FIDELITY & GUARANTY LIFE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
|
| | | | | | | |
| | December 31,
2013 | | September 30,
2013 |
| | (Unaudited) | | |
| ASSETS | | | |
| Investments: | | | |
| Fixed maturities securities, available-for-sale, at fair value | $ | 16,204,024 |
| | $ | 15,541,526 |
|
| Equity securities, available-for-sale, at fair value | 286,922 |
| | 271,075 |
|
| Derivative investments | 294,531 |
| | 221,758 |
|
| Other invested assets | 316,552 |
| | 188,180 |
|
| Total investments | 17,102,029 |
| | 16,222,539 |
|
| Related party loans and investments | 96,442 |
| | 119,044 |
|
| Cash and cash equivalents | 751,639 |
| | 1,204,334 |
|
| Accrued investment income | 157,778 |
| | 159,287 |
|
| Reinsurance recoverable | 3,723,693 |
| | 3,728,632 |
|
| Intangibles, net | 560,930 |
| | 523,245 |
|
| Deferred tax assets | 240,091 |
| | 240,531 |
|
| Other assets | 157,023 |
| | 205,891 |
|
| Total assets | $ | 22,789,625 |
| | $ | 22,403,503 |
|
| | | | |
| LIABILITIES AND SHAREHOLDER'S EQUITY | | | |
| | | | |
| Contractholder funds | $ | 15,519,722 |
| | $ | 15,248,216 |
|
| Future policy benefits | 3,545,881 |
| | 3,556,808 |
|
| Funds withheld for reinsurance liabilities | 1,381,238 |
| | 1,407,713 |
|
| Liability for policy and contract claims | 60,331 |
| | 51,456 |
|
| Long-term debt | 300,000 |
| | 300,000 |
|
| Other liabilities | 805,182 |
| | 700,053 |
|
| Total liabilities | 21,612,354 |
| | 21,264,246 |
|
| | | | |
| | | | |
| Shareholder's equity: | | | |
| Common stock | — |
| | — |
|
| Additional paid-in capital | 468,166 |
| | 468,166 |
|
| Retained earnings | 602,971 |
| | 558,201 |
|
| Accumulated other comprehensive income | 106,134 |
| | 112,890 |
|
| Total shareholder's equity | 1,177,271 |
| | 1,139,257 |
|
| Total liabilities and shareholder's equity | $ | 22,789,625 |
| | $ | 22,403,503 |
|
| | | | |
FIDELITY & GUARANTY LIFE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
|
| | | | | | | |
| | Three months ended |
| | December 31,
2013 | | December 31,
2012 |
| | (Unaudited) |
| Revenues: | | | |
| Premiums | $ | 13,705 |
| | $ | 13,796 |
|
| Net investment income | 183,429 |
| | 169,645 |
|
| Net investment gains | 123,417 |
| | 146,475 |
|
| Insurance and investment product fees and other | 15,552 |
| | 13,728 |
|
| Total revenues | 336,103 |
| | 343,644 |
|
| Benefits and expenses: | | | |
| Benefits and other changes in policy reserves | 216,856 |
| | 83,644 |
|
| Acquisition and operating expenses, net of deferrals | 23,920 |
| | 25,226 |
|
| Amortization of intangibles | 22,892 |
| | 69,511 |
|
| Total benefits and expenses | 263,668 |
| | 178,381 |
|
| Operating income | 72,435 |
| | 165,263 |
|
| Interest expense | (5,624 | ) | | (5,486 | ) |
| Income from continuing operations before income taxes | 66,811 |
| | 159,777 |
|
| Income tax expense | 22,041 |
| | 53,815 |
|
| Net income | $ | 44,770 |
| | $ | 105,962 |
|
| | | | |
| | | | |
| Supplemental disclosures: | | | |
| Total other-than-temporary impairments | $ | (34 | ) | | $ | (509 | ) |
| Less non-credit portion of other-than-temporary impairments included in other comprehensive income | — |
| | — |
|
| Net other-than-temporary impairments | (34 | ) | | (509 | ) |
| Gains (losses) on derivative instruments | 111,538 |
| | (25,568 | ) |
| Other realized investment gains | 11,913 |
| | 172,552 |
|
| Total net investment gains | $ | 123,417 |
| | $ | 146,475 |
|
FIDELITY & GUARANTY LIFE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
|
| | | | | | | | |
| | | Three months ended |
| | | December 31,
2013 | | December 31,
2012 |
| | | (Unaudited) |
| Net income | | $ | 44,770 |
| | $ | 105,962 |
|
| | | | | |
| Other comprehensive income | | | | |
| Unrealized investment (losses) gains: | | | | |
| Changes in unrealized investment (losses) gains before reclassification adjustment | | (10,284 | ) | | 126,252 |
|
| Net reclassification adjustment for (gains) included in net investment gains | | (8,134 | ) | | (172,043 | ) |
| Changes in unrealized investment (losses) after reclassification adjustment | | (18,418 | ) | | (45,791 | ) |
| Adjustments to intangible assets | | 8,026 |
| | 27,961 |
|
| Changes in deferred income tax asset/liability | | 3,636 |
| | 6,241 |
|
| Net change to derive comprehensive income (loss) for the period | | (6,756 | ) | | (11,589 | ) |
| | | | | |
| Comprehensive income, net of tax | | $ | 38,014 |
| | $ | 94,373 |
|
FIDELITY & GUARANTY LIFE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | |
| (in thousands) | | Common Stock | | Additional Paid-in Capital/Contributed Capital | | Retained Earnings | | Accumulated Other Comprehensive Income (Loss) | | Total Shareholder’s Equity |
| | | | | | | | | | | |
| Balance, September 30, 2012 | | $ | — |
| | $ | 254,999 |
| | $ | 294,245 |
| | $ | 434,482 |
| | $ | 983,726 |
|
| Dividend payment | | — |
| | — |
| | (73,000 | ) | | — |
| | (73,000 | ) |
| Net income | | — |
| | — |
| | 336,956 |
| | — |
| | 336,956 |
|
| Unrealized investment losses, net | | — |
| | — |
| | — |
| | (321,592 | ) | | (321,592 | ) |
| Stock compensation | | — |
| | (163 | ) | | — |
| | — |
| | (163 | ) |
| Debt to equity conversion | | — |
| | 213,330 |
| | — |
| | — |
| | 213,330 |
|
| Balance, September 30, 2013 | | $ | — |
| | $ | 468,166 |
| | $ | 558,201 |
| | $ | 112,890 |
| | $ | 1,139,257 |
|
| Net income | | — |
| | — |
| | 44,770 |
| | — |
| | 44,770 |
|
| Unrealized investment losses, net | | — |
| | — |
| | — |
| | (6,756 | ) | | (6,756 | ) |
| Balance, December 31, 2013 | | $ | — |
| | $ | 468,166 |
| | $ | 602,971 |
| | $ | 106,134 |
| | $ | 1,177,271 |
|
| | | | | | | | | | | |
FIDELITY & GUARANTY LIFE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) |
| | | | | | | |
| | Three months ended |
| | December 31,
2013 | | December 31,
2012 |
| | (Unaudited) |
| Cash flows from operating activities: | | | |
| Net income | $ | 44,770 |
| | $ | 105,962 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: | | | |
| Depreciation of properties | 1,102 |
| | 908 |
|
| Amortization of intangibles | 22,892 |
| | 69,511 |
|
| Stock-based compensation | 6,148 |
| | (163 | ) |
| Amortization of debt issuance costs | 843 |
| | — |
|
| Deferred income taxes | 4,078 |
| | 122,033 |
|
| Interest credited/index credits and other changes to contractholder account balances | 178,298 |
| | 55,936 |
|
| Amortization of fixed maturity discounts and premiums | (14,845 | ) | | 13,235 |
|
| Net recognized (gains) on investments and derivatives | (123,417 | ) | | (146,475 | ) |
| Charges assessed to contractholders for mortality and administration | (9,577 | ) | | (6,778 | ) |
| Deferred policy acquisition costs | (52,551 | ) | | (35,698 | ) |
| Changes in operating assets and liabilities: | | | |
| Accrued investment income | 1,509 |
| | 38,572 |
|
| Reinsurance recoverable | (17,748 | ) | | (21,934 | ) |
| Future policy benefits | (10,927 | ) | | (22,517 | ) |
| Funds withheld from reinsurers | (39,924 | ) | | (672 | ) |
| Collateral (returned) posted | 2,739 |
| | — |
|
| Liability for policy and contract claims | 8,875 |
| | 8,574 |
|
| Other operating | 37,214 |
| | (108,661 | ) |
| Net cash provided by operating activities | 39,479 |
| | 71,833 |
|
| Cash flows from investing activities: | | | |
| Proceeds from investments sold, matured or repaid: | | | |
| Fixed maturities | 1,663,700 |
| | 2,913,381 |
|
| Equity securities | 42,249 |
| | 21 |
|
| Derivatives instruments and other invested assets | 102,702 |
| | 49,243 |
|
| Cost of investments acquired: | | | |
| Fixed maturities | (2,411,744 | ) | | (3,379,147 | ) |
| Equity securities | (63,154 | ) | | (15,965 | ) |
| Derivatives instruments and other invested assets | (167,943 | ) | | (45,335 | ) |
| Related party loans and investments | 22,602 |
| | (32,443 | ) |
| Capital expenditures | (2,960 | ) | | (1,349 | ) |
| Net cash (used in) investing activities | (814,548 | ) | | (511,594 | ) |
| Cash flows from financing activities: | | | |
| Contractholder account deposits | 772,257 |
| | 491,480 |
|
| Contractholder account withdrawals | (449,883 | ) | | (475,558 | ) |
| Payment on note payable | — |
| | (20,000 | ) |
| Net cash provided by (used in) financing activities | 322,374 |
| | (4,078 | ) |
| Change in cash & cash equivalents | (452,695 | ) | | (443,839 | ) |
| Cash and cash equivalents at beginning of period | 1,204,334 |
| | 1,049,374 |
|
| Cash and cash equivalents at end of period | $ | 751,639 |
| | $ | 605,535 |
|
| | | | |
| Supplemental disclosures of cash flow information: | | | |
| Interest paid | $ | 9,775 |
| | $ | 15,723 |
|
| Income taxes paid | $ | — |
| | $ | 1,683 |
|
