Exhibit 99.2
Investor Supplement
Second Fiscal Quarter 2015
(Fiscal Year Ended September 30)
The financial statements and financial exhibits included herein are unaudited. These financial statements and exhibits should be read in conjunction with the Company's periodic reports on Form 10-K, Form 10-Q and Form 8-K. The results of operations for interim periods should not be considered indicative of results to be expected for the full year.
Non-GAAP Financial Measures
This document contains non-GAAP financial measures to analyze the Company's operating performance for the periods presented. Because the Company's calculation of these measures may differ from similar measures used by other companies, investors should be careful when comparing the Company's non-GAAP financial measures to those of other companies.
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement - March 31, 2015
(unaudited)
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Consolidated Financial Highlights |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | 6 Months Ended |
| | March 31,
2015 | | December 31,
2014 | | September 30,
2014 | | June 30,
2014 | | March 31,
2014 | | March 31,
2015 | | March 31,
2014 |
| | (Dollars in millions) | | | | |
| Revenues: | | | | | | | | | | | | | |
| Premiums | $ | 15 |
| | $ | 11 |
| | $ | 14 |
| | $ | 13 |
| | $ | 15 |
| | $ | 26 |
| | $ | 28 |
|
| Net investment income | 208 |
| | 208 |
| | 201 |
| | 191 |
| | 184 |
| | 416 |
| | 368 |
|
| Net investment gains (losses) | (58 | ) | | 59 |
| | 40 |
| | 145 |
| | (2 | ) | | 1 |
| | 122 |
|
| Insurance and investment product fees and other | 22 |
| | 20 |
| | 17 |
| | 19 |
| | 18 |
| | 42 |
| | 33 |
|
| Total revenues | 187 |
| | 298 |
| | 272 |
| | 368 |
| | 215 |
| | 485 |
| | 551 |
|
| | | | | | | | | | | | | | |
| Adjusted Operating Income ("AOI") | $ | 23 |
| | $ | 27 |
| | $ | 28 |
| | $ | 35 |
| | $ | 48 |
| | 50 |
| | 73 |
|
| Net (loss) income | $ | (12 | ) | | $ | 14 |
| | $ | 39 |
| | $ | 57 |
| | $ | 25 |
| | $ | 2 |
| | $ | 68 |
|
| | | | | | | | | | | | | | |
| Per Unrestricted Common Shares Amounts: | | | | | | | | | | | | | |
| Basic: | | | | | | | | | | | | | |
| AOI | $ | 0.40 |
| | $ | 0.46 |
| | $ | 0.48 |
| | $ | 0.60 |
| | $ | 0.82 |
| | $ | 0.86 |
| | $ | 1.36 |
|
| Net (loss) income | $ | (0.21 | ) | | $ | 0.24 |
| | $ | 0.66 |
| | $ | 0.97 |
| | $ | 0.43 |
| | $ | 0.03 |
| | $ | 1.26 |
|
| Diluted: | | | | | | | | | | | | | |
| AOI | $ | 0.40 |
| | $ | 0.46 |
| | $ | 0.48 |
| | $ | 0.60 |
| | $ | 0.82 |
| | $ | 0.86 |
| | $ | 1.35 |
|
| Net (loss) income | $ | (0.21 | ) | | $ | 0.24 |
| | $ | 0.66 |
| | $ | 0.97 |
| | $ | 0.42 |
| | $ | 0.03 |
| | $ | 1.26 |
|
| | | | | | | | | | | | | | |
| Dividends Paid to Shareholders Per Share | $ | 0.065 |
| | $ | 0.065 |
| | $ | 0.065 |
| | $ | 0.065 |
| | $ | 0.065 |
| | $ | 0.130 |
| | $ | 0.98 |
|
| | | | | | | | | | | | | | |
| At Period End | | | | | | | | | | | | | |
| Cash and cash equivalents | $ | 849 |
| | $ | 556 |
| | $ | 576 |
| | $ | 818 |
| | $ | 702 |
| | $ | 849 |
| | $ | 702 |
|
| Total investments | $ | 19,465 |
| | $ | 19,335 |
| | $ | 18,802 |
| | $ | 18,371 |
| | $ | 17,815 |
| | $ | 19,465 |
| | $ | 17,815 |
|
| Total assets | $ | 25,195 |
| | $ | 24,752 |
| | $ | 24,153 |
| | $ | 23,839 |
| | $ | 23,356 |
| | $ | 25,195 |
| | $ | 23,356 |
|
| Contractholder funds | $ | 17,521 |
| | $ | 17,160 |
| | $ | 16,464 |
| | $ | 16,218 |
| | $ | 15,998 |
| | $ | 17,521 |
| | $ | 15,998 |
|
| Future policy benefits | $ | 3,481 |
| | $ | 3,484 |
| | $ | 3,504 |
| | $ | 3,516 |
| | $ | 3,534 |
| | $ | 3,481 |
| | $ | 3,534 |
|
| Notes payable | $ | 300 |
| | $ | 300 |
| | $ | 300 |
| | $ | 300 |
| | $ | 300 |
| | $ | 300 |
| | $ | 300 |
|
| Total equity | $ | 1,710 |
| | $ | 1,665 |
| | $ | 1,659 |
| | $ | 1,677 |
| | $ | 1,496 |
| | $ | 1,710 |
| | $ | 1,496 |
|
| Total equity excluding accumulated other comprehensive income ("AOCI") | $ | 1,302 |
| | $ | 1,320 |
| | $ | 1,310 |
| | $ | 1,274 |
| | $ | 1,220 |
| | $ | 1,302 |
| | $ | 1,220 |
|
| Common shares issued and outstanding | 58.74 |
| | 58.70 |
| | 58.44 |
| | 58.44 |
| | 58.44 |
| | $ | 58.74 |
| | $ | 58.44 |
|
| | | | | | | | | | | | | | |
| GAAP Book value per share | $ | 29.11 |
| | $ | 28.36 |
| | $ | 28.39 |
| | $ | 28.70 |
| | $ | 25.60 |
| | $ | 29.11 |
| | $ | 25.60 |
|
| GAAP Book Value per Share excluding AOCI | $ | 22.17 |
| | $ | 22.49 |
| | $ | 22.42 |
| | $ | 21.80 |
| | $ | 20.88 |
| | 22.17 |
| | 20.88 |
|
| Debt to total Capitalization excluding AOCI | 19 | % | | 19 | % | | 19 | % | | 19 | % | | 20 | % | | 19 | % | | 20 | % |
| Return on average shareholders' equity | (4 | )% | | 4 | % | | 12 | % | | 18 | % | | 8 | % | | — | % | | 24 | % |
| Statutory Book value per share(1) | $ | 20.87 |
| | $ | 20.64 |
| | $ | 19.41 |
| | $ | 18.93 |
| | $ | 19.27 |
| | 20.87 |
| | 19.27 |
|
| Statutory Book value per share excluding IMR and AVR(1) | $ | 30.97 |
| | $ | 31.49 |
| | $ | 30.69 |
| | $ | 30.29 |
| | $ | 29.15 |
| | 30.97 |
| | 29.15 |
|
(1) The statutory book value per share and the statutory book value per share excluding interest maintenance reserve ("IMR") and asset valuation reserve ("AVR") are estimates due to the timing of the filing of statutory statements and are prepared consistent with the presentation of the statutory financial statements in the combined annual statement.
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement - March 31, 2015
(unaudited)
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except per share data)
|
| | | | | | | | | | | | | | | | | | | |
| | March 31,
2015 | | December 31,
2014 | | September 30,
2014 | | June 30,
2014 | | March 31,
2014 |
| ASSETS | | | | | | | | | |
| Investments: | | | | | | | | | |
| Fixed maturity securities, available-for-sale, at fair value (amortized cost: March 31, 2015 - $17,161; September 30, 2014 - $16,692) | $ | 18,055 |
| | $ | 17,910 |
| | $ | 17,435 |
| | $ | 17,007 |
| | $ | 16,865 |
|
| Equity securities, available-for-sale, at fair value (amortized cost: March 31, 2015 - $574; September 30, 2014 - $679) | 606 |
| | 658 |
| | 698 |
| | 698 |
| | 353 |
|
| Derivative investments | 268 |
| | 306 |
| | 296 |
| | 325 |
| | 273 |
|
| Commercial mortgage loans | 304 |
| | 207 |
| | 136 |
| | 149 |
| | 117 |
|
| Other invested assets | 232 |
| | 253 |
| | 237 |
| | 192 |
| | 207 |
|
| Total investments | 19,465 |
| | 19,334 |
| | 18,802 |
| | 18,371 |
| | 17,815 |
|
| Related party loans | 75 |
| | 93 |
| | 113 |
| | 124 |
| | 146 |
|
| Cash and cash equivalents | 849 |
| | 556 |
| | 576 |
| | 818 |
| | 702 |
|
| Accrued investment income | 180 |
| | 164 |
| | 182 |
| | 157 |
| | 179 |
|
| Reinsurance recoverable | 3,691 |
| | 3,729 |
| | 3,665 |
| | 3,675 |
| | 3,694 |
|
| Intangibles, net | 610 |
| | 593 |
| | 515 |
| | 456 |
| | 500 |
|
| Deferred tax assets | 104 |
| | 132 |
| | 137 |
| | 110 |
| | 187 |
|
| Other assets | 221 |
| | 151 |
| | 163 |
| | 128 |
| | 133 |
|
| Total assets | $ | 25,195 |
| | $ | 24,752 |
| | $ | 24,153 |
| | $ | 23,839 |
| | $ | 23,356 |
|
| | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | |
| Contractholder funds | $ | 17,521 |
| | $ | 17,160 |
| | $ | 16,464 |
| | $ | 16,218 |
| | $ | 15,998 |
|
| Future policy benefits | 3,481 |
| | 3,484 |
| | 3,504 |
| | 3,516 |
| | 3,534 |
|
| Funds withheld for reinsurance liabilities | 1,329 |
| | 1,376 |
| | 1,331 |
| | 1,339 |
| | 1,362 |
|
| Liability for policy and contract claims | 60 |
| | 68 |
| | 58 |
| | 61 |
| | 61 |
|
| Debt | 300 |
| | 300 |
| | 300 |
| | 300 |
| | 300 |
|
| Other liabilities | 794 |
| | 698 |
| | 837 |
| | 728 |
| | 605 |
|
| Total liabilities | 23,485 |
| | 23,086 |
| | 22,494 |
| | 22,162 |
| | 21,860 |
|
| | | | | | | | | | |
| Shareholders' equity: | | | | | | | | | |
| Preferred stock ($.01 par value, 50,000,000 shares authorized, no shares issued at March 31, 2015) | — |
| | — |
| | — |
| | — |
| | — |
|
| Common stock ($.01 par value, 500,000,000 shares authorized, 58,739,810 issued and outstanding at March 31, 2015; 58,442,721 shares issued and outstanding at September 30, 2014) | 1 |
| | 1 |
| | 1 |
| | 1 |
| | 1 |
|
| Additional paid-in capital | 710 |
| | 704 |
| | 702 |
| | 701 |
| | 700 |
|
| Retained earnings | 601 |
| | 617 |
| | 607 |
| | 572 |
| | 519 |
|
| Accumulated other comprehensive income | 408 |
| | 345 |
| | 349 |
| | 403 |
| | 276 |
|
| Treasury Stock, at cost (463,394 shares at March 31, 2015; no shares at September 30, 2014) | (10 | ) | | (1 | ) | | — |
| | — |
| | — |
|
| Total shareholders' equity | 1,710 |
| | 1,666 |
| | $ | 1,659 |
| | $ | 1,677 |
| | $ | 1,496 |
|
| Total liabilities and shareholders' equity | $ | 25,195 |
| | $ | 24,752 |
| | $ | 24,153 |
| | $ | 23,839 |
| | $ | 23,356 |
|
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement - March 31, 2015
(unaudited)
Quarterly Summary - Most Recent 5 Quarters
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | 6 Months Ended |
| | March 31,
2015 | | December 31,
2014 | | September 30,
2014 | | June 30,
2014 | | March 31,
2014 | | March 31,
2015 | | March 31,
2014 |
| | (Dollars in millions) |
| Revenues: | | | | | | | | | | | | | |
| Traditional life insurance premiums | $ | 12 |
| | $ | 10 |
| | $ | 11 |
| | $ | 11 |
| | $ | 13 |
| | $ | 22 |
| | $ | 24 |
|
| Life contingent immediate annuity | 3 |
| | 1 |
| | 3 |
| | 2 |
| | 2 |
| | 4 |
| | 4 |
|
| Net investment income | 208 |
| | 208 |
| | 201 |
| | 191 |
| | 184 |
| | 416 |
| | 368 |
|
| Net investment (losses) gains | (58 | ) | | 59 |
| | 40 |
| | 145 |
| | (2 | ) | | 1 |
| | 122 |
|
| Surrender charges | 5 |
| | 4 |
| | 5 |
| | 6 |
| | 5 |
| | 9 |
| | 10 |
|
| Cost of insurance fees and other income | 17 |
| | 16 |
| | 12 |
| | 13 |
| | 13 |
| | 33 |
| | 23 |
|
| Total revenues | 187 |
| | 298 |
| | 272 |
| | 368 |
| | 215 |
| | 485 |
| | 551 |
|
| Benefits and expenses: | | | | | | | | | | | | | |
| Traditional life insurance policy benefits and change in future policy benefits | 17 |
| | 19 |
| | 18 |
| | 19 |
| | 16 |
| | 36 |
| | 32 |
|
| Life contingent immediate annuity benefits and changes in future policy benefits | 26 |
| | 10 |
| | 16 |
| | 10 |
| | 17 |
| | 36 |
| | 28 |
|
| Interest sensitive and index product benefits and changes in future policy benefits | 129 |
| | 195 |
| | 115 |
| | 213 |
| | 146 |
| | 324 |
| | 336 |
|
| General expenses | 27 |
| | 28 |
| | 21 |
| | 22 |
| | 29 |
| | 55 |
| | 56 |
|
| Acquisition expenses | 74 |
| | 88 |
| | 61 |
| | 51 |
| | 60 |
| | 162 |
| | 107 |
|
| Deferred acquisition costs | (73 | ) | | (87 | ) | | (61 | ) | | (50 | ) | | (57 | ) | | (160 | ) | | (105 | ) |
| Amortization of intangibles | (7 | ) | | 16 |
| | 41 |
| | 15 |
| | 11 |
| | 9 |
| | 34 |
|
| Total benefits and expenses | 193 |
| | 269 |
| | 211 |
| | 280 |
| | 222 |
| | 462 |
| | 488 |
|
| Operating (loss) income | (6 | ) | | 29 |
| | 61 |
| | 88 |
| | (7 | ) | | 23 |
| | 63 |
|
| Interest expense | (6 | ) | | (6 | ) | | (6 | ) | | (6 | ) | | (6 | ) | | (12 | ) | | (11 | ) |
| (Loss) income before income taxes | (12 | ) | | 23 |
| | 56 |
| | 82 |
| | (13 | ) | | 11 |
| | 52 |
|
| Income tax expense (benefit) | — |
| | 9 |
| | 17 |
| | 26 |
| | (38 | ) | | 9 |
| | (16 | ) |
| Net (loss) income | $ | (12 | ) | | $ | 14 |
| | $ | 39 |
| | $ | 57 |
| | $ | 25 |
| | $ | 2 |
| | $ | 68 |
|
| | | | | | | | | | | | | | |
| Net (loss) income per common share: | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Basic | $ | (0.21 | ) | | $ | 0.24 |
| | $ | 0.66 |
| | $ | 0.97 |
| | $ | 0.43 |
| | $ | 0.03 |
| | $ | 1.26 |
|
| Diluted | $ | (0.21 | ) | | $ | 0.24 |
| | $ | 0.66 |
| | $ | 0.97 |
| | $ | 0.42 |
| | $ | 0.03 |
| | $ | 1.26 |
|
| Weighted average common shares used in computing net (loss) income per common share: | | | | | | | | | | | | | |
| Basic | 58.03 |
| | 58.28 |
| | 58.27 |
| | 58.27 |
| | 58.27 |
| | 58.16 |
| | 53.66 |
|
| Diluted | 58.03 |
| | 58.45 |
| | 58.36 |
| | 58.47 |
| | 58.45 |
| | 58.33 |
| | 53.76 |
|
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement - March 31, 2015
(unaudited)
Reconciliation from Net Income (Loss) to Adjusted Operating Income ("AOI ")
All amounts are net of offsets related to value of business acquired ("VOBA") and deferred acquisition cost ("DAC") amortization and income taxes.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 3 Months Ended | | 6 Months Ended |
| | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 | | March 31, 2014 | | March 31, 2015 | | March 31, 2014 |
| | | (Dollars in millions, except per share data) |
| Net (loss) income | | $ | (12 | ) | | $ | 14 |
| | $ | 39 |
| | $ | 57 |
| | $ | 25 |
| | $ | 2 |
| | $ | 68 |
|
| Adjustments to arrive at AOI: | | | | | | | | | | | | | | |
| Effect of investment (gains) losses, net of offsets | | 21 |
| | 2 |
| | (6 | ) | | (40 | ) | | (4 | ) | | 23 |
| | (10 | ) |
| Effect of change in FIA embedded derivative discount rate, net of offsets | | 15 |
| | 20 |
| | 1 |
| | 8 |
| | 11 |
| | 35 |
| | (4 | ) |
| Effect of change in fair value of reinsurance related embedded derivative, net of offsets | | (1 | ) | | (8 | ) | | (6 | ) | | 10 |
| | 15 |
| | (9 | ) | | 18 |
|
| Effects of class action litigation reserves, net of offsets | | — |
| | (1 | ) | | — |
| | — |
| | 1 |
| | (1 | ) | | 1 |
|
| Residual net income of distributed subsidiaries | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| AOI | | $ | 23 |
| | $ | 27 |
| | $ | 28 |
| | $ | 35 |
| | $ | 48 |
| | $ | 50 |
| | $ | 73 |
|
| | | | | | | | | | | | | | | |
| Per diluted common share: | | | | | | | | | | | | | | |
| Net (loss) income | | $ | (0.21 | ) | | $ | 0.24 |
| | $ | 0.66 |
| | $ | 0.97 |
| | $ | 0.42 |
| | $ | 0.03 |
| | $ | 1.26 |
|
| Adjustments to arrive at AOI: | | | | | | | | | | | | | | |
| Effect of investment (gains) losses, net of offsets | | 0.37 |
| | 0.04 |
| | (0.09 | ) | | (0.68 | ) | | (0.06 | ) | | 0.40 |
| | (0.19 | ) |
| Effect of change in FIA embedded derivative discount rate, net of offsets | | 0.26 |
| | 0.34 |
| | 0.01 |
| | 0.14 |
| | 0.18 |
| | 0.60 |
| | (0.07 | ) |
| Effect of change in fair value of reinsurance related embedded derivative, net of offsets | | (0.02 | ) | | (0.15 | ) | | (0.10 | ) | | 0.17 |
| | 0.26 |
| | (0.15 | ) | | 0.33 |
|
| Effects of class action litigation reserves, net of offsets | | — |
| | (0.01 | ) | | — |
| | — |
| | 0.02 |
| | (0.02 | ) | | 0.02 |
|
| Residual net income of distributed subsidiaries | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| AOI per diluted share | | $ | 0.40 |
| | $ | 0.46 |
| | $ | 0.48 |
| | $ | 0.60 |
| | $ | 0.82 |
| | $ | 0.86 |
| | $ | 1.35 |
|
NON-GAAP FINANCIAL MEASURES
AOI is a non-GAAP economic measure we use to evaluate financial performance each period for the periods subsequent to the Fidelity & Guaranty Life Holdings, Inc. ("FGLH") Acquisition. AOI is calculated by adjusting net income to eliminate (i) the impact of net investment gains including other than temporary impairments ("OTTI") losses recognized in operations, but excluding gains and losses on derivatives, (ii) the effect of changes in the rates used to discount the fixed indexed annuity (“FIA”) embedded derivative liability, (iii) the effect of change in fair value of reinsurance related embedded derivative, (iv) the effect of class action litigation reserves and (v) residual net income of distributed subsidiaries we no longer own. All adjustments to AOI are net of the corresponding VOBA, DAC and income tax impact related to these adjustments as appropriate. While these adjustments are an integral part of the overall performance of Fidelity & Guaranty Life ("FGL"), market conditions impacting these items can overshadow the underlying performance of the business. Accordingly, we believe using a measure which excludes their impact is effective in analyzing the trends of our operations. Together with net income we believe AOI provides meaningful financial metrics that help investors understand our underlying results and profitability.
Our non-GAAP measures may not be comparable to similarly titled measures of other organizations because other organizations may not calculate such non-GAAP measures in the same manner as we do.
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement - March 31, 2015
(unaudited)
In the second quarter of 2014, we revised our definition of AOI from a pre-tax basis to an after-tax basis to better reflect the basis on which the performance of our business is internally assessed. AOI now includes interest expense and an effective tax rate of 35.0% is now applied to reconciling items made to net income. All prior periods presented have been revised to reflect this new definition. Additionally, during the second quarter of 2014 we revised our definition of AOI to exclude the effect of class action litigation reserves, net of the corresponding VOBA, DAC and income tax impact related to these adjustments. Lastly, during the second quarter of 2014 we revised our definition of AOI to exclude residual net income of distributed subsidiaries; specifically the portion of Front Street Re income not already accounted for in the AOI adjustments above. From the inception of the reinsurance treaty on December 31, 2012 through August 9, 2013, Front Street Re was a fully consolidated subsidiary of FGL. On August 9, 2013 in preparation for the initial public offering ("IPO"), FGL distributed this subsidiary to its parent company. Adjusting for this distribution provides a better view of the underlying performance of FGL as it is now structured post-IPO.
Summary of Adjustments to Arrive at AOI (Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 3 Months Ended | | 6 Months Ended |
| | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 | | March 31, 2014 | | March 31, 2015 | | March 31, 2014 |
| | | (Dollars in millions) | | | |
| Revenue: | | | | | | | | | | | | | | |
| Net investment gains (a) | | $ | 49 |
| | $ | (14 | ) | | $ | (23 | ) | | $ | (52 | ) | | $ | 22 |
| | $ | 34 |
| | $ | 15 |
|
| (Decrease) increase in total revenues | | 49 |
| | (14 | ) | | (23 | ) | | (52 | ) | | 22 |
| | 34 |
| | 15 |
|
| | | | | | | | | | | | | | | |
| Benefits and expenses: | | | | | | | | | | | | | | |
| Benefits and other changes in policy reserves (b) | | 34 |
| | 51 |
| | 1 |
| | 20 |
| | 26 |
| | 85 |
| | (9 | ) |
| Acquisition and operating expenses, net of deferrals (c) | | — |
| | (1 | ) | | — |
| | 1 |
| | 2 |
| | (1 | ) | | 2 |
|
| Amortization of intangibles | | (29 | ) | | (16 | ) | | 5 |
| | (3 | ) | | (15 | ) | | (45 | ) | | — |
|
| Increase (decrease) in total benefits and expenses | | 5 |
| | 34 |
| | 6 |
| | 18 |
| | 13 |
| | 39 |
| | (7 | ) |
| | | | | | | | | | | | | | | |
| (Decrease) increase in pre-tax operating income | | 54 |
| | 20 |
| | (17 | ) | | (34 | ) | | 35 |
| | 73 |
| | 8 |
|
| | | | | | | | | | | | | | | |
| Increase (decrease) in income tax expense (benefit) | | (19 | ) | | (7 | ) | | 6 |
| | 12 |
| | (12 | ) | | (25 | ) | | (3 | ) |
| Increase (decrease) due to residual net income of distributed subsidiaries | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Increase (decrease) in net income (loss) | | $ | 35 |
| | $ | 13 |
| | $ | (11 | ) | | $ | (22 | ) | | $ | 23 |
| | $ | 48 |
| | $ | 5 |
|
(a) Net investment gains: includes the effects of net investment gains and change in fair value of the reinsurance related embedded derivative.
(b) Benefits and other changes in policy reserves: includes the effects of the change in fair value of the FIA embedded derivative discount rate.
(c) Acquisition and operating expenses: includes the effects of the class action litigation reserve.
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement - March 31, 2015
(unaudited)
Capitalization/Book Value per Share
|
| | | | | | | | | | | | | | | | | | | | | |
| | | March 31,
2015 | | December 31,
2014 | | September 30,
2014 | | June 30,
2014 | | March 31,
2014 | |
| | | (Dollars in millions, except per share data) |
| Capitalization: | | | | | | | | | | | |
| Debt | | $ | 300 |
| | $ | 300 |
| | $ | 300 |
| | $ | 300 |
| | $ | 300 |
| |
| Total debt | | 300 |
| | 300 |
| | 300 |
| | 300 |
| | 300 |
| |
| Total shareholders' equity | | 1,710 |
| | 1,665 |
| | 1,659 |
| | 1,677 |
| | 1,496 |
| |
| Total capitalization | | 2,010 |
| | 1,965 |
| | 1,959 |
| | 1,977 |
| | 1,796 |
| |
| AOCI | | 408 |
| | 345 |
| | 349 |
| | 403 |
| | 276 |
| |
| Total capitalization excluding AOCI (a) | | $ | 1,602 |
| | $ | 1,620 |
| | $ | 1,610 |
| | $ | 1,574 |
| | $ | 1,520 |
| |
| | | | | | | | | | | | |
| Total shareholders' equity | | 1,710 |
| | 1,665 |
| | 1,659 |
| | 1,677 |
| | 1,496 |
| |
| AOCI | | 408 |
| | 345 |
| | 349 |
| | 403 |
| | 276 |
| |
| Total shareholders' equity excluding AOCI (a) | | $ | 1,302 |
| | $ | 1,320 |
| | $ | 1,310 |
| | $ | 1,274 |
| | $ | 1,220 |
| |
| | | | | | | | | | | | |
| Common shares outstanding | | 58.74 |
| | 58.70 |
| | 58.44 |
| | 58.44 |
| | 58.44 |
| |
| | | | | | | | | | |
|
| |
| Book Value per Share: (b) | |
|
| | | | | | | | | |
| GAAP Book value per share including AOCI | | $ | 29.11 |
| | $ | 28.36 |
| | $ | 28.39 |
| | $ | 28.70 |
| | $ | 25.60 |
|
|
| GAAP Book value per share excluding AOCI (a) | | $ | 22.17 |
| | $ | 22.49 |
| | $ | 22.42 |
| | $ | 21.80 |
| | $ | 20.88 |
| |
| | | | | | | | | | | | |
| | | Twelve months ended |
| Twelve Month Rolling Average Return on Equity ("ROE") | | March 31,
2015 | | December 31,
2014 | | September 30,
2014 | | June 30,
2014 | | March 31,
2014 | |
| Return on Shareholders' Equity (c) | | | | | | | | | | | |
| Return on average shareholders' equity, excluding AOCI (c) | | 8 | % | | 11 | % | | 14 | % | | 20 | % | | 21 | % | |
| | | | | | | | | | | | |
| Return on Shareholders' Equity - AOI (d) | | | | | | | | | | | |
| Adjusted Operating ROE, excluding AOCI (d) | | 9 | % | | 11 | % | | 11 | % | | 16 | % | | 15 | % | |
| | | | | | | | | | | | |
| | | Three months ended |
| Quarterly Average ROE | | March 31,
2015 | | December 31,
2014 | | September 30,
2014 | | June 30,
2014 | | March 31,
2014 | |
| Return on average shareholders' equity, excluding AOCI (c) | | (4 | )% | | 4 | % | | 12 | % | | 18 | % | | 8 | % | |
| Adjusted Operating ROE, excluding AOCI (d) | | 7 | % | | 8 | % | | 9 | % | | 11 | % | | 16 | % | |
| | | | | | | | | | | | |
| Debt-to-Capital Ratios: (e) | | | | | | | | | | | |
| Long-term debt/Total capitalization excluding AOCI | | 19 | % | | 19 | % | | 19 | % | | 19 | % | | 20 | % | |
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement - March 31, 2015
(unaudited)
(a) Total capitalization, total stockholders’ equity and book value per share excluding AOCI (a non-GAAP financial measure) are based on stockholders’ equity excluding the effect of AOCI. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments, we believe these non-GAAP financial measures provide useful supplemental information.
(b) Book value per share including and excluding AOCI is calculated as total stockholders’ equity and total stockholders’ equity excluding AOCI divided by the total number of shares of common stock outstanding.
(c) Return on Equity, excluding AOCI is a non-GAAP measure. It is calculated by dividing net income by total average equity excluding AOCI. Average equity excluding AOCI for the twelve months rolling, is the average of 5 points throughout the period and for the quarterly average equity is calculated using the beginning and ending equity for the period. For periods less than a full fiscal year, amounts disclosed in the table are annualized.
(d) Adjusted Operating ROE, excluding AOCI is a non-GAAP measure. It is calculated by dividing AOI by total average equity excluding AOCI. Average equity excluding AOCI for the twelve months rolling, is the average of 5 points throughout the period and for the quarterly average equity is calculated using the beginning and ending equity for the period. For periods less than a full fiscal year, amounts disclosed in the table are annualized.
(e) Debt-to-capital ratios are computed using total capitalization excluding AOCI. Adjusted debt includes the total senior unsecured debentures.
Financial Strength Ratings
|
| | | | | | | | |
| | | S&P | | A.M. Best | | Moody's | | Fitch |
| As of Date of Financial Supplement | | | | | | | | |
| Fidelity and Guaranty Life Insurance Company | | BBB- | | B++ | | Baa3 | | BBB |
| Fidelity and Guaranty Life Insurance Company of New York | | BBB- | | B++ | | Baa3 | | BBB |
| Rating Agency Outlook | | Stable | | Stable | | Stable | | Stable |
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement - March 31, 2015
(unaudited)
Net Investment Spread Results
|
| | | | | | | | | | | | | | | |
| (Dollars in millions) | 3 Months Ended | | 6 Months Ended |
| | March 31, 2015 | | March 31, 2014 | | March 31, 2015 | | March 31, 2014 |
| Yield on average assets under management "AAUM" (at amortized cost) | 4.72 | % | | 4.52 | % | | 4.77 | % | | 4.58 | % |
| Less: Interest credited and option cost | (2.81 | )% | | (2.89 | )% | | (2.90 | )% | | (2.96 | )% |
| Total net investment spread - All product lines | 1.91 | % | | 1.63 | % | | 1.87 | % | | 1.62 | % |
| | | | | | | | |
| FIA net investment spread | 2.91 | % | | 2.82 | % | | 2.90 | % | | 2.73 | % |
| | | | | | | | |
| Investment book yield - bonds purchased during the period (b) | 4.73 | % | | 5.10 | % | | 4.95 | % | | 5.28 | % |
| | | | | | | | |
| AAUM (a) | $ | 17,616 |
| | $ | 16,314 |
| | $ | 17,434 |
| | $ | 16,042 |
|
(a) AAUM is a non-GAAP measure and is the sum of (i) total invested assets at amortized cost, excluding derivatives; and including (ii) related party loans and investments and (iii) cash and cash equivalents at the end of each month in the period divided by the number of months in the period.
(b) Investment book yield on bonds purchased during the period excludes yield on short-term treasuries and cash and cash equivalents.
Sales Results by Product
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (Dollars in millions) | | 3 Months Ended | | 6 Months Ended |
| | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 | | March 31, 2014 | | March 31, 2015 | | March 31, 2014 |
| | | | | | | | | | | | | | | |
| Fixed index annuities | | $ | 600 |
| | $ | 648 |
| | $ | 455 |
| | $ | 379 |
| | $ | 318 |
| | 1,248 |
| | 619 |
|
| Fixed rate annuities | | 10 |
| | 255 |
| | 47 |
| | 13 |
| | 409 |
| | 265 |
| | 649 |
|
| Index universal life | | 7 |
| | 5 |
| | 6 |
| | 6 |
| | 5 |
| | 14 |
| | 10 |
|
| All other products | | 7 |
| | 9 |
| | 8 |
| | 7 |
| | 5 |
| | 15 |
| | 6 |
|
| Total Sales | | $ | 624 |
| | $ | 917 |
| | $ | 516 |
| | $ | 405 |
| | $ | 737 |
| | $ | 1,542 |
| | $ | 1,284 |
|
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement - March 31, 2015
(unaudited)
Annuity Account Balance Rollforward (a)
|
| | | | | | | | | | | | | | | | | | | | |
| (Dollars in millions) | | Three months ended |
| | | March 31, 2015 | | December 31, 2014 | | September 30, 2014 | | June 30, 2014 | | March 31, 2014 |
| | | | | | | | | | | |
| Account balances at beginning of period: | | $ | 13,254 |
| | $ | 12,643 |
| | $ | 12,330 |
| | $ | 12,145 |
| | $ | 11,626 |
|
| Net deposits | | 608 |
| | 828 |
| | 500 |
| | 392 |
| | 721 |
|
| Premium and interest bonuses | | 9 |
| | 9 |
| | 8 |
| | 9 |
| | 8 |
|
| Fixed interest credited and index credits | | 115 |
| | 126 |
| | 132 |
| | 128 |
| | 120 |
|
| Guaranteed product rider fees | | (9 | ) | | (7 | ) | | (5 | ) | | (6 | ) | | (6 | ) |
| Surrenders, withdrawals, deaths, etc. | | (322 | ) | | (345 | ) | | (322 | ) | | (338 | ) | | (324 | ) |
| Account balance at end of period | | $ | 13,655 |
| | $ | 13,254 |
| | $ | 12,643 |
|
| $ | 12,330 |
|
| $ | 12,145 |
|
(a) The rollforward reflects the account balance of our fixed index annuities and fixed rate annuities.
Annuity Deposits by Product Type
|
| | | | | | | | | | | | | | | | |
| | | 3 Months Ended | | 6 Months Ended |
| Product Type | | March 31, 2015 | | March 31, 2014 | | March 31, 2015 | | March 31, 2014 |
| | | (Dollars in millions) |
| Fixed Index Annuities: | | | | | | | | |
| Index Strategies | | $ | 521 |
| | $ | 271 |
| | $ | 1,092 |
| | $ | 523 |
|
| Fixed Strategy | | 77 |
| | 45 |
| | 156 |
| | 96 |
|
| | | 598 |
|
| 316 |
|
| 1,248 |
|
| 619 |
|
| | | | | | | | | |
| Fixed Rate Annuities: | | | | | | | | |
| Single-Year Rate Guaranteed | | 8 |
| | 14 |
| | 20 |
| | 26 |
|
| Multi-Year Rate Guaranteed | | 4 |
| | 392 |
| | 240 |
| | 623 |
|
| | | | | | | | | |
| Total before coinsurance ceded | | 610 |
| | 722 |
| | 1,508 |
| | 1,268 |
|
| Coinsurance ceded | | 2 |
| | 1 |
| | 73 |
| | 1 |
|
| Net after coinsurance ceded | | $ | 608 |
|
| $ | 721 |
|
| $ | 1,435 |
|
| $ | 1,267 |
|
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement - March 31, 2015
(unaudited)
Surrender Charge Protection and Account Values by Product Type
Annuity Surrender Charges and Account Values (net of reinsurance) at March 31, 2015:
|
| | | | | | | | | | | | | | |
| | | Surrender Charge | | Net Account Value |
| Product Type | | Avg. Years at Issue | | Avg. Years Remaining | | Avg. % Remaining | | Dollars in millions | | % |
| | | | | | | | | | | |
| Fixed Index Annuities | | 12 | | 6 | | 9 | % | | $ | 10,775 |
| | 79 | % |
| Single-Year Rate Guaranteed | | 12 | | 1 | | 1 | % | | 670 |
| | 5 | % |
| Multi-Year Rate Guaranteed | | 6 | | 4 | | 8 | % | | 2,210 |
| | 16 | % |
| Total | | | | | | | | $ | 13,655 |
| | 100 | % |
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement - March 31, 2015
(unaudited)
Annuity Liability Characteristics
|
| | | | | | | | |
| | | Fixed Annuities Account Value | | Fixed Index Annuities Account Value |
| | | (Dollars in millions) |
| SURRENDER CHARGE PERCENTAGES: | | | | |
| No surrender charge | | $ | 638 |
| | $ | 1,087 |
|
| 0.0% < 2.0% | | 41 |
| | 51 |
|
| 2.0% < 4.0% | | 138 |
| | 910 |
|
| 4.0% < 6.0% | | 195 |
| | 811 |
|
| 6.0% < 8.0% | | 746 |
| | 894 |
|
| 8.0% < 10.0% | | 1,063 |
| | 1,410 |
|
| 10.0% or greater | | 59 |
| | 5,612 |
|
| | | $ | 2,880 |
| | $ | 10,775 |
|
|
| | | | | | | |
| | | Fixed and Fixed Index Annuities Account Value | | Weighted Average Surrender Charge |
| | | (Dollars in millions) | | |
| SURRENDER CHARGE EXPIRATION BY YEAR: | | | | |
| Out of Surrender Charge | | $ | 1,790 |
| | — | % |
| 2015 | | 738 |
| | 3 | % |
| 2016 - 2017 | | 2,166 |
| | 6 | % |
| 2018 - 2019 | | 2,564 |
| | 9 | % |
| 2020 - 2021 | | 1,439 |
| | 11 | % |
| Thereafter | | $ | 4,958 |
| | 12 | % |
| | | 13,655 |
| | 8 | % |
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement - March 31, 2015
(unaudited)
|
| | | | | | | | |
| | | Fixed Annuities Account Value | | Fixed Index Annuities Account Value |
| | | (Dollars in millions) |
| CREDITED RATE (INCLUDING BONUS INTEREST) VS. ULTIMATE MINIMUM GUARANTEED RATE DIFFERENTIAL: | | | | |
| No differential | | $ | 1,164 |
| | $ | 913 |
|
| 0.0% - 1.0% | | 474 |
| | 1,096 |
|
| 1.0% - 2.0% | | 167 |
| | 101 |
|
| 2.0% - 3.0% | | 979 |
| | 16 |
|
| 3.0% - 4.0% | | 96 |
| | 1 |
|
| 4.0% - 5.0% | | — |
| | — |
|
| Allocated to index strategies | | — |
| | 8,648 |
|
| | | $ | 2,880 |
| | $ | 10,775 |
|
FIXED INDEX ANNUITIES ACCOUNT VALUE - INDEX STRATEGIES
Monthly Average, Point to Point and Gain Trigger Strategies with Cap
|
| | | | | | | | | | | | | | | | | | | | |
| | | Minimum Guaranteed Cap |
| | | 1% | | 2% | | 3% | | 5% | | 6% |
| Current Cap | | (Dollars in millions) |
| At minimum | | $ | — |
| | $ | — |
| | $ | 620 |
| | $ | 915 |
| | $ | — |
|
| 2-3% | | 63 |
| | — |
| | — |
| | — |
| | — |
|
| 3-4% | | 226 |
| | — |
| | 601 |
| | — |
| | — |
|
| 4-5% | | 157 |
| | — |
| | 851 |
| | — |
| | — |
|
| 5-6% | | 16 |
| | — |
| | 669 |
| | 64 |
| | — |
|
| 6-7% | | 10 |
| | — |
| | 205 |
| | 24 |
| | 1 |
|
| 7% + | | 9 |
| | 1 |
| | 139 |
| | 5 |
| | 58 |
|
| Total: | | $ | 481 |
| | $ | 1 |
| | $ | 3,085 |
| | $ | 1,008 |
| | $ | 59 |
|
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement - March 31, 2015
(unaudited)
Monthly Point-to-Point with Cap |
| | | | |
| | | Minimum Guaranteed Cap 1% |
| Current Cap | | (Dollars in millions) |
| At minimum | | $ | 6 |
|
| 1% to 2% | | 2,233 |
|
| 2% to 3% | | 1,054 |
|
| 3% + | | 447 |
|
| Total: | | $ | 3,740 |
|
3 Year Step Forward with Cap |
| | | | |
| | | Minimum Guaranteed Cap 5% |
| Current Cap | | (Dollars in millions) |
| At minimum | | $ | 17 |
|
| 5% to 7% | | 51 |
|
| 7% to 9% | | 49 |
|
| 9% to 11% | | 25 |
|
| 11% to 13% | | 14 |
|
| 13% + | | — |
|
| Total: | | $ | 156 |
|
There is an additional $118mm Account Value allocated to strategies not listed above. Of this $118 million, $17.1 million is at the guaranteed rates.
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement - March 31, 2015
(unaudited)
Summary of Invested Assets by Asset Class
|
| | | | | | | | | | | | | | | | | | | | | | |
| (Dollars in millions) | | March 31, 2015 | | September 30, 2014 |
| | | Amortized Cost | | Carrying Value | | Percent | | Amortized Cost | | Carrying Value | | Percent |
| | | | | | | | | | | | | |
| Fixed maturity securities, available-for-sale: | | | | | | | | | | | | |
| United States Government full faith and credit | | $ | 309 |
| | $ | 320 |
| | 2 | % | | $ | 291 |
| | $ | 297 |
| | 2 | % |
| United States Government sponsored entities | | 95 |
| | 98 |
| | 1 | % | | 104 |
| | 107 |
| | 1 | % |
| United States municipalities, states and territories | | 1,281 |
| | 1,436 |
| | 7 | % | | 1,150 |
| | 1,260 |
| | 7 | % |
| Corporate securities: | | | | | | | | | | | | |
| Finance, insurance and real estate | | 4,555 |
| | 4,909 |
| | 25 | % | | 4,485 |
| | 4,743 |
| | 25 | % |
| Manufacturing, construction and mining | | 798 |
| | 792 |
| | 4 | % | | 871 |
| | 883 |
| | 5 | % |
| Utilities and related sectors | | 1,793 |
| | 1,906 |
| | 10 | % | | 1,822 |
| | 1,922 |
| | 10 | % |
| Wholesale/retail trade | | 1,008 |
| | 1,072 |
| | 5 | % | | 1,046 |
| | 1,088 |
| | 6 | % |
| Services, media and other | | 1,099 |
| | 1,148 |
| | 6 | % | | 1,104 |
| | 1,143 |
| | 6 | % |
| Hybrid securities | | 1,303 |
| | 1,357 |
| | 7 | % | | 1,279 |
| | 1,316 |
| | 7 | % |
| Non-agency residential mortgage-backed securities | | 2,013 |
| | 2,096 |
| | 11 | % | | 1,881 |
| | 2,007 |
| | 10 | % |
| Commercial mortgage-backed securities | | 707 |
| | 729 |
| | 4 | % | | 618 |
| | 637 |
| | 3 | % |
| Asset-backed securities | | 2,200 |
| | 2,192 |
| | 11 | % | | 2,040 |
| | 2,032 |
| | 11 | % |
| Equity securities (a) | | 574 |
| | 606 |
| | 3 | % | | 679 |
| | 698 |
| | 3 | % |
| Commercial mortgage loans | 304 |
| | 304 |
| | 2 | % | | 136 |
| | 136 |
| | 1 | % |
| Other (primarily derivatives and policy loans) | | 444 |
| | 500 |
| | 2 | % | | 415 |
| | 533 |
| | 3 | % |
| Total | | $ | 18,483 |
| | $ | 19,465 |
| | 100 | % | | 17,922 |
| | $ | 18,802 |
| | 100 | % |
Credit Quality of Fixed Maturity Securities at March 31, 2015
|
| | | | | | | | | | | | | | | | |
| NAIC Designation | | Fair Value | | Percent | | Rating Agency Rating | | Fair Value | | Percent |
| | | (Dollars in millions) | | | | | | (Dollars in millions) | | |
| 1 | | $ | 10,421 |
| | 58 | % | | AAA | | $ | 1,785 |
| | 10 | % |
| 2 | | 6,923 |
| | 38 | % | | AA | | 2,032 |
| | 11 | % |
| 3 | | 465 |
| | 3 | % | | A | | 4,060 |
| | 23 | % |
| 4 | | 198 |
| | 1 | % | | BBB | | 7,409 |
| | 41 | % |
| 5 | | 48 |
| | — | % | | BB | | 741 |
| | 4 | % |
| 6 | | — |
| | — | % | | B and below | | 2,028 |
| | 11 | % |
| | | $ | 18,055 |
| | 100 | % | | | | $ | 18,055 |
| | 100 | % |
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement - March 31, 2015
(unaudited)
Other-than-Temporary Impairment at March 31, 2015
In the second quarter of 2015, the Company recognized credit-related impairment losses of $61 (net of reinsurance) including $59 related to direct and indirect investments in RadioShack ("RSH"). A summary of the RSH impairments by investment are as follows:
|
| | | | | | |
| Type | | Balance Sheet Classification | | Impairment Loss |
| Collateralized loan obligations (a) | | Fixed maturities, available-for-sale | | $ | 25 |
|
| Preferred equity (a) | | Equity securities, available-for-sale | | 21 |
|
| Participations | | Other invested assets | | 35 |
|
| | | Impairment losses, gross of reinsurance | | 81 |
|
| Preferred equity (a) | | Equity securities, available-for-sale | | (21 | ) |
| Collateralized loan obligations (a) | | Fixed maturities, available-for-sale | | (1 | ) |
| | | Impairment losses, net of reinsurance | | 59 |
|
| | | Amortization of intangibles expense | | (15 | ) |
| | | Income tax expense | | (12 | ) |
| | | Total net income impact of RSH impairments | | $ | 32 |
|
(a) Preferred equity ($21) and a portion of the collateralized loan obligations ($1) are included in the Front Street Re (Cayman) Ltd. ("FSRCI") funds withheld portfolio, accordingly all income or losses on these assets are ceded to FSRCI.
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement - March 31, 2015
(unaudited)
Managed and Direct Related Party Investments
|
| | | | | | | | | | | |
| | | | | March 31, 2015 |
| Type | | Balance Sheet Classification | | Amortized Cost | | Fair Value | |
| Investments managed by related parties: | | | | | | | |
| Salus collateralized loan obligations | | Fixed maturities, available-for-sale | | $ | 260 |
| | $ | 260 |
| |
| Fortress Investment Group collateralized loan obligations | | Fixed maturities, available-for-sale | | 203 |
| | 203 |
| |
| Salus participations (b) | | Other invested assets | | 195 |
| | 187 |
| |
| Energy & Infrastructure Capital ("EIC") participations | | Other invested assets | | 9 |
| | 9 |
| |
| | | Total investments managed by related parties | | $ | 667 |
| | $ | 659 |
| |
| | | | | | | | |
| Direct investment in related parties: | | | | | | | |
| HGI energy loan | | Related party loans | | 70 |
| | 72 |
| |
| Salus preferred equity | | Equity securities, available-for-sale | | 12 |
| | 12 |
| |
| Foreign exchange derivatives and embedded derivatives | | Other invested assets | | 13 |
| | 13 |
| |
| Salus promissory note (90 day term) | | Related party loans | | 2 |
| | 2 |
| |
| | | Total direct investment in related parties | | $ | 97 |
| | $ | 99 |
| |
| | | | | | | | |
| Assets above included in FSRCI Funds withheld portfolio: | | | | | | | |
| Fortress Investment Group collateralized loan obligations | | Fixed maturities, available-for-sale | | 23 |
| | 23 |
| |
| HGI energy loan | | Related party loans | | 20 |
| | 20 |
| |
| Salus preferred equity | | Equity securities, available-for-sale | | 12 |
| | 12 |
| |
| Salus collateralized loan obligations | | Fixed maturities, available-for-sale | | 9 |
| | 9 |
| |
| Salus participations | | Other invested assets | | 8 |
| | 8 |
| |
| | | Total assets included in FSRCI Funds withheld portfolio | | $ | 72 |
| | $ | 72 |
| |
| | | | | | | | |
| (a) Year to date annualized earned yield | | | | | | | |
(b) Includes loan participations with 21 different borrowers with an average loan fair value of $9 as of March 31, 2015.
| | | | | |
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement - March 31, 2015
(unaudited)
Summary of Residential Mortgage Backed Securities by Collateral Type and NAIC Designation
|
| | | | | | | | | | | | |
| Collateral Type | | Principal Amount | | Amortized Cost | | Fair Value |
| | | (Dollars in millions) |
| Total by collateral type | | | | | | |
| Government agency | | $ | 116 |
| | $ | 124 |
| | $ | 127 |
|
| Prime | | 338 |
| | 280 |
| | 289 |
|
| Subprime | | 658 |
| | 544 |
| | 565 |
|
| Alt-A | | 1,564 |
| | 1,160 |
| | 1,213 |
|
| | | $ | 2,676 |
| | $ | 2,108 |
| | $ | 2,194 |
|
| Total by NAIC designation | | | | | | |
| 1 | | $ | 2,643 |
| | $ | 2,080 |
| | $ | 2,166 |
|
| 2 | | 29 |
| | 24 |
| | 24 |
|
| 3 | | 4 |
| | 4 |
| | 4 |
|
| | | $ | 2,676 |
| | $ | 2,108 |
| | $ | 2,194 |
|
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement - March 31, 2015
(unaudited)
Top 10 Holdings by Issuers
|
| | | | | | | |
| (Dollars in millions) | | March 31, 2015 |
| Issuer (a): | | Fair Value | | Percentage |
| Wells Fargo & Company | | $ | 176 |
| | 0.9 | % |
| Goldman Sachs Group, Inc. | | 162 |
| | 0.8 | % |
| JP Morgan Chase & Company | | 153 |
| | 0.8 | % |
| General Electric Company | | 138 |
| | 0.7 | % |
| Metropolitan Transportation Authority (NY) | | 137 |
| | 0.7 | % |
| MetLife, Inc. | | 124 |
| | 0.6 | % |
| Bank of America Corporation | | 122 |
| | 0.6 | % |
| Nationwide Mutual Insurance Company | | 98 |
| | 0.5 | % |
| Citigroup, Inc. | | 89 |
| | 0.5 | % |
| Exelon Generation Company, LLC | | 88 |
| | 0.5 | % |
(a) Issuers excluding U.S. Governmental securities and any securities held in our funds withheld portfolio.
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement - March 31, 2015
(unaudited)
Reinsurance Counterparty Risk
|
| | | | | | | | | | |
| | | | | | | | | |
| (Dollars in millions) | | | | Financial Strength Rating |
| Parent Company/Principal Reinsurers | | Reinsurance Recoverable (a) | | AM Best | | S&P | | Moody's |
| Wilton Reinsurance | | $ | 1,514 |
| | A | | Not Rated | | Not Rated |
| Front Street Re | | 1,289 |
| | Not Rated | | Not Rated | | Not Rated |
| Security Life of Denver | | 171 |
| | A | | A | | A2 |
| Scottish Re | | 142 |
| | Not Rated | | Not Rated | | Not Rated |
| London Life | | 109 |
| | A | | Not Rated | | Not Rated |
(a) Reinsurance recoverables do not include unearned ceded premiums that would be recovered in the event of early termination of certain traditional life policies.
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement - March 31, 2015
(unaudited)
Shareholder Information
Corporate Offices:
Fidelity & Guaranty Life
Two Ruan Center
601 Locust Street, 14th Floor
Des Moines, IA 50309
Investor Contact:
Lisa Foxworthy-Parker
Fidelity & Guaranty Life
Lisa.Parker@fglife.com
515-330-3307
Media Contact:
Sard Verbinnen & Co
Jamie Tully or David Millar, 212-687-8080
Common stock and Dividend Information:
New York Stock Exchange symbol: "FGL"
|
| | | | | | | | | | | | | | | | |
| | | High | | Low | | Close | | Dividend Declared |
| FY2015 | | | | | | | | |
| First Quarter | | $ | 26.59 |
| | $ | 20.12 |
| | $ | 24.27 |
| | $ | 0.065 |
|
| Second Quarter | | $ | 24.85 |
| | $ | 20.5 |
| | $ | 21.20 |
| | $ | 0.065 |
|
Transfer Agent
American Stock Transfer & Trust
59 Maiden Lane, Plaza Level
New York, NY 10038
Phone: (800) 937-5449
Fax: (718) 236-2641
http://www.amstock.com
FIDELITY & GUARANTY LIFE AND SUBSIDIARIES
Financial Supplement - March 31, 2015
(unaudited)
Research Analyst Coverage
Thomas Gallagher
Credit Suisse
(212) 538-2010
thomas.gallagher@credit-suisse.com
Eric Berg
RBC Capital Markets
(212) 618-7593
eric.berg@rbccm.com
Jimmy Bhullar
J.P. Morgan
(212) 622-6397
jimmy.s.bhullar@jpmorgancom
Sean Dargan
Macquarie Capital (USA) Inc.
212-231-0663
sean.dargan@macquarie.com
