporate fixed-maturity securities, available-for-sale | | | | | — | | | | | | 14.1 | | |
Other assets | | | | | 3.0 | | | | | | 7.5 | | |
Total other assets | | | | $ | 19.0 | | | | | $ | 34.3 | | |
|
| | | September 30, 2015 | | |||||||||||||||||||||||||||
| | | Cost or Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | | | Carrying Value | | |||||||||||||||
Corporate fixed-maturity securities, available-for-sale | | | | $ | 14.1 | | | | | $ | — | | | | | $ | — | | | | | $ | 14.1 | | | | | $ | 14.1 | | |
Total | | | | $ | 14.1 | | | | | $ | — | | | | | $ | — | | | | | $ | 14.1 | | | | | $ | 14.1 | | |
|
| | | Fiscal | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
(Loss) income from continuing operations before income taxes: | | | | | |||||||||||||||
United States | | | | $ | (12.5) | | | | | $ | (68.7) | | | | | $ | 40.1 | | |
Outside the United States | | | | | — | | | | | | — | | | | | | — | | |
Total (loss) income before income taxes | | | | $ | (12.5) | | | | | $ | (68.7) | | | | | $ | 40.1 | | |
|
| | | Fiscal | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Current: | | | | | |||||||||||||||
Federal | | | | $ | (17.4) | | | | | $ | (16.4) | | | | | $ | 9.4 | | |
Deferred: | | | | | |||||||||||||||
Federal | | | | | 23.6 | | | | | | (7.6) | | | | | | 6.3 | | |
Income tax expense (benefit) | | | | $ | 6.2 | | | | | $ | (24.0) | | | | | $ | 15.7 | | |
|
| | | Fiscal | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Expected income tax (benefit) expense at Federal statutory rate | | | | $ | (4.4) | | | | | $ | (24.0) | | | | | $ | 14.0 | | |
Valuation allowance for deferred tax assets | | | | | 12.0 | | | | | | — | | | | | | — | | |
State and local income taxes, net of federal income tax benefit | | | | | (1.7) | | | | | | — | | | | | | 1.7 | | |
Other | | | | | 0.3 | | | | | | — | | | | | | — | | |
Reported income tax expense (benefit) | | | | $ | 6.2 | | | | | $ | (24.0) | | | | | $ | 15.7 | | |
Effective tax rate | | | | | (49.6)% | | | | | | 34.9% | | | | | | 39.2% | | |
| | | September 30, | | ||||||||||||
| | | 2016 | | | 2015 | | | ||||||||
Deferred tax assets: | | | | | ||||||||||||
Net operating loss carryforwards | | | | $ | 4.4 | | | | | $ | — | | | | ||
Unrealized tax losses on securities | | | | | 12.2 | | | | | | 17.1 | | | | ||
Insurance receivables | | | | | 0.4 | | | | | | 21.2 | | | | ||
Other | | | | | — | | | | | | 0.2 | | | | ||
Total deferred tax assets | | | | | 17.0 | | | | | | 38.5 | | | | ||
Less: Valuation allowance | | | | | (12.0) | | | | | | — | | | | ||
Net deferred tax assets | | | | | 5.0 | | | | | | 38.5 | | | | ||
Deferred tax liabilities: | | | | | ||||||||||||
Insurance reserves and claim related adjustments | | | | | (4.9) | | | | | | (14.9) | | | | ||
Other | | | | | (0.1) | | | | | | — | | | | ||
Total deferred tax liabilities | | | | | (5.0) | | | | | | (14.9) | | | | ||
Net deferred tax asset | | | | $ | — | | | | | $ | 23.6 | | | | ||
|
| | | September 30, | | |||||||||
| | | 2016 | | | 2015 | | ||||||
ASSETS | | | | ||||||||||
Related party investments (Note 9) | | | | $ | 98.4 | | | | | $ | 75.4 | | |
Cash and cash equivalents | | | | | 32.1 | | | | | | 18.0 | | |
Funds withheld receivables at fair value (Note 6) | | | | | 1,650.4 | | | | | | 1,710.1 | | |
Income tax receivable | | | | | 16.5 | | | | | | 22.5 | | |
Deferred tax assets (Note 8) | | | | | — | | | | | | 23.6 | | |
Other assets (Note 7) | | | | | 19.0 | | | | | | 34.3 | | |
Total assets | | | | $ | 1,816.4 | | | | | $ | 1,883.9 | | |
LIABILITIES AND SHAREHOLDER’S EQUITY | | | | ||||||||||
Insurance reserves at fair value | | | | $ | 1,685.9 | | | | | $ | 1,731.9 | | |
Other liabilities | | | | | 9.9 | | | | | | 12.6 | | |
Total liabilities | | | | | 1,695.8 | | | | | | 1,744.5 | | |
Commitments and contingencies | | | | ||||||||||
Shareholder’s equity: | | | | ||||||||||
Common stock ($1 par value, 425,000 shares authorized, 377,400 shares issued and outstanding at September 30, 2016 and 2015) | | | | | 0.4 | | | | | | 0.4 | | |
Additional paid-in capital | | | | | 177.7 | | | | | | 178.0 | | |
Accumulated deficit | | | | | (57.7) | | | | | | (39.0) | | |
Accumulated other comprehensive income | | | | | 0.2 | | | | | | — | | |
Total shareholder’s equity | | | | | 120.6 | | | | | | 139.4 | | |
Total liabilities and shareholder’s equity | | | | $ | 1,816.4 | | | | | $ | 1,883.9 | | |
|
| | | Year ended September 30, | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Revenues: | | | | | |||||||||||||||
Net investment income | | | | $ | 2.4 | | | | | $ | 8.9 | | | | | $ | 9.3 | | |
Net investment gains (losses) | | | | | 148.0 | | | | | | (107.7) | | | | | | 135.0 | | |
Total revenues | | | | | 150.4 | | | | | | (98.8) | | | | | | 144.3 | | |
Benefits and expenses: | | | | | |||||||||||||||
Benefits and other changes in policy reserves | | | | | 153.2 | | | | | | (43.5) | | | | | | 92.8 | | |
Acquisition and operating expenses | | | | | 9.7 | | | | | | 13.4 | | | | | | 11.4 | | |
Total benefits and expenses | | | | | 162.9 | | | | | | (30.1) | | | | | | 104.2 | | |
Operating (loss) income | | | | | (12.5) | | | | | | (68.7) | | | | | | 40.1 | | |
(Loss) income before income taxes | | | | | (12.5) | | | | | | (68.7) | | | | | | 40.1 | | |
Income tax expense (benefit) | | | | | 6.2 | | | | | | (24.0) | | | | | | 15.7 | | |
Net (loss) income | | | | $ | (18.7) | | | | | $ | (44.7) | | | | | $ | 24.4 | | |
Other comprehensive income: | | | | | |||||||||||||||
Unrealized investment gains: | | | | | |||||||||||||||
Changes in unrealized investment gains before reclassification adjustment | | | | $ | 0.3 | | | | | $ | — | | | | | $ | — | | |
Changes in unrealized investment gains after reclassification adjustment | | | | | 0.3 | | | | | | — | | | | | | — | | |
Changes in deferred income tax asset/liability | | | | | (0.1) | | | | | | — | | | | | | — | | |
Net unrealized gains on investments | | | | | 0.2 | | | | | | — | | | | | | — | | |
Net change to derive comprehensive income for the period | | | | | 0.2 | | | | | | — | | | | | | — | | |
Comprehensive (loss) income | | | | $ | (9.9) | | | | | $ | (44.7) | | | | | $ | 24.4 | | |
|
| | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive Income | | | Total Shareholder’s Equity | | |||||||||||||||
Balances at September 30, 2013 | | | | $ | 0.4 | | | | | $ | 166.2 | | | | | $ | (18.7) | | | | | $ | — | | | | | $ | 147.9 | | |
Net income | | | | | — | | | | | | — | | | | | | 24.4 | | | | | | — | | | | | | 24.4 | | |
Comprehensive income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 24.4 | | |
Capital distributions | | | | | — | | | | | | (12.2) | | | | | | — | | | | | | — | | | | | | (12.2) | | |
Balances at September 30, 2014 | | | | | 0.4 | | | | | | 154.0 | | | | | | 5.7 | | | | | | — | | | | | | 160.1 | | |
Net Loss | | | | | — | | | | | | — | | | | | | (44.7) | | | | | | — | | | | | | (44.7) | | |
Comprehensive loss | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (44.7) | | |
Capital contributions | | | | | — | | | | | | 24.0 | | | | | | — | | | | | | — | | | | | | 24.0 | | |
Balances at September 30, 2015 | | | | | 0.4 | | | | | | 178.0 | | | | | | (39.0) | | | | | | — | | | | | | 139.4 | | |
Net loss | | | | | — | | | | | | — | | | | | | (18.7) | | | | | | — | | | | | | (18.7) | | |
Unrealized investment gains, net | | | | | — | | | | | | — | | | | | | — | | | | | | 0.2 | | | | | | 0.2 | | |
Comprehensive loss | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (18.5) | | |
Stock Compensation | | | | | — | | | | | | (0.3) | | | | | | — | | | | | | — | | | | | | (0.3) | | |
Balance at September 30, 2016 | | | | $ | 0.4 | | | | | $ | 177.7 | | | | | $ | (57.7) | | | | | $ | 0.2 | | | | | $ | 120.6 | | |
|
| | | Fiscal | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Cash flows from operating activities: | | | | | |||||||||||||||
Net (loss) income | | | | $ | (18.7) | | | | | $ | (44.7) | | | | | $ | 24.4 | | |
Adjustments to reconcile net (loss) income to operating cash flows: | | | | | | | | | | | | | | | | | | | |
Deferred income taxes | | | | | 23.6 | | | | | | (7.7) | | | | | | 6.3 | | |
Net recognized gains (losses) on investments and derivatives | | | | | 4.5 | | | | | | 57.0 | | | | | | (20.3) | | |
Changes in operating assets and liabilities | | | | | (21.1) | | | | | | (73.3) | | | | | | (26.1) | | |
Net change in cash due to operating activities | | | | | (11.7) | | | | | | (68.7) | | | | | | (15.7) | | |
Cash flows from investing activities: | | | | | |||||||||||||||
Proceeds from investments, sold, matured or repaid | | | | | 33.0 | | | | | | 16.9 | | | | | | 78.7 | | |
Cost of investments acquired | | | | | (7.2) | | | | | | (9.4) | | | | | | (37.1) | | |
Net change in cash due to investing activities | | | | | 25.8 | | | | | | 7.5 | | | | | | 41.6 | | |
Cash flows from financing activities: | | | | | |||||||||||||||
Capital contributions | | | | | — | | | | | | 24.0 | | | | | | — | | |
Dividends paid | | | | | — | | | | | | — | | | | | | (12.2) | | |
Net change in cash due to financing activities | | | | | — | | | | | | 24.0 | | | | | | (12.2) | | |
Net change in cash and cash equivalents | | | | | 14.1 | | | | | | (37.2) | | | | | | 13.7 | | |
Cash and cash equivalents at beginning of period | | | | | 18.0 | | | | | | 55.2 | | | | | | 41.5 | | |
Cash and cash equivalents at end of period | | | | $ | 32.1 | | | | | $ | 18.0 | | | | | $ | 55.2 | | |
Supplemental disclosures of cash flow information | | | | | |||||||||||||||
Taxes paid during the year | | | | $ | — | | | | | $ | 6.6 | | | | | $ | 16.0 | | |
Taxes received during the year | | | | | 21.9 | | | | | | — | | | | | | — | | |
| | | Fiscal | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Unrecognized tax benefits at beginning of year | | | | $ | 1.9 | | | | | $ | 1.2 | | | | | $ | — | | |
Gross increase — tax positions in prior period | | | | | — | | | | | | 0.7 | | | | | | 1.2 | | |
Gross decrease — tax positions in prior period | | | | | (1.9) | | | | | | — | | | | | | — | | |
Gross increase — tax positions in current period | | | | | 0.5 | | | | | | — | | | | | | — | | |
Unrecognized tax benefits at end of year | | | | $ | 0.5 | | | | | $ | 1.9 | | | | | $ | 1.2 | | |
|
| | | Purchase Price | | |||
Cash paid at November 3, 2014 close | | | | $ | 17.9 | | |
Cash purchase price adjustments | | | | | (1.5) | | |
Contingent consideration premium increase benefit | | | | | 2.8 | | |
Total purchase price | | | | $ | 19.2 | | |
|
| | | Purchase Price Allocation | | |||
Cash and cash equivalents | | | | $ | 8.5 | | |
Funds withheld receivables | | | | | 359.5 | | |
Insurance reserves | | | | | (346.9) | | |
Other liabilities | | | | | (1.9) | | |
Total net assets acquired | | | | $ | 19.2 | | |
|
| | | | | | September 30, | | |||||||||
Derivatives not designated as hedging instruments: | | | Classification | | | 2016 | | | 2015 | | ||||||
Assets: | | | | | ||||||||||||
Call option receivable from FGL | | | Funds withheld receivables | | | | $ | 11.3 | | | | | $ | 5.4 | | |
Call options | | | Other assets | | | | | 5.9 | | | | | | 1.0 | | |
| | | | | | | $ | 17.2 | | | | | $ | 6.4 | | |
|
| | | | | | Fiscal | | |||||||||||||||
Classification | | | Derivatives Not Designated as Hedging Instruments | | | 2016 | | | 2015 | | | 2014 | | |||||||||
Revenues: | | | | | | |||||||||||||||||
Net investment gains (losses) | | | Call options | | | | $ | 3.8 | | | | | $ | (7.6) | | | | | $ | 25.7 | | |
| | | September 30, 2016 | | | September 30, 2015 | | ||||||||||||||||||||||||||||||||||||||||||
| | | Level 1 | | | Level 2 | | | Level 3 | | | Fair Value | | | Level 1 | | | Level 2 | | | Level 3 | | | Fair Value | | ||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Fixed maturity and equity securities included in funds withheld receivables | | | | $ | 69.9 | | | | | $ | 1,387.1 | | | | | $ | 78.1 | | | | | $ | 1,535.1 | | | | | $ | 8.4 | | | | | $ | 1,555.0 | | | | | $ | 74.7 | | | | | $ | 1,638.1 | | |
Call option receivable from FGL included in funds withheld receivables | | | | | — | | | | | | 11.3 | | | | | | — | | | | | | 11.3 | | | | | | — | | | | | | 5.4 | | | | | | — | | | | | | 5.4 | | |
Related party investments | | | | | — | | | | | | — | | | | | | 98.4 | | | | | | 98.4 | | | | | | — | | | | | | 7.0 | | | | | | 61.7 | | | | | | 68.7 | | |
Corporate fixed maturity securities included in other assets | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 14.1 | | | | | | 14.1 | | |
Other invested assets included in other assets | | | | | — | | | | | | — | | | | | | 5.5 | | | | | | 5.5 | | | | | | — | | | | | | — | | | | | | 2.8 | | | | | | 2.8 | | |
Total financial assets | | | | $ | 69.9 | | | | | $ | 1,398.4 | | | | | $ | 182.0 | | | | | $ | 1,650.3 | | | | | $ | 8.4 | | | | | $ | 1,567.4 | | | | | $ | 153.3 | | | | | $ | 1,729.1 | | |
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves | | | | $ | — | | | | | $ | — | | | | | $ | 1,685.9 | | | | | $ | 1,685.9 | | | | | $ | — | | | | | $ | — | | | | | $ | 1,731.9 | | | | | $ | 1,731.9 | | |
Total financial liabilities | | | | $ | — | | | | | $ | — | | | | | $ | 1,685.9 | | | | | $ | 1,685.9 | | | | | $ | — | | | | | $ | — | | | | | $ | 1,731.9 | | | | | $ | 1,731.9 | | |
|
| | | Fair Value at | | | | | | | | | Range (Weighted average) | | ||||||||||||
Assets | | | September 30, 2016 | | | September 30, 2015 | | | Valuation Technique | | | Unobservable Input(s) | | | September 30, 2016 | | | September 30, 2015 | | ||||||
Corporate fixed maturity securities included in other assets | | | | $ | — | | | | | $ | 14.1 | | | | Broker-quoted | | | Offered quotes | | | —% | | | 83% | |
Related party investments − HGI Energy | | | | | 91.0 | | | | | | 50.0 | | | | Discounted Cash Flow | | | Discount rate | | | 0.79% | | | 9% | |
Related party investments − Salus preferred equity | | | | | 6.7 | | | | | | 10.4 | | | | Market- approach | | | Yield | | | 11% | | | 11% | |
| | | | | | | | | | | | | | | | | | RadioShack Corp. Recovery | | | 5.5% | | | 30% | |
| | | | | | | | | | | | | | | | | | Discount Rate | | | 15% | | | 15% | |
| | | | | | | | | | | | | | | | | | Salus CLO Equity | | | 28.4% | | | 41.8% | |
Related party investments − Salus CLO equity tranche | | | | | 0.7 | | | | | | 1.3 | | | | Third party valuation | | | Offered quote | | | 28.4% | | | 41.8% | |
| | | | | | | | | | | | | | | | | | Discount rate | | | 15% | | | 15% | |
| | | | | | | | | | | | | | | | | | Constant default rate | | | — | | | 2% | |
| | | | | | | | | | | | | | | | | | RSH Recovery | | | 5.5% | | | 30% | |
| | | | | | | | | | | | | | | | | | Other loan recoveries | | | 0% – 100% | | | 4% – 100% | |
| | | Fair Value at | | | | | | | | | Range (Weighted average) | | ||||||||||||
Assets | | | September 30, 2016 | | | September 30, 2015 | | | Valuation Technique | | | Unobservable Input(s) | | | September 30, 2016 | | | September 30, 2015 | | ||||||
Other invested assets included in other assets | | | | | 5.5 | | | | | | 2.8 | | | | Discounted Cash Flow | | | Probability of collection | | | 100% | | | 50% | |
| | | | | | | | | | | | | | | | | | Discount rate | | | 10% | | | 10% | |
Funds withheld receivables: | | | | | | | | ||||||||||||||||||
Fixed maturity and equity securities | | | | | 35.2 | | | | | | 39.1 | | | | Matrix pricing | | | Quoted prices | | | 98% – 122% (109%) | | | 100% – 122% (112%) | |
Fixed maturity securities | | | | | 5.4 | | | | | | 19.2 | | | | Loan Recovery Value | | | Recovery rate | | | 56% – 100% (82%) | | | 6% – 12% (8%) | |
Fixed maturity securities | | | | | 35.7 | | | | | | 6.7 | | | | Broker-quoted | | | Offered quotes | | | 97% – 100% (100%) | | | 99% – 103% (101%) | |
Loan participations | | | | | 1.8 | | | | | | 9.7 | | | | Loan Recovery Value | | | Recovery rate | | | 52% – 100% (71%) | | | 100% | |
Total | | | | $ | 182.0 | | | | | $ | 153.3 | | | | | | | ||||||||
Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
Insurance reserves | | | | $ | 1,685.9 | | | | | $ | 1,731.9 | | | | Discounted cash flow | | | Non-performance risk spread | | | 0.32% | | | 0.16% – 0.46% | |
| | | | | | | | | | | | | | | | | | Risk margin to reflect uncertainty | | | 0.50% | | | 0.50% – 1.00% | |
Total | | | | $ | 1,685.9 | | | | | $ | 1,731.9 | | | | | | | ||||||||
|
| | | Fiscal 2016 | | |||||||||||||||||||||||||||||||||||||||||||||
| | | Balance at Beginning of Period | | | Total Gains (Losses) | | | Purchases | | | Sales | | | Settlements | | | Net Transfer In (Out) of Level 3s(a) | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Corporate fixed maturity securities | | | | $ | 14.1 | | | | | $ | (0.5) | | | | | $ | — | | | | | $ | — | | | | | $ | (13.6) | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Related party investments | | | | | 61.7 | | | | | | (9.3) | | | | | | — | | | | | | 46.0 | | | | | | — | | | | | | — | | | | | | — | | | | | | 98.4 | | |
Other invested assets included in other assets | | | | | 2.8 | | | | | | 2.7 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5.5 | | |
Funds withheld receivables | | | | | 74.7 | | | | | | (3.6) | | | | | | — | | | | | | 36.2 | | | | | | (34.4) | | | | | | — | | | | | | 5.2 | | | | | | 78.1 | | |
Total assets at fair value | | | | $ | 153.3 | | | | | $ | (10.7) | | | | | $ | — | | | | | $ | 82.2 | | | | | $ | (48.0) | | | | | $ | — | | | | | $ | 5.2 | | | | | $ | 182.0 | | |
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves | | | | $ | 1,731.9 | | | | | $ | 162.7 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (208.7) | | | | | $ | — | | | | | $ | 1,685.9 | | |
Total liabilities at fair value | | | | $ | 1,731.9 | | | | | $ | 162.7 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (208.7) | | | | | $ | — | | | | | $ | 1,685.9 | | |
|
| | | Fiscal 2015 | | |||||||||||||||||||||||||||||||||||||||||||||
| | | Balance at Beginning of Period | | | Total Gains (Losses) | | | Purchases | | | Sales | | | Settlements | | | Net Transfer In (Out) of Level 3(a) | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Corporate fixed maturity securities | | | | $ | 16.3 | | | | | $ | (2.2) | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 14.1 | | |
Related party investments | | | | | 115.2 | | | | | | (56.2) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2.7 | | | | | | 61.7 | | |
Other invested assets included in other assets | | | | | — | | | | | | (16.3) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 19.1 | | | | | | 2.8 | | |
Funds withheld receivables | | | | | 58.9 | | | | | | (0.5) | | | | | | — | | | | | | 30.4 | | | | | | (14.1) | | | | | | — | | | | | | — | | | | | | 74.7 | | |
Total assets at fair value | | | | $ | 190.4 | | | | | $ | (75.2) | | | | | $ | — | | | | | $ | 30.4 | | | | | $ | (14.1) | | | | | $ | — | | | | | $ | 21.8 | | | | | $ | 153.3 | | |
|
| | | Balance at Beginning of Period | | | Total (Gains) Losses | | | Purchases | | | Sales | | | Settlements | | | Net transfer In (Out) of Level 3 | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves | | | | $ | 1,408.9 | | | | | $ | (46.2) | | | | | $ | — | | | | | $ | 444.7 | | | | | $ | — | | | | | $ | (75.5) | | | | | $ | — | | | | | $ | 1,731.9 | | |
Total liabilities at fair value | | | | $ | 1,408.9 | | | | | $ | (46.2) | | | | | $ | — | | | | | $ | 444.7 | | | | | $ | — | | | | | $ | (75.5) | | | | | $ | — | | | | | $ | 1,731.9 | | |
|
| | | Fiscal 2014 | | |||||||||||||||||||||||||||||||||||||||||||||
| | | Balance at Beginning of Period | | | Total Gains (Losses) | | | Purchases | | | Sales | | | Settlements | | | Net Transfer In (Out) of Level 3 | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Corporate fixed maturity securities | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 16.3 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 16.3 | | |
Related party investments | | | | | — | | | | | | — | | | | | | — | | | | | | 115.2 | | | | | | — | | | | | | — | | | | | | — | | | | | | 115.2 | | |
Funds withheld receivables | | | | | 34.6 | | | | | | 1.5 | | | | | | — | | | | | | 23.5 | | | | | | (0.7) | | | | | | — | | | | | | — | | | | | | 58.9 | | |
Total assets at fair value | | | | $ | 34.6 | | | | | $ | 1.5 | | | | | $ | — | | | | | $ | 155.0 | | | | | $ | (0.7) | | | | | $ | — | | | | | $ | — | | | | | $ | 190.4 | | |
|
| | | Balance at Beginning of Period | | | Total (Gains) Losses | | | Purchases | | | Sales | | | Settlements | | | Net transfer In (Out) of Level 3 | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves | | | | $ | 1,316.5 | | | | | $ | 106.2 | | | | | $ | — | | | | | $ | 150.6 | | | | | $ | — | | | | | $ | (164.4) | | | | | $ | — | | | | | $ | 1,408.9 | | |
Total liabilities at fair value | | | | $ | 1,316.5 | | | | | $ | 106.2 | | | | | $ | — | | | | | $ | 150.6 | | | | | $ | — | | | | | $ | (164.4) | | | | | $ | — | | | | | $ | 1,408.9 | | |
|
| | | September 30, 2016 | | |||||||||||||||||||||||||||
| | | Level 1 | | | Level 2 | | | Level 3 | | | Fair Value | | | Carrying Amount | | |||||||||||||||
Assets(a) | | | | | | | |||||||||||||||||||||||||
Policy loans, included in funds withheld receivables | | | | $ | — | | | | | $ | — | | | | | $ | 8.5 | | | | | $ | 8.5 | | | | | $ | 8.5 | | |
Total financial assets | | | | $ | — | | | | | $ | — | | | | | $ | 8.5 | | | | | $ | 8.5 | | | | | $ | 8.5 | | |
|
| | | September 30, 2015 | | |||||||||||||||||||||||||||
| | | Level 1 | | | Level 2 | | | Level 3 | | | Fair Value | | | Carrying Amount | | |||||||||||||||
Assets(a) | | | | | | | |||||||||||||||||||||||||
Policy loans, included in funds withheld receivables | | | | $ | — | | | | | $ | — | | | | | $ | 9.0 | | | | | $ | 9.0 | | | | | $ | 9.0 | | |
Other invested assets, included in other assets | | | | | — | | | | | | — | | | | | | 2.5 | | | | | | 2.5 | | | | | | 2.5 | | |
Related party investments | | | | | — | | | | | | — | | | | | | 6.7 | | | | | | 6.7 | | | | | | 6.7 | | |
Total financial assets | | | | $ | — | | | | | $ | — | | | | | $ | 18.2 | | | | | $ | 18.2 | | | | | $ | 18.2 | | |
|
| | | September 30, 2016 | | |||||||||||||||||||||||||||
| | | Cost or Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | | | Carrying Value | | |||||||||||||||
Funds withheld receivables with FGL | | | | | | | |||||||||||||||||||||||||
Corporates | | | | $ | 638.5 | | | | | $ | 18.2 | | | | | $ | (29.5) | | | | | $ | 627.2 | | | | | $ | 627.2 | | |
Asset/Mortgage-backed securities | | | | | 238.8 | | | | | | 0.6 | | | | | | (7.9) | | | | | | 231.5 | | | | | | 231.5 | | |
Municipals | | | | | 12.1 | | | | | | 0.7 | | | | | | — | | | | | | 12.8 | | | | | | 12.8 | | |
Government bonds | | | | | 1.1 | | | | | | — | | | | | | — | | | | | | 1.1 | | | | | | 1.1 | | |
Preferred stock | | | | | 8.8 | | | | | | 0.3 | | | | | | (0.9) | | | | | | 8.2 | | | | | | 8.2 | | |
Total funds withheld receivables with FGL | | | | | 899.3 | | | | | | 19.8 | | | | | | (38.3) | | | | | | 880.8 | | | | | | 880.8 | | |
Funds withheld receivables with third parties | | | | | | | |||||||||||||||||||||||||
Corporates | | | | | 390.0 | | | | | | 18.8 | | | | | | (2.7) | | | | | | 406.1 | | | | | | 406.1 | | |
Asset/Mortgage-backed securities | | | | | 118.7 | | | | | | 1.9 | | | | | | (1.7) | | | | | | 118.9 | | | | | | 118.9 | | |
Municipals | | | | | 49.5 | | | | | | 4.1 | | | | | | — | | | | | | 53.6 | | | | | | 53.6 | | |
Government bonds | | | | | 67.7 | | | | | | 1.3 | | | | | | (0.2) | | | | | | 68.8 | | | | | | 68.8 | | |
Agency bonds | | | | | 6.6 | | | | | | 0.3 | | | | | | — | | | | | | 6.9 | | | | | | 6.9 | | |
Total funds withheld receivables with third parties | | | | | 632.5 | | | | | | 26.4 | | | | | | (4.6) | | | | | | 654.3 | | | | | | 654.3 | | |
Total fixed maturity and equity securities included in funds withheld receivables | | | | | 1,531.8 | | | | | | 46.2 | | | | | | (42.9) | | | | | | 1,535.1 | | | | | | 1,535.1 | | |
Call option receivable from FGL included in funds withheld receivables | | | | | 9.8 | | | | | | 1.5 | | | | | | — | | | | | | 11.3 | | | | | | 11.3 | | |
Accrued interest | | | | | 17.8 | | | | | | — | | | | | | — | | | | | | 17.8 | | | | | | 17.8 | | |
Net receivables | | | | | 77.7 | | | | | | — | | | | | | — | | | | | | 77.7 | | | | | | 77.7 | | |
Policy loans and other | | | | | 8.5 | | | | | | — | | | | | | — | | | | | | 8.5 | | | | | | 8.5 | | |
Total funds withheld receivables | | | | $ | 1,645.6 | | | | | $ | 47.7 | | | | | $ | (42.9) | | | | | $ | 1,650.4 | | | | | $ | 1,650.4 | | |
|
| | | September 30, 2015 | | |||||||||||||||||||||||||||
| | | Cost or Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | | | Carrying Value | | |||||||||||||||
Funds withheld receivables with FGL | | | | | | | |||||||||||||||||||||||||
Corporates | | | | $ | 740.4 | | | | | $ | 4.5 | | | | | $ | (67.9) | | | | | $ | 677.0 | | | | | $ | 677.0 | | |
Asset/Mortgage-backed securities | | | | | 274.6 | | | | | | 1.3 | | | | | | (6.6) | | | | | | 269.3 | | | | | | 269.3 | | |
Municipals | | | | | 28.5 | | | | | | 0.1 | | | | | | (0.6) | | | | | | 28.0 | | | | | | 28.0 | | |
Preferred stock | | | | | 38.9 | | | | | | 1.4 | | | | | | (1.0) | | | | | | 39.3 | | | | | | 39.3 | | |
Total funds withheld receivables with FGL | | | | | 1,082.4 | | | | | | 7.3 | | | | | | (76.1) | | | | | | 1,013.6 | | | | | | 1,013.6 | | |
Funds withheld receivables with third parties | | | | | | | |||||||||||||||||||||||||
Corporates | | | | | 420.8 | | | | | | 3.7 | | | | | | (18.5) | | | | | | 406.0 | | | | | | 406.0 | | |
Asset/Mortgage-backed securities | | | | | 125.4 | | | | | | 1.3 | | | | | | (1.0) | | | | | | 125.7 | | | | | | 125.7 | | |
Municipals | | | | | 72.9 | | | | | | 0.8 | | | | | | (0.7) | | | | | | 73.0 | | | | | | 73.0 | | |
Government bonds | | | | | 8.3 | | | | | | 0.1 | | | | | | — | | | | | | 8.4 | | | | | | 8.4 | | |
Agency bonds | | | | | 11.5 | | | | | | — | | | | | | (0.1) | | | | | | 11.4 | | | | | | 11.4 | | |
Total funds withheld receivables with third parties | | | | | 638.9 | | | | | | 5.9 | | | | | | (20.3) | | | | | | 624.5 | | | | | | 624.5 | | |
Total fixed maturity and equity securities included in funds withheld receivables | | | | | 1,721.3 | | | | | | 13.2 | | | | | | (96.4) | | | | | | 1,638.1 | | | | | | 1,638.1 | | |
Call option receivable from FGL included in funds withheld receivables | | | | | 12.3 | | | | | | — | | | | | | (6.9) | | | | | | 5.4 | | | | | | 5.4 | | |
Accrued interest | | | | | 20.5 | | | | | | — | | | | | | — | | | | | | 20.5 | | | | | | 20.5 | | |
Net receivables | | | | | 41.1 | | | | | | — | | | | | | — | | | | | | 41.1 | | | | | | 41.1 | | |
Policy loans and other | | | | | 5.0 | | | | | | — | | | | | | — | | | | | | 5.0 | | | | | | 5.0 | | |
Total funds withheld receivables | | | | $ | 1,800.2 | | | | | $ | 13.2 | | | | | $ | (103.3) | | | | | $ | 1,710.1 | | | | | $ | 1,710.1 | | |
|
| | | September 30, 2016 | | |||||||||
| | | Amortized Cost | | | Fair Value | | ||||||
Corporate, Non-structured Hybrids, Municipal and Preferred stock: | | | | ||||||||||
Due in one year or less | | | | $ | 12.8 | | | | | $ | 11.9 | | |
Due after one year through five years | | | | | 231.4 | | | | | | 228.2 | | |
Due after five years through ten years | | | | | 420.8 | | | | | | 429.3 | | |
Due after ten years | | | | | 487.1 | | | | | | 493.3 | | |
Subtotal | | | | | 1,152.1 | | | | | | 1,162.7 | | |
Other securities which provide for periodic payments: | | | | ||||||||||
Asset/Mortgage-backed securities | | | | | 357.5 | | | | | | 350.4 | | |
Structured hybrids | | | | | 22.2 | | | | | | 22.0 | | |
Total fixed maturity and equity securities included in funds withheld receivables | | | | $ | 1,531.8 | | | | | $ | 1,535.1 | | |
|
| | | Fiscal | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Realized losses on available-for-sale securities not included in funds withheld receivables | | | | $ | (0.5) | | | | | $ | (2.2) | | | | | $ | — | | |
Realized (losses) gains on equity securities not included in funds withheld receivables | | | | | — | | | | | | (4.7) | | | | | | 15.4 | | |
Realized and unrealized (losses) gains on related party investments and other invested assets not included in funds withheld receivables | | | | | (5.6) | | | | | | (49.8) | | | | | | 2.8 | | |
Realized and unrealized gains (losses) on derivative instruments not included in funds withheld receivables | | | | | 3.8 | | | | | | (7.6) | | | | | | 25.7 | | |
Realized and unrealized gains (losses) on funds withheld receivables | | | | | 150.3 | | | | | | (43.4) | | | | | | 91.1 | | |
Net investment gains (losses) | | | | $ | 148.0 | | | | | $ | (107.7) | | | | | $ | 135.0 | | |
|
| | | September 30, | | |||||||||
| | | 2016 | | | 2015 | | ||||||
Other invested assets | | | | $ | 8.4 | | | | | $ | 7.2 | | |
Derivatives | | | | | 5.9 | | | | | | 1.0 | | |
Asset-based loans | | | | | 1.7 | | | | | | 4.5 | | |
Corporate fixed-maturity securities, available-for-sale | | | | | — | | | | | | 14.1 | | |
Other assets | | | | | 3.0 | | | | | | 7.5 | | |
Total other assets | | | | $ | 19.0 | | | | | $ | 34.3 | | |
|
| | | September 30, 2015 | | |||||||||||||||||||||||||||
| | | Cost or Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | | | Carrying Value | | |||||||||||||||
Corporate fixed-maturity securities, available-for-sale | | | | $ | 14.1 | | | | | $ | — | | | | | $ | — | | | | | $ | 14.1 | | | | | $ | 14.1 | | |
Total | | | | $ | 14.1 | | | | | $ | — | | | | | $ | — | | | | | $ | 14.1 | | | | | $ | 14.1 | | |
|
| | | Fiscal | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
(Loss) income from continuing operations before income taxes: | | | | | |||||||||||||||
United States | | | | $ | (12.5) | | | | | $ | (68.7) | | | | | $ | 40.1 | | |
Outside the United States | | | | | — | | | | | | — | | | | | | — | | |
Total (loss) income before income taxes | | | | $ | (12.5) | | | | | $ | (68.7) | | | | | $ | 40.1 | | |
|
| | | Fiscal | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Current: | | | | | |||||||||||||||
Federal | | | | $ | (17.4) | | | | | $ | (16.4) | | | | | $ | 9.4 | | |
Deferred: | | | | | |||||||||||||||
Federal | | | | | 23.6 | | | | | | (7.6) | | | | | | 6.3 | | |
Income tax expense (benefit) | | | | $ | 6.2 | | | | | $ | (24.0) | | | | | $ | 15.7 | | |
|
| | | Fiscal | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Expected income tax (benefit) expense at Federal statutory rate | | | | $ | (4.4) | | | | | $ | (24.0) | | | | | $ | 14.0 | | |
Valuation allowance for deferred tax assets | | | | | 12.0 | | | | | | — | | | | | | — | | |
State and local income taxes, net of federal income tax benefit | | | | | (1.7) | | | | | | — | | | | | | 1.7 | | |
Other | | | | | 0.3 | | | | | | — | | | | | | — | | |
Reported income tax expense (benefit) | | | | $ | 6.2 | | | | | $ | (24.0) | | | | | $ | 15.7 | | |
Effective tax rate | | | | | (49.6)% | | | | | | 34.9% | | | | | | 39.2% | | |
| | | September 30, | | ||||||||||||
| | | 2016 | | | 2015 | | | ||||||||
Deferred tax assets: | | | | | ||||||||||||
Net operating loss carryforwards | | | | $ | 4.4 | | | | | $ | — | | | | ||
Unrealized tax losses on securities | | | | | 12.2 | | | | | | 17.1 | | | | ||
Insurance receivables | | | | | 0.4 | | | | | | 21.2 | | | | ||
Other | | | | | — | | | | | | 0.2 | | | | ||
Total deferred tax assets | | | | | 17.0 | | | | | | 38.5 | | | | ||
Less: Valuation allowance | | | | | (12.0) | | | | | | — | | | | ||
Net deferred tax assets | | | | | 5.0 | | | | | | 38.5 | | | | ||
Deferred tax liabilities: | | | | | ||||||||||||
Insurance reserves and claim related adjustments | | | | | (4.9) | | | | | | (14.9) | | | | ||
Other | | | | | (0.1) | | | | | | — | | | | ||
Total deferred tax liabilities | | | | | (5.0) | | | | | | (14.9) | | | | ||
Net deferred tax asset | | | | $ | — | | | | | $ | 23.6 | | | | ||
|
| | | September 30, | | ||||||||||||
Description | | | Balance Sheet Classification | | | 2016 | | | 2015 | | ||||||
Assets: | | | | | ||||||||||||
HGI Energy Notes | | | Related party investments | | | | $ | 91.0 | | | | | $ | 50.0 | | |
Salus Preferred Equity | | | Related party investments | | | | | 6.7 | | | | | | 10.4 | | |
EIC Preferred Equity | | | Related party investments | | | | | — | | | | | | 6.7 | | |
Salus CLO | | | Related party investments | | | | | 0.7 | | | | | | 8.3 | | |
Funds withheld receivables with FGL | | | Funds withheld receivable | | | | | 978.8 | | | | | | 1,058.0 | | |
Liabilities: | | | | | ||||||||||||
Insurance reserves | | | Insurance reserves | | | | | 1,054.1 | | | | | | 1,102.7 | | |
Accounts payable to FGL | | | Other liabilities | | | | | — | | | | | | 7.8 | | |
Accounts payable to HRG | | | Other liabilities | | | | | 0.2 | | | | | | — | | |
| | | September 30, | | |||||||||||||||
Statement of Comprehensive (Loss) Income Classification | | | 2016 | | | 2015 | | | 2014 | | |||||||||
Net investment income | | | | $ | 2.4 | | | | | $ | 6.1 | | | | | $ | 7.4 | | |
Net investment gains (losses) | | | | | 101.1 | | | | | | (57.2) | | | | | | 123.5 | | |
Benefits and other changes in policy reserves | | | | | 96.5 | | | | | | (70.1) | | | | | | 86.0 | | |
Acquisition and operating expenses | | | | | 0.6 | | | | | | — | | | | | | — | | |
| | | September 30, | | |||||||||
| | | 2016 | | | 2015 | | ||||||
ASSETS | | | | ||||||||||
Related party investments (Note 9) | | | | $ | 98.4 | | | | | $ | 75.4 | | |
Cash and cash equivalents | | | | | 32.1 | | | | | | 18.0 | | |
Funds withheld receivables at fair value (Note 6) | | | | | 1,650.4 | | | | | | 1,710.1 | | |
Income tax receivable | | | | | 16.5 | | | | | | 22.5 | | |
Deferred tax assets (Note 8) | | | | | — | | | | | | 23.6 | | |
Other assets (Note 7) | | | | | 19.0 | | | | | | 34.3 | | |
Total assets | | | | $ | 1,816.4 | | | | | $ | 1,883.9 | | |
LIABILITIES AND SHAREHOLDER’S EQUITY | | | | ||||||||||
Insurance reserves at fair value | | | | $ | 1,685.9 | | | | | $ | 1,731.9 | | |
Other liabilities | | | | | 9.9 | | | | | | 12.6 | | |
Total liabilities | | | | | 1,695.8 | | | | | | 1,744.5 | | |
Commitments and contingencies | | | | ||||||||||
Shareholder’s equity: | | | | ||||||||||
Common stock ($1 par value, 425,000 shares authorized, 377,400 shares issued and outstanding at September 30, 2016 and 2015) | | | | | 0.4 | | | | | | 0.4 | | |
Additional paid-in capital | | | | | 177.7 | | | | | | 178.0 | | |
Accumulated deficit | | | | | (57.7) | | | | | | (39.0) | | |
Accumulated other comprehensive income | | | | | 0.2 | | | | | | — | | |
Total shareholder’s equity | | | | | 120.6 | | | | | | 139.4 | | |
Total liabilities and shareholder’s equity | | | | $ | 1,816.4 | | | | | $ | 1,883.9 | | |
|
| | | Year ended September 30, | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Revenues: | | | | | |||||||||||||||
Net investment income | | | | $ | 2.4 | | | | | $ | 8.9 | | | | | $ | 9.3 | | |
Net investment gains (losses) | | | | | 148.0 | | | | | | (107.7) | | | | | | 135.0 | | |
Total revenues | | | | | 150.4 | | | | | | (98.8) | | | | | | 144.3 | | |
Benefits and expenses: | | | | | |||||||||||||||
Benefits and other changes in policy reserves | | | | | 153.2 | | | | | | (43.5) | | | | | | 92.8 | | |
Acquisition and operating expenses | | | | | 9.7 | | | | | | 13.4 | | | | | | 11.4 | | |
Total benefits and expenses | | | | | 162.9 | | | | | | (30.1) | | | | | | 104.2 | | |
Operating (loss) income | | | | | (12.5) | | | | | | (68.7) | | | | | | 40.1 | | |
(Loss) income before income taxes | | | | | (12.5) | | | | | | (68.7) | | | | | | 40.1 | | |
Income tax expense (benefit) | | | | | 6.2 | | | | | | (24.0) | | | | | | 15.7 | | |
Net (loss) income | | | | $ | (18.7) | | | | | $ | (44.7) | | | | | $ | 24.4 | | |
Other comprehensive income: | | | | | |||||||||||||||
Unrealized investment gains: | | | | | |||||||||||||||
Changes in unrealized investment gains before reclassification adjustment | | | | $ | 0.3 | | | | | $ | — | | | | | $ | — | | |
Changes in unrealized investment gains after reclassification adjustment | | | | | 0.3 | | | | | | — | | | | | | — | | |
Changes in deferred income tax asset/liability | | | | | (0.1) | | | | | | — | | | | | | — | | |
Net unrealized gains on investments | | | | | 0.2 | | | | | | — | | | | | | — | | |
Net change to derive comprehensive income for the period | | | | | 0.2 | | | | | | — | | | | | | — | | |
Comprehensive (loss) income | | | | $ | (9.9) | | | | | $ | (44.7) | | | | | $ | 24.4 | | |
|
| | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive Income | | | Total Shareholder’s Equity | | |||||||||||||||
Balances at September 30, 2013 | | | | $ | 0.4 | | | | | $ | 166.2 | | | | | $ | (18.7) | | | | | $ | — | | | | | $ | 147.9 | | |
Net income | | | | | — | | | | | | — | | | | | | 24.4 | | | | | | — | | | | | | 24.4 | | |
Comprehensive income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 24.4 | | |
Capital distributions | | | | | — | | | | | | (12.2) | | | | | | — | | | | | | — | | | | | | (12.2) | | |
Balances at September 30, 2014 | | | | | 0.4 | | | | | | 154.0 | | | | | | 5.7 | | | | | | — | | | | | | 160.1 | | |
Net Loss | | | | | — | | | | | | — | | | | | | (44.7) | | | | | | — | | | | | | (44.7) | | |
Comprehensive loss | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (44.7) | | |
Capital contributions | | | | | — | | | | | | 24.0 | | | | | | — | | | | | | — | | | | | | 24.0 | | |
Balances at September 30, 2015 | | | | | 0.4 | | | | | | 178.0 | | | | | | (39.0) | | | | | | — | | | | | | 139.4 | | |
Net loss | | | | | — | | | | | | — | | | | | | (18.7) | | | | | | — | | | | | | (18.7) | | |
Unrealized investment gains, net | | | | | — | | | | | | — | | | | | | — | | | | | | 0.2 | | | | | | 0.2 | | |
Comprehensive loss | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (18.5) | | |
Stock Compensation | | | | | — | | | | | | (0.3) | | | | | | — | | | | | | — | | | | | | (0.3) | | |
Balance at September 30, 2016 | | | | $ | 0.4 | | | | | $ | 177.7 | | | | | $ | (57.7) | | | | | $ | 0.2 | | | | | $ | 120.6 | | |
|
| | | Fiscal | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Cash flows from operating activities: | | | | | |||||||||||||||
Net (loss) income | | | | $ | (18.7) | | | | | $ | (44.7) | | | | | $ | 24.4 | | |
Adjustments to reconcile net (loss) income to operating cash flows: | | | | | | | | | | | | | | | | | | | |
Deferred income taxes | | | | | 23.6 | | | | | | (7.7) | | | | | | 6.3 | | |
Net recognized gains (losses) on investments and derivatives | | | | | 4.5 | | | | | | 57.0 | | | | | | (20.3) | | |
Changes in operating assets and liabilities | | | | | (21.1) | | | | | | (73.3) | | | | | | (26.1) | | |
Net change in cash due to operating activities | | | | | (11.7) | | | | | | (68.7) | | | | | | (15.7) | | |
Cash flows from investing activities: | | | | | |||||||||||||||
Proceeds from investments, sold, matured or repaid | | | | | 33.0 | | | | | | 16.9 | | | | | | 78.7 | | |
Cost of investments acquired | | | | | (7.2) | | | | | | (9.4) | | | | | | (37.1) | | |
Net change in cash due to investing activities | | | | | 25.8 | | | | | | 7.5 | | | | | | 41.6 | | |
Cash flows from financing activities: | | | | | |||||||||||||||
Capital contributions | | | | | — | | | | | | 24.0 | | | | | | — | | |
Dividends paid | | | | | — | | | | | | — | | | | | | (12.2) | | |
Net change in cash due to financing activities | | | | | — | | | | | | 24.0 | | | | | | (12.2) | | |
Net change in cash and cash equivalents | | | | | 14.1 | | | | | | (37.2) | | | | | | 13.7 | | |
Cash and cash equivalents at beginning of period | | | | | 18.0 | | | | | | 55.2 | | | | | | 41.5 | | |
Cash and cash equivalents at end of period | | | | $ | 32.1 | | | | | $ | 18.0 | | | | | $ | 55.2 | | |
Supplemental disclosures of cash flow information | | | | | |||||||||||||||
Taxes paid during the year | | | | $ | — | | | | | $ | 6.6 | | | | | $ | 16.0 | | |
Taxes received during the year | | | | | 21.9 | | | | | | — | | | | | | — | | |
| | | Purchase Price | | |||
Cash paid at November 3, 2014 close | | | | $ | 17.9 | | |
Cash purchase price adjustments | | | | | (1.5) | | |
Contingent consideration premium increase benefit | | | | | 2.8 | | |
Total purchase price | | | | $ | 19.2 | | |
|
| | | Purchase Price Allocation | | |||
Cash and cash equivalents | | | | $ | 8.5 | | |
Funds withheld receivables | | | | | 359.5 | | |
Insurance reserves | | | | | (346.9) | | |
Other liabilities | | | | | (1.9) | | |
Total net assets acquired | | | | $ | 19.2 | | |
|
| | | | | | September 30, | | |||||||||
Derivatives not designated as hedging instruments: | | | Classification | | | 2016 | | | 2015 | | ||||||
Assets: | | | | | ||||||||||||
Call option receivable from FGL | | | Funds withheld receivables | | | | $ | 11.3 | | | | | $ | 5.4 | | |
Call options | | | Other assets | | | | | 5.9 | | | | | | 1.0 | | |
| | | | | | | $ | 17.2 | | | | | $ | 6.4 | | |
|
| | | | | | Fiscal | | |||||||||||||||
Classification | | | Derivatives Not Designated as Hedging Instruments | | | 2016 | | | 2015 | | | 2014 | | |||||||||
Revenues: | | | | | | |||||||||||||||||
Net investment gains (losses) | | | Call options | | | | $ | 3.8 | | | | | $ | (7.6) | | | | | $ | 25.7 | | |
| | | September 30, 2016 | | | September 30, 2015 | | ||||||||||||||||||||||||||||||||||||||||||
| | | Level 1 | | | Level 2 | | | Level 3 | | | Fair Value | | | Level 1 | | | Level 2 | | | Level 3 | | | Fair Value | | ||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Fixed maturity and equity securities included in funds withheld receivables | | | | $ | 69.9 | | | | | $ | 1,387.1 | | | | | $ | 78.1 | | | | | $ | 1,535.1 | | | | | $ | 8.4 | | | | | $ | 1,555.0 | | | | | $ | 74.7 | | | | | $ | 1,638.1 | | |
Call option receivable from FGL included in funds withheld receivables | | | | | — | | | | | | 11.3 | | | | | | — | | | | | | 11.3 | | | | | | — | | | | | | 5.4 | | | | | | — | | | | | | 5.4 | | |
Related party investments | | | | | — | | | | | | — | | | | | | 98.4 | | | | | | 98.4 | | | | | | — | | | | | | 7.0 | | | | | | 61.7 | | | | | | 68.7 | | |
Corporate fixed maturity securities included in other assets | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 14.1 | | | | | | 14.1 | | |
Other invested assets included in other assets | | | | | — | | | | | | — | | | | | | 5.5 | | | | | | 5.5 | | | | | | — | | | | | | — | | | | | | 2.8 | | | | | | 2.8 | | |
Total financial assets | | | | $ | 69.9 | | | | | $ | 1,398.4 | | | | | $ | 182.0 | | | | | $ | 1,650.3 | | | | | $ | 8.4 | | | | | $ | 1,567.4 | | | | | $ | 153.3 | | | | | $ | 1,729.1 | | |
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves | | | | $ | — | | | | | $ | — | | | | | $ | 1,685.9 | | | | | $ | 1,685.9 | | | | | $ | — | | | | | $ | — | | | | | $ | 1,731.9 | | | | | $ | 1,731.9 | | |
Total financial liabilities | | | | $ | — | | | | | $ | — | | | | | $ | 1,685.9 | | | | | $ | 1,685.9 | | | | | $ | — | | | | | $ | — | | | | | $ | 1,731.9 | | | | | $ | 1,731.9 | | |
|
| | | Fair Value at | | | | | | | | | Range (Weighted average) | | ||||||||||||
Assets | | | September 30, 2016 | | | September 30, 2015 | | | Valuation Technique | | | Unobservable Input(s) | | | September 30, 2016 | | | September 30, 2015 | | ||||||
Corporate fixed maturity securities included in other assets | | | | $ | — | | | | | $ | 14.1 | | | | Broker-quoted | | | Offered quotes | | | —% | | | 83% | |
Related party investments − HGI Energy | | | | | 91.0 | | | | | | 50.0 | | | | Discounted Cash Flow | | | Discount rate | | | 0.79% | | | 9% | |
Related party investments − Salus preferred equity | | | | | 6.7 | | | | | | 10.4 | | | | Market- approach | | | Yield | | | 11% | | | 11% | |
| | | | | | | | | | | | | | | | | | RadioShack Corp. Recovery | | | 5.5% | | | 30% | |
| | | | | | | | | | | | | | | | | | Discount Rate | | | 15% | | | 15% | |
| | | | | | | | | | | | | | | | | | Salus CLO Equity | | | 28.4% | | | 41.8% | |
Related party investments − Salus CLO equity tranche | | | | | 0.7 | | | | | | 1.3 | | | | Third party valuation | | | Offered quote | | | 28.4% | | | 41.8% | |
| | | | | | | | | | | | | | | | | | Discount rate | | | 15% | | | 15% | |
| | | | | | | | | | | | | | | | | | Constant default rate | | | — | | | 2% | |
| | | | | | | | | | | | | | | | | | RSH Recovery | | | 5.5% | | | 30% | |
| | | | | | | | | | | | | | | | | | Other loan recoveries | | | 0% – 100% | | | 4% – 100% | |
| | | Fair Value at | | | | | | | | | Range (Weighted average) | | ||||||||||||
Assets | | | September 30, 2016 | | | September 30, 2015 | | | Valuation Technique | | | Unobservable Input(s) | | | September 30, 2016 | | | September 30, 2015 | | ||||||
Other invested assets included in other assets | | | | | 5.5 | | | | | | 2.8 | | | | Discounted Cash Flow | | | Probability of collection | | | 100% | | | 50% | |
| | | | | | | | | | | | | | | | | | Discount rate | | | 10% | | | 10% | |
Funds withheld receivables: | | | | | | | | ||||||||||||||||||
Fixed maturity and equity securities | | | | | 35.2 | | | | | | 39.1 | | | | Matrix pricing | | | Quoted prices | | | 98% – 122% (109%) | | | 100% – 122% (112%) | |
Fixed maturity securities | | | | | 5.4 | | | | | | 19.2 | | | | Loan Recovery Value | | | Recovery rate | | | 56% – 100% (82%) | | | 6% – 12% (8%) | |
Fixed maturity securities | | | | | 35.7 | | | | | | 6.7 | | | | Broker-quoted | | | Offered quotes | | | 97% – 100% (100%) | | | 99% – 103% (101%) | |
Loan participations | | | | | 1.8 | | | | | | 9.7 | | | | Loan Recovery Value | | | Recovery rate | | | 52% – 100% (71%) | | | 100% | |
Total | | | | $ | 182.0 | | | | | $ | 153.3 | | | | | | | ||||||||
Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
Insurance reserves | | | | $ | 1,685.9 | | | | | $ | 1,731.9 | | | | Discounted cash flow | | | Non-performance risk spread | | | 0.32% | | | 0.16% – 0.46% | |
| | | | | | | | | | | | | | | | | | Risk margin to reflect uncertainty | | | 0.50% | | | 0.50% – 1.00% | |
Total | | | | $ | 1,685.9 | | | | | $ | 1,731.9 | | | | | | | ||||||||
|
| | | Fiscal 2016 | | |||||||||||||||||||||||||||||||||||||||||||||
| | | Balance at Beginning of Period | | | Total Gains (Losses) | | | Purchases | | | Sales | | | Settlements | | | Net Transfer In (Out) of Level 3s(a) | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Corporate fixed maturity securities | | | | $ | 14.1 | | | | | $ | (0.5) | | | | | $ | — | | | | | $ | — | | | | | $ | (13.6) | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Related party investments | | | | | 61.7 | | | | | | (9.3) | | | | | | — | | | | | | 46.0 | | | | | | — | | | | | | — | | | | | | — | | | | | | 98.4 | | |
Other invested assets included in other assets | | | | | 2.8 | | | | | | 2.7 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5.5 | | |
Funds withheld receivables | | | | | 74.7 | | | | | | (3.6) | | | | | | — | | | | | | 36.2 | | | | | | (34.4) | | | | | | — | | | | | | 5.2 | | | | | | 78.1 | | |
Total assets at fair value | | | | $ | 153.3 | | | | | $ | (10.7) | | | | | $ | — | | | | | $ | 82.2 | | | | | $ | (48.0) | | | | | $ | — | | | | | $ | 5.2 | | | | | $ | 182.0 | | |
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves | | | | $ | 1,731.9 | | | | | $ | 162.7 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (208.7) | | | | | $ | — | | | | | $ | 1,685.9 | | |
Total liabilities at fair value | | | | $ | 1,731.9 | | | | | $ | 162.7 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (208.7) | | | | | $ | — | | | | | $ | 1,685.9 | | |
|
| | | Fiscal 2015 | | |||||||||||||||||||||||||||||||||||||||||||||
| | | Balance at Beginning of Period | | | Total Gains (Losses) | | | Purchases | | | Sales | | | Settlements | | | Net Transfer In (Out) of Level 3(a) | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Corporate fixed maturity securities | | | | $ | 16.3 | | | | | $ | (2.2) | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 14.1 | | |
Related party investments | | | | | 115.2 | | | | | | (56.2) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2.7 | | | | | | 61.7 | | |
Other invested assets included in other assets | | | | | — | | | | | | (16.3) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 19.1 | | | | | | 2.8 | | |
Funds withheld receivables | | | | | 58.9 | | | | | | (0.5) | | | | | | — | | | | | | 30.4 | | | | | | (14.1) | | | | | | — | | | | | | — | | | | | | 74.7 | | |
Total assets at fair value | | | | $ | 190.4 | | | | | $ | (75.2) | | | | | $ | — | | | | | $ | 30.4 | | | | | $ | (14.1) | | | | | $ | — | | | | | $ | 21.8 | | | | | $ | 153.3 | | |
|
| | | Balance at Beginning of Period | | | Total (Gains) Losses | | | Purchases | | | Sales | | | Settlements | | | Net transfer In (Out) of Level 3 | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves | | | | $ | 1,408.9 | | | | | $ | (46.2) | | | | | $ | — | | | | | $ | 444.7 | | | | | $ | — | | | | | $ | (75.5) | | | | | $ | — | | | | | $ | 1,731.9 | | |
Total liabilities at fair value | | | | $ | 1,408.9 | | | | | $ | (46.2) | | | | | $ | — | | | | | $ | 444.7 | | | | | $ | — | | | | | $ | (75.5) | | | | | $ | — | | | | | $ | 1,731.9 | | |
|
| | | Fiscal 2014 | | |||||||||||||||||||||||||||||||||||||||||||||
| | | Balance at Beginning of Period | | | Total Gains (Losses) | | | Purchases | | | Sales | | | Settlements | | | Net Transfer In (Out) of Level 3 | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Corporate fixed maturity securities | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 16.3 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 16.3 | | |
Related party investments | | | | | — | | | | | | — | | | | | | — | | | | | | 115.2 | | | | | | — | | | | | | — | | | | | | — | | | | | | 115.2 | | |
Funds withheld receivables | | | | | 34.6 | | | | | | 1.5 | | | | | | — | | | | | | 23.5 | | | | | | (0.7) | | | | | | — | | | | | | — | | | | | | 58.9 | | |
Total assets at fair value | | | | $ | 34.6 | | | | | $ | 1.5 | | | | | $ | — | | | | | $ | 155.0 | | | | | $ | (0.7) | | | | | $ | — | | | | | $ | — | | | | | $ | 190.4 | | |
|
| | | Balance at Beginning of Period | | | Total (Gains) Losses | | | Purchases | | | Sales | | | Settlements | | | Net transfer In (Out) of Level 3 | | | Balance at End of Period | | |||||||||||||||||||||||||||
| | | Included in Earnings | | | Included in AOCI | | ||||||||||||||||||||||||||||||||||||||||||
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves | | | | $ | 1,316.5 | | | | | $ | 106.2 | | | | | $ | — | | | | | $ | 150.6 | | | | | $ | — | | | | | $ | (164.4) | | | | | $ | — | | | | | $ | 1,408.9 | | |
Total liabilities at fair value | | | | $ | 1,316.5 | | | | | $ | 106.2 | | | | | $ | — | | | | | $ | 150.6 | | | | | $ | — | | | | | $ | (164.4) | | | | | $ | — | | | | | $ | 1,408.9 | | |
|
| | | September 30, 2016 | | |||||||||||||||||||||||||||
| | | Level 1 | | | Level 2 | | | Level 3 | | | Fair Value | | | Carrying Amount | | |||||||||||||||
Assets(a) | | | | | | | |||||||||||||||||||||||||
Policy loans, included in funds withheld receivables | | | | $ | — | | | | | $ | — | | | | | $ | 8.5 | | | | | $ | 8.5 | | | | | $ | 8.5 | | |
Total financial assets | | | | $ | — | | | | | $ | — | | | | | $ | 8.5 | | | | | $ | 8.5 | | | | | $ | 8.5 | | |
|
| | | September 30, 2015 | | |||||||||||||||||||||||||||
| | | Level 1 | | | Level 2 | | | Level 3 | | | Fair Value | | | Carrying Amount | | |||||||||||||||
Assets(a) | | | | | | | |||||||||||||||||||||||||
Policy loans, included in funds withheld receivables | | | | $ | — | | | | | $ | — | | | | | $ | 9.0 | | | | | $ | 9.0 | | | | | $ | 9.0 | | |
Other invested assets, included in other assets | | | | | — | | | | | | — | | | | | | 2.5 | | | | | | 2.5 | | | | | | 2.5 | | |
Related party investments | | | | | — | | | | | | — | | | | | | 6.7 | | | | | | 6.7 | | | | | | 6.7 | | |
Total financial assets | | | | $ | — | | | | | $ | — | | | | | $ | 18.2 | | | | | $ | 18.2 | | | | | $ | 18.2 | | |
|
| | | September 30, 2016 | | |||||||||||||||||||||||||||
| | | Cost or Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | | | Carrying Value | | |||||||||||||||
Funds withheld receivables with FGL | | | | | | | |||||||||||||||||||||||||
Corporates | | | | $ | 638.5 | | | | | $ | 18.2 | | | | | $ | (29.5) | | | | | $ | 627.2 | | | | | $ | 627.2 | | |
Asset/Mortgage-backed securities | | | | | 238.8 | | | | | | 0.6 | | | | | | (7.9) | | | | | | 231.5 | | | | | | 231.5 | | |
Municipals | | | | | 12.1 | | | | | | 0.7 | | | | | | — | | | | | | 12.8 | | | | | | 12.8 | | |
Government bonds | | | | | 1.1 | | | | | | — | | | | | | — | | | | | | 1.1 | | | | | | 1.1 | | |
Preferred stock | | | | | 8.8 | | | | | | 0.3 | | | | | | (0.9) | | | | | | 8.2 | | | | | | 8.2 | | |
Total funds withheld receivables with FGL | | | | | 899.3 | | | | | | 19.8 | | | | | | (38.3) | | | | | | 880.8 | | | | | | 880.8 | | |
Funds withheld receivables with third parties | | | | | | | |||||||||||||||||||||||||
Corporates | | | | | 390.0 | | | | | | 18.8 | | | | | | (2.7) | | | | | | 406.1 | | | | | | 406.1 | | |
Asset/Mortgage-backed securities | | | | | 118.7 | | | | | | 1.9 | | | | | | (1.7) | | | | | | 118.9 | | | | | | 118.9 | | |
Municipals | | | | | 49.5 | | | | | | 4.1 | | | | | | — | | | | | | 53.6 | | | | | | 53.6 | | |
Government bonds | | | | | 67.7 | | | | | | 1.3 | | | | | | (0.2) | | | | | | 68.8 | | | | | | 68.8 | | |
Agency bonds | | | | | 6.6 | | | | | | 0.3 | | | | | | — | | | | | | 6.9 | | | | | | 6.9 | | |
Total funds withheld receivables with third parties | | | | | 632.5 | | | | | | 26.4 | | | | | | (4.6) | | | | | | 654.3 | | | | | | 654.3 | | |
Total fixed maturity and equity securities included in funds withheld receivables | | | | | 1,531.8 | | | | | | 46.2 | | | | | | (42.9) | | | | | | 1,535.1 | | | | | | 1,535.1 | | |
Call option receivable from FGL included in funds withheld receivables | | | | | 9.8 | | | | | | 1.5 | | | | | | — | | | | | | 11.3 | | | | | | 11.3 | | |
Accrued interest | | | | | 17.8 | | | | | | — | | | | | | — | | | | | | 17.8 | | | | | | 17.8 | | |
Net receivables | | | | | 77.7 | | | | | | — | | | | | | — | | | | | | 77.7 | | | | | | 77.7 | | |
Policy loans and other | | | | | 8.5 | | | | | | — | | | | | | — | | | | | | 8.5 | | | | | | 8.5 | | |
Total funds withheld receivables | | | | $ | 1,645.6 | | | | | $ | 47.7 | | | | | $ | (42.9) | | | | | $ | 1,650.4 | | | | | $ | 1,650.4 | | |
|
| | | September 30, 2015 | | |||||||||||||||||||||||||||
| | | Cost or Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | | | Carrying Value | | |||||||||||||||
Funds withheld receivables with FGL | | | | | | | |||||||||||||||||||||||||
Corporates | | | | $ | 740.4 | | | | | $ | 4.5 | | | | | $ | (67.9) | | | | | $ | 677.0 | | | | | $ | 677.0 | | |
Asset/Mortgage-backed securities | | | | | 274.6 | | | | | | 1.3 | | | | | | (6.6) | | | | | | 269.3 | | | | | | 269.3 | | |
Municipals | | | | | 28.5 | | | | | | 0.1 | | | | | | (0.6) | | | | | | 28.0 | | | | | | 28.0 | | |
Preferred stock | | | | | 38.9 | | | | | | 1.4 | | | | | | (1.0) | | | | | | 39.3 | | | | | | 39.3 | | |
Total funds withheld receivables with FGL | | | | | 1,082.4 | | | | | | 7.3 | | | | | | (76.1) | | | | | | 1,013.6 | | | | | | 1,013.6 | | |
Funds withheld receivables with third parties | | | | | | | |||||||||||||||||||||||||
Corporates | | | | | 420.8 | | | | | | 3.7 | | | | | | (18.5) | | | | | | 406.0 | | | | | | 406.0 | | |
Asset/Mortgage-backed securities | | | | | 125.4 | | | | | | 1.3 | | | | | | (1.0) | | | | | | 125.7 | | | | | | 125.7 | | |
Municipals | | | | | 72.9 | | | | | | 0.8 | | | | | | (0.7) | | | | | | 73.0 | | | | | | 73.0 | | |
Government bonds | | | | | 8.3 | | | | | | 0.1 | | | | | | — | | | | | | 8.4 | | | | | | 8.4 | | |
Agency bonds | | | | | 11.5 | | | | | | — | | | | | | (0.1) | | | | | | 11.4 | | | | | | 11.4 | | |
Total funds withheld receivables with third parties | | | | | 638.9 | | | | | | 5.9 | | | | | | (20.3) | | | | | | 624.5 | | | | | | 624.5 | | |
Total fixed maturity and equity securities included in funds withheld receivables | | | | | 1,721.3 | | | | | | 13.2 | | | | | | (96.4) | | | | | | 1,638.1 | | | | | | 1,638.1 | | |
Call option receivable from FGL included in funds withheld receivables | | | | | 12.3 | | | | | | — | | | | | | (6.9) | | | | | | 5.4 | | | | | | 5.4 | | |
Accrued interest | | | | | 20.5 | | | | | | — | | | | | | — | | | | | | 20.5 | | | | | | 20.5 | | |
Net receivables | | | | | 41.1 | | | | | | — | | | | | | — | | | | | | 41.1 | | | | | | 41.1 | | |
Policy loans and other | | | | | 5.0 | | | | | | — | | | | | | — | | | | | | 5.0 | | | | | | 5.0 | | |
Total funds withheld receivables | | | | $ | 1,800.2 | | | | | $ | 13.2 | | | | | $ | (103.3) | | | | | $ | 1,710.1 | | | | | $ | 1,710.1 | | |
|
| | | September 30, 2016 | | |||||||||
| | | Amortized Cost | | | Fair Value | | ||||||
Corporate, Non-structured Hybrids, Municipal and Preferred stock: | | | | ||||||||||
Due in one year or less | | | | $ | 12.8 | | | | | $ | 11.9 | | |
Due after one year through five years | | | | | 231.4 | | | | | | 228.2 | | |
Due after five years through ten years | | | | | 420.8 | | | | | | 429.3 | | |
Due after ten years | | | | | 487.1 | | | | | | 493.3 | | |
Subtotal | | | | | 1,152.1 | | | | | | 1,162.7 | | |
Other securities which provide for periodic payments: | | | | ||||||||||
Asset/Mortgage-backed securities | | | | | 357.5 | | | | | | 350.4 | | |
Structured hybrids | | | | | 22.2 | | | | | | 22.0 | | |
Total fixed maturity and equity securities included in funds withheld receivables | | | | $ | 1,531.8 | | | | | $ | 1,535.1 | | |
|
| | | Fiscal | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Realized losses on available-for-sale securities not included in funds withheld receivables | | | | $ | (0.5) | | | | | $ | (2.2) | | | | | $ | — | | |
Realized (losses) gains on equity securities not included in funds withheld receivables | | | | | — | | | | | | (4.7) | | | | | | 15.4 | | |
Realized and unrealized (losses) gains on related party investments and other invested assets not included in funds withheld receivables | | | | | (5.6) | | | | | | (49.8) | | | | | | 2.8 | | |
Realized and unrealized gains (losses) on derivative instruments not included in funds withheld receivables | | | | | 3.8 | | | | | | (7.6) | | | | | | 25.7 | | |
Realized and unrealized gains (losses) on funds withheld receivables | | | | | 150.3 | | | | | | (43.4) | | | | | | 91.1 | | |
Net investment gains (losses) | | | | $ | 148.0 | | | | | $ | (107.7) | | | | | $ | 135.0 | | |
|
| | | September 30, | | |||||||||
| | | 2016 | | | 2015 | | ||||||
Other invested assets | | | | $ | 8.4 | | | | | $ | 7.2 | | |
Derivatives | | | | | 5.9 | | | | | | 1.0 | | |
Asset-based loans | | | | | 1.7 | | | | | | 4.5 | | |
Corporate fixed-maturity securities, available-for-sale | | | | | — | | | | | | 14.1 | | |
Other assets | | | | | 3.0 | | | | | | 7.5 | | |
Total other assets | | | | $ | 19.0 | | | | | $ | 34.3 | | |
|
| | | September 30, 2015 | | |||||||||||||||||||||||||||
| | | Cost or Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | | | Carrying Value | | |||||||||||||||
Corporate fixed-maturity securities, available-for-sale | | | | $ | 14.1 | | | | | $ | — | | | | | $ | — | | | | | $ | 14.1 | | | | | $ | 14.1 | | |
Total | | | | $ | 14.1 | | | | | $ | — | | | | | $ | — | | | | | $ | 14.1 | | | | | $ | 14.1 | | |
|
| | | Fiscal | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
(Loss) income from continuing operations before income taxes: | | | | | |||||||||||||||
United States | | | | $ | (12.5) | | | | | $ | (68.7) | | | | | $ | 40.1 | | |
Outside the United States | | | | | — | | | | | | — | | | | | | — | | |
Total (loss) income before income taxes | | | | $ | (12.5) | | | | | $ | (68.7) | | | | | $ | 40.1 | | |
|
| | | Fiscal | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Current: | | | | | |||||||||||||||
Federal | | | | $ | (17.4) | | | | | $ | (16.4) | | | | | $ | 9.4 | | |
Deferred: | | | | | |||||||||||||||
Federal | | | | | 23.6 | | | | | | (7.6) | | | | | | 6.3 | | |
Income tax expense (benefit) | | | | $ | 6.2 | | | | | $ | (24.0) | | | | | $ | 15.7 | | |
|
| | | Fiscal | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Expected income tax (benefit) expense at Federal statutory rate | | | | $ | (4.4) | | | | | $ | (24.0) | | | | | $ | 14.0 | | |
Valuation allowance for deferred tax assets | | | | | 12.0 | | | | | | — | | | | | | — | | |
State and local income taxes, net of federal income tax benefit | | | | | (1.7) | | | | | | — | | | | | | 1.7 | | |
Other | | | | | 0.3 | | | | | | — | | | | | | — | | |
Reported income tax expense (benefit) | | | | $ | 6.2 | | | | | $ | (24.0) | | | | | $ | 15.7 | | |
Effective tax rate | | | | | (49.6)% | | | | | | 34.9% | | | | | | 39.2% | | |
| | | September 30, | | ||||||||||||
| | | 2016 | | | 2015 | | | ||||||||
Deferred tax assets: | | | | | ||||||||||||
Net operating loss carryforwards | | | | $ | 4.4 | | | | | $ | — | | | | ||
Unrealized tax losses on securities | | | | | 12.2 | | | | | | 17.1 | | | | ||
Insurance receivables | | | | | 0.4 | | | | | | 21.2 | | | | ||
Other | | | | | — | | | | | | 0.2 | | | | ||
Total deferred tax assets | | | | | 17.0 | | | | | | 38.5 | | | | ||
Less: Valuation allowance | | | | | (12.0) | | | | | | — | | | | ||
Net deferred tax assets | | | | | 5.0 | | | | | | 38.5 | | | | ||
Deferred tax liabilities: | | | | | ||||||||||||
Insurance reserves and claim related adjustments | | | | | (4.9) | | | | | | (14.9) | | | | ||
Other | | | | | (0.1) | | | | | | — | | | | ||
Total deferred tax liabilities | | | | | (5.0) | | | | | | (14.9) | | | | ||
Net deferred tax asset | | | | $ | — | | | | | $ | 23.6 | | | | ||
|
| | | Fiscal | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Unrecognized tax benefits at beginning of year | | | | $ | 1.9 | | | | | $ | 1.2 | | | | | $ | — | | |
Gross increase — tax positions in prior period | | | | | — | | | | | | 0.7 | | | | | | 1.2 | | |
Gross decrease — tax positions in prior period | | | | | (1.9) | | | | | | — | | | | | | — | | |
Gross increase — tax positions in current period | | | | | 0.5 | | | | | | — | | | | | | — | | |
Unrecognized tax benefits at end of year | | | | $ | 0.5 | | | | | $ | 1.9 | | | | | $ | 1.2 | | |
|
| | | September 30, | | ||||||||||||
Description | | | Balance Sheet Classification | | | 2016 | | | 2015 | | ||||||
Assets: | | | | | ||||||||||||
HGI Energy Notes | | | Related party investments | | | | $ | 91.0 | | | | | $ | 50.0 | | |
Salus Preferred Equity | | | Related party investments | | | | | 6.7 | | | | | | 10.4 | | |
EIC Preferred Equity | | | Related party investments | | | | | — | | | | | | 6.7 | | |
Salus CLO | | | Related party investments | | | | | 0.7 | | | | | | 8.3 | | |
Funds withheld receivables with FGL | | | Funds withheld receivable | | | | | 978.8 | | | | | | 1,058.0 | | |
Liabilities: | | | | | ||||||||||||
Insurance reserves | | | Insurance reserves | | | | | 1,054.1 | | | | | | 1,102.7 | | |
Accounts payable to FGL | | | Other liabilities | | | | | — | | | | | | 7.8 | | |
Accounts payable to HRG | | | Other liabilities | | | | | 0.2 | | | | | | — | | |
| | | September 30, | | |||||||||||||||
Statement of Comprehensive (Loss) Income Classification | | | 2016 | | | 2015 | | | 2014 | | |||||||||
Net investment income | | | | $ | 2.4 | | | | | $ | 6.1 | | | | | $ | 7.4 | | |
Net investment gains (losses) | | | | | 101.1 | | | | | | (57.2) | | | | | | 123.5 | | |
Benefits and other changes in policy reserves | | | | | 96.5 | | | | | | (70.1) | | | | | | 86.0 | | |
Acquisition and operating expenses | | | | | 0.6 | | | | | | — | | | | | | — | | |
| | | Amortized cost | | | Fair value | | | Amount at which shown in the balance sheet | | |||||||||
Fixed maturities: | | | | | |||||||||||||||
Bonds: | | | | | |||||||||||||||
United States Government and government agencies and authorities | | | | $ | 72.8 | | | | | $ | 74.0 | | | | | $ | 74.0 | | |
States, municipalities and political subdivisions | | | | | 61.6 | | | | | | 66.4 | | | | | | 66.4 | | |
Foreign governments | | | | | 2.6 | | | | | | 2.8 | | | | | | 2.8 | | |
Public utilities | | | | | 146.8 | | | | | | 145.5 | | | | | | 145.5 | | |
All other corporate bonds | | | | | 881.7 | | | | | | 887.8 | | | | | | 887.8 | | |
Mortgage-backed, asset-backed and collateralized | | | | | 357.5 | | | | | | 350.4 | | | | | | 350.4 | | |
Total fixed maturities | | | | | 1,523.0 | | | | | | 1,526.9 | | | | | | 1,526.9 | | |
Equity securities: | | | | | |||||||||||||||
Nonredeemable preferred stock | | | | | 8.8 | | | | | | 8.2 | | | | | | 8.2 | | |
Policy loans | | | | | 8.5 | | | | | | 8.5 | | | | | | 8.5 | | |
Short term investments | | | | | 95.5 | | | | | | 95.5 | | | | | | 95.5 | | |
Derivative investments | | | | | 9.8 | | | | | | 11.3 | | | | | | 11.3 | | |
Total investments included in funds withheld receivables(b) | | | | $ | 1,645.6 | | | | | $ | 1,650.4 | | | | | $ | 1,650.4 | | |
|
| | | As of or for the year ended September 30, | | |||||||||||||||
| | | 2016 | | | 2015 | | | 2014 | | |||||||||
Life Insurance (single segment): | | | | | |||||||||||||||
Future policy benefits, losses, claims and loss expenses | | | | $ | 1,751.3 | | | | | $ | 1,856.0 | | | | | $ | 1,418.4 | | |
Net investment income | | | | | 148.0 | | | | | | (107.7) | | | | | | 135.0 | | |
Benefits, claims, losses and settlement expenses | | | | | 153.2 | | | | | | (43.5) | | | | | | 92.8 | | |
Other operating expenses | | | | | (9.7) | | | | | | (13.4) | | | | | | (11.4) | | |
Fiscal 2016 | | | Gross Amount | | | Ceded to other companies | | | Assumed from other companies | | | Net Amount | | | Percentage of amount assumed to net | | |||||||||||||||
Life insurance in force | | | | $ | — | | | | | $ | — | | | | | $ | 244.5 | | | | | $ | 244.5 | | | | | | 100.0% | | |
Premiums and other considerations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Traditional life insurance premiums | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 5.7 | | | | | | 100.0% | | |
Annuity product charges | | | | | — | | | | | | — | | | | | | 96.3 | | | | | | 96.3 | | | | | | 100.0% | | |
Total premiums and other considerations | | | | $ | — | | | | | $ | — | | | | | $ | 96.3 | | | | | $ | 102.0 | | | | | | 100.0% | | |
|
Fiscal 2015 | | | Gross Amount | | | Ceded to other companies | | | Assumed from other companies | | | Net Amount | | | Percentage of amount assumed to net | | |||||||||||||||
Life insurance in force | | | | $ | — | | | | | $ | — | | | | | $ | 255.5 | | | | | $ | 255.5 | | | | | | 100.0% | | |
Premiums and other considerations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Traditional life insurance premiums | | | | $ | — | | | | | $ | — | | | | | $ | 3.9 | | | | | $ | 3.9 | | | | | | 100.0% | | |
Annuity product charges | | | | | — | | | | | | — | | | | | | 94.2 | | | | | | 94.2 | | | | | | 100.0% | | |
Total premiums and other considerations | | | | $ | — | | | | | $ | — | | | | | $ | 98.1 | | | | | $ | 98.1 | | | | | | 100.0% | | |
|
Fiscal 2014 | | | Gross Amount | | | Ceded to other companies | | | Assumed from other companies | | | Net Amount | | | Percentage of amount assumed to net | | |||||||||||||||
Life insurance in force | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | | —% | | |
Premiums and other considerations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Traditional life insurance premiums | | | | $ | — | | | | | $ | — | | | | | $ | 0.9 | | | | | $ | 0.9 | | | | | | 100.0% | | |
Annuity product charges | | | | | — | | | | | | — | | | | | | 5.3 | | | | | | 5.3 | | | | | | 100.0% | | |
Total premiums and other considerations | | | | $ | — | | | | | $ | — | | | | | $ | 6.2 | | | | | $ | 6.2 | | | | | | 100.0% | | |
|
| | | Page | | |||
Article I | | ||||||
DEFINITIONS AND TERMS | | ||||||
| | | | A-2 | | | |
| | | | A-11 | | | |
Article II | | ||||||
THE MERGER | | ||||||
| | | | A-12 | | | |
| | | | A-12 | | | |
| | | | A-12 | | | |
| | | | A-12 | | | |
| | | | A-12 | | | |
| | | | A-13 | | | |
| | | | A-13 | | | |
| | | | A-14 | | | |
| | | | A-15 | | | |
Article III | | ||||||
EXCHANGE OF CERTIFICATES | | ||||||
| | | | A-15 | | | |
| | | | A-15 | | | |
| | | | A-16 | | | |
| | | | A-16 | | | |
| | | | A-16 | | | |
| | | | A-16 | | | |
| | | | A-16 | | | |
Article IV | | ||||||
REPRESENTATIONS AND WARRANTIES OF THE COMPANY | | ||||||
| | | | A-17 | | | |
| | | | A-17 | | | |
| | | | A-18 | | | |
| | | | A-19 | | | |
| | | | A-19 | | | |
| | | | A-19 | | | |
| | | | A-20 | | | |
| | | | A-20 | | | |
| | | | A-21 | | | |
| | | | A-21 | | | |
| | | | A-21 | | | |
| | | | A-22 | | | |
| | | | A-23 | | | |
| | | | A-23 | | | |
| | | | A-23 | | | |
| | | | A-24 | | | |
| | | | A-25 | | | |
| | | | A-25 | | |
| | | Page | | |||
| | | | A-25 | | | |
| | | | A-26 | | | |
| | | | A-26 | | | |
| | | | A-26 | | | |
| | | | A-26 | | | |
| | | | A-26 | | | |
| | | | A-27 | | | |
| | | | A-27 | | | |
| | | | A-27 | | | |
| | | | A-27 | | | |
Article V | | ||||||
REPRESENTATIONS AND WARRANTIES OF CF CORP, PARENT AND MERGER SUB | | ||||||
| | | | A-27 | | | |
| | | | A-28 | | | |
| | | | A-28 | | | |
| | | | A-28 | | | |
| | | | A-29 | | | |
| | | | A-29 | | | |
| | | | A-29 | | | |
| | | | A-29 | | | |
| | | | A-30 | | | |
| | | | A-30 | | | |
| | | | A-31 | | | |
| | | | A-33 | | | |
| | | | A-33 | | | |
| | | | A-35 | | | |
| | | | A-35 | | | |
| | | | A-35 | | | |
| | | | A-35 | | | |
| | | | A-35 | | | |
| | | | A-35 | | | |
| | | | A-36 | | | |
| | | | A-36 | | | |
| | | | A-36 | | | |
Article VI | | ||||||
COVENANTS | | ||||||
| | | | A-36 | | | |
| | | | A-38 | | | |
| | | | A-39 | | | |
| | | | A-41 | | | |
| | | | A-43 | | | |
| | | | A-44 | | | |
| | | | A-46 | | | |
| | | | A-46 | | | |
| | | | A-46 | | | |
| | | | A-47 | | |
| | | Page | | |||
| | | | A-54 | | | |
| | | | A-55 | | | |
| | | | A-55 | | | |
| | | | A-56 | | | |
| | | | A-57 | | | |
| | | | A-57 | | | |
| | | | A-57 | | | |
| | | | A-57 | | | |
| | | | A-58 | | | |
| | | | A-58 | | | |
Article VII | | ||||||
CONDITIONS PRECEDENT | | ||||||
| | | | A-58 | | | |
| | | | A-58 | | | |
| | | | A-59 | | | |
Article VIII | | ||||||
TERMINATION, AMENDMENT AND WAIVER | | ||||||
| | | | A-59 | | | |
| | | | A-60 | | | |
| | | | A-61 | | | |
| | | | A-61 | | | |
| | | | A-61 | | | |
| | | | A-61 | | | |
Article IX | | ||||||
GENERAL PROVISIONS | | ||||||
| | | | A-62 | | | |
| | | | A-62 | | | |
| | | | A-63 | | | |
| | | | A-63 | | | |
| | | | A-64 | | | |
| | | | A-64 | | | |
| | | | A-64 | | | |
| | | | A-65 | | | |
| | | | A-65 | | | |
| | | | A-66 | | | |
| | | | A-66 | | | |
| | | | A-66 | | | |
| | | | A-67 | | | |
EXHIBITS | | ||||||
Exhibit A Surviving Corporation Certificate of Incorporation | | | |||||
Exhibit B Surviving Corporation By-laws | | | |||||
Exhibit C Stockholder Written Consent | | | |||||
SCHEDULES | | ||||||
Schedule 7.01(d) Governmental Consents | | |
| if to CF Corp, to: | | ||||||
| | | | CF Corporation 1701 Village Center Circle Las Vegas, Nevada 89134 | | |||
| | | | Facsimile: | | | 212-588-8713 | |
| | | | Email: | | | newton@cc.capital | |
| | | | Attention: | | | Douglas Newton | |
| with a copy to (which shall not constitute notice): | | ||||||
| | | | Debevoise & Plimpton LLP 919 Third Avenue New York, New York 10022 | | |||
| | | | Facsimile: | | | 212-909-6836 | |
| | | | Email: | | | nfpotter@debevoise.com | |
| | | | Attention: | | | Nicholas F. Potter, Esq. | |
| | | | Winston & Strawn LLP 200 Park Avenue New York, New York 10166 | | |||
| | | | Facsimile: | | | 212-294-4700 | |
| | | | Email: | | | jrubinstein@winston.com | |
| | | | Attention: | | | Joel L. Rubinstein, Esq. | |
| if to Parent or Merger Sub, to: | | ||||||
| | | | c/o CF Corporation 1701 Village Center Circle Las Vegas, Nevada 89134 | | |||
| | | | Facsimile: | | | 212-588-8713 | |
| | | | Email: | | | newton@cc.capital | |
| | | | Attention: | | | Douglas Newton | |
| with a copy to (which shall not constitute notice): | | ||||||
| | | | Debevoise & Plimpton LLP 919 Third Avenue New York, New York 10022 | | |||
| | | | Facsimile: | | | 212-909-6836 | |
| | | | Email: | | | nfpotter@debevoise.com | |
| | | | Attention: | | | Nicholas F. Potter, Esq. | |
| | | | Winston & Strawn LLP 200 Park Avenue New York, New York 10166 | | |||
| | | | Facsimile: | | | 212-294-4700 | |
| | | | Email: | | | jrubinstein@winston.com | |
| | | | Attention: | | | Joel L. Rubinstein, Esq. | |
| if to the Company, to | | ||||||
| | | | Fidelity & Guaranty Life 601 Locust Street, 14th Floor Des Moines, IA 50309-3738 | | |||
| | | | Email: | | | Eric.Marhoun@fglife.com | |
| | | | Attention: | | | General Counsel & Secretary | |
| with a copy to (which shall not constitute notice) : | | ||||||
| | | | Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036 | | |||
| | | | Facsimile: | | | 212-735-2000 | |
| | | | Email: | | | Todd.Freed@skadden.com | |
| | | | Attention: | | | Todd E. Freed, Esq. | |
| | | | Skadden, Arps, Slate, Meagher & Flom LLP 1440 New York Avenue, N.W. Washington, D.C. 20005 | | |||
| | | | Facsimile: | | | 202-393-5760 | |
| | | | Email: | | | Chris.Ulery@skadden.com | |
| | | | Attention: | | | Christopher J. Ulery, Esq. | |
| CF CORPORATION | | |||
| By: | | | /s/ Chinh Chu | |
| | | | Name: Chinh Chu | |
| | | | Title: Co-Executive Chairman | |
| FGL US Holdings Inc. | | |||
| By: | | | /s/ Menes O. Chee | |
| | | | Name: Menes O. Chee | |
| | | | Title: President and Secretary | |
| FGL Merger Sub Inc. | | |||
| By: | | | /s/ Menes O. Chee | |
| | | | Name: Menes O. Chee | |
| | | | Title: President and Secretary | |
| FIDELITY & GUARANTY LIFE | | |||
| By: | | | /s/ Christopher J. Littlefield | |
| | | | Name: Christopher J. Littlefield | |
| | | | Title: President and Chief Executive Officer | |
| CF CORPORATION | | |||
| By: | | | /s/ Chinh E. Chu | |
| | | | Name: Chinh E. Chu | |
| | | | Title: Co-Executive Chairman | |
| FGL US HOLDINGS INC. | | |||
| By: | | | /s/ Menes O. Chee | |
| | | | Name: Menes O. Chee | |
| | | | Title: President and Secretary | |
| FGL MERGER SUB INC. | | |||
| By: | | | /s/ Menes O. Chee | |
| | | | Name: Menes O. Chee | |
| | | | Title: President and Secretary | |
| FIDELITY & GUARANTY LIFE | | |||
| By: | | | /s/ Eric L. Marhoun | |
| | | | Name: Eric L. Marhoun | |
| | | | Title: Executive Vice President, General Counsel & Secretary | |
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