F&g Annuities & Life, Inc. · NYSE:FG
F&g Annuities & Life — Q4 2022 Earnings Presentation
31 slides from F&g Annuities & Life's earnings presentation, Feb 22, 2023
Slide 1: F&G Investor Update Winter 2022
F&G Investor Update Winter 2022 Exhibit 99.3
Slide 2: Disclaimer & Forward-Looking Statements
F&G Investor Update | Winter 2022 2 Disclaimer & Forward-Looking Statements This presentation contains forward-looking statements that are subject to known and unknown risks and uncertainties, many of which are beyond our control. Some of the forward-looking statements can be identified by the use o
Slide 3: Non-GAAP Financial Measures
F&G Investor Update | Winter 2022 3 Non-GAAP Financial Measures Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions, and rules accountants follow in recording and summariz
Slide 4: Fourth Quarter Financial Highlights
F&G Investor Update | Winter 2022 4 Fourth Quarter Financial Highlights 4Q22 Highlights (comparisons to PY) ► Record total gross sales of $2.7B for the fourth quarter, an increase of 23%, driven by expansion in new channels ► Record ending assets under management of nearly $44B at December 31, 2022
Slide 5: About F&G Snapshot
F&G Investor Update | Winter 2022 5 About F&G Snapshot Five Distinct Distribution ChannelsOur Product Lines ► Retail Channels ► Independent insurance agents (IMOs) ► Broker Dealer ► Banks ► Institutional Channels ► Pension risk transfer ► Funding agreements Background ► Founded in 1959 as a life ins
Slide 6: Compelling Investment Case for F&G
F&G Investor Update | Winter 2022 6 Compelling Investment Case for F&G Targeting Large and Growing Markets F&G is a nationwide leader in the large markets we play in, and demographic trends will provide tailwinds to give us significant room to continue growing – including untapped Middle Market dema
Slide 7: How F&G Makes Money – Retained Sales
F&G Investor Update | Winter 2022 7 How F&G Makes Money – Retained Sales Client deposits premium with F&G 1 F&G invests in high quality and well diversified portfolio 2 F&G’s yield outpaces cost of funds and expenses 3 F&G’s AAUM growth drives earnings 4 Spectrum of client needs met (accumulation, i
Slide 8: How F&G Makes Money – Flow Reinsurance
F&G Investor Update | Winter 2022 8 How F&G Makes Money – Flow Reinsurance Client deposits premium with F&G 1 F&G expands flow relationships given high market demand 2 F&G onboards new business at lower marginal cost of capital 3 F&G enhances cash flow, diversifies earnings & increases ROE 4 Spectru
Slide 9: How F&G Makes Money – Owned Distribution
F&G Investor Update | Winter 2022 9 How F&G Makes Money – Owned Distribution F&G takes equity stake in independent agent distribution 1 F&G earns dividend stream on “capital light” distribution 2 F&G generates higher margins at lower marginal cost of capital 3 F&G diversifies earnings through accret
Slide 10: We Have A Clean & Profitable Inforce Book
F&G Investor Update | Winter 2022 We Have A Clean & Profitable Inforce Book GAAP Net Reserves1 Annuity Metrics1 10 Weighted average time remaining in surrender charge period 6 Years % Surrender protected 91% Average remaining surrender charge (% of account value) 7% % Subject to market value adjustm
Slide 11: We Are Playing In High Growth Markets
F&G Investor Update | Winter 2022 11 We Are Playing In High Growth Markets … U.S. Consumer Savings1 Certificates of Deposit2 Retail Life & Annuities3 Pension Risk Transfer4 Funding Agreements6 $140B $210B $354B 12021 personal savings in the U.S. per Statista Research Department, May 10, 2022 22018 U
Slide 12: And We're Winning: Gross Sales by Distribution Channel
2018 2019 2020 2021 2022 F&G Investor Update | Winter 2022 12 Funding Agreements Agent PRT Broker Dealer Bank $9.6B $4.5B $3.9B $3.4B +35% CAGR1 Annual Total Gross Sales by Distribution Channel ($B) • FNF and F&G Merger • F&G ratings upgrades (June 2020) 1CAGR reflects 2018-2022 annual periods … And
Slide 13: While Significantly Diversifying Our Business
77% 17% 1% 5% $4.5B 46% 12% 6% 24% 12% $9.6B 43% 28% 4% 13% 12% $11.3B 13 … While Significantly Diversifying Our Business Note: Reflects Total Gross Sales FY2021 SalesFY2020 Sales FY2022 Sales Bank Broker Dealer Agent Funding Agreements Pension Risk Transfer (PRT) C h a n n e l P ro d u c t 45% 18%1
Slide 14: Our High Quality, Diversified Portfolio Is Well-Positioned
Our High Quality, Diversified Portfolio Is Well-Positioned F&G Investor Update | Winter 2022 14 Portfolio remains conservatively positioned & well-matched to liability profile ► Fixed income portfolio is 95% investment grade ► Asset / liability duration well-balanced ► Floating rate exposure offers
Slide 15: Our Investment Portfolio Key Attributes
Our Investment Portfolio Key Attributes F&G Investor Update | Winter 2022 15 Structured Credit Portfolio1,2 ► Core fixed income: Focus remains high grade public and private securities with strong risk adjusted returns ► Structured credit: Provides access to well diversified, high quality assets acro
Slide 16: F&G's Track Record of Disciplined & Profitable Growth
247 551 345 142 138 2020 2021 2022 4Q21 4Q22 Significant Income & Expense Items ANE ex Significant Items 27.3 31.9 40.1 35.7 42.6 2020 2021 2022 4Q21 4Q22 F&G Investor Update | Winter 2022 16 F&G’s Track Record of Disciplined & Profitable Growth Total Gross Sales ($B) Average Assets Under Management
Slide 17: Our Proven Track Record: Sales
4.3 6.1 8.5 1.4 2.5 0.2 3.5 2.8 0.8 0.2 4.5 9.6 11.3 2.2 2.7 2020 2021 2022 4Q21 4Q22 Institutional Retail F&G Investor Update | Winter 2022 17 Our Proven Track Record: Sales 1CAGR reflects 2020-2022 annual periods Gross Sales Growth ($B) Gross sales reflect diversified growth strategy; sales volume
Slide 18: Our Proven Track Record: Adjusted Net Earnings
247 551 345 142 138 2020 2021 2022 4Q21 4Q22 Significant Income & Expense Items ANE ex Significant Items F&G Investor Update | Winter 2022 18 Our Proven Track Record: Adjusted Net Earnings 1Excluding discontinued operations Adjusted Net Earnings (ANE) ($M) Net Income1 (39) 857 481 121 (100) AUM 28.6
Slide 19: Scalable Return on Asset Model – FY2022 Illustrated
F&G Investor Update | Winter 2022 19 Scalable Return on Asset Model – FY2022 Illustrated 1See discussion of significant income and expense items in the Appendix 2Adjusted return on assets (ROA) in bps as reported, including short-term mark-to-market effects. 3Overall Product margin = portfolio earne
Slide 20: Our Proven Track Record: Stable and Strong Capital Profile
F&G Investor Update | Winter 2022 20 Our Proven Track Record: Stable and Strong Capital Profile Stable and Strong GAAP Capital ProfileSolid F&G capitalization; executing on plan ► 4Q22 capital markets highlights, as planned: ► $550M drawn on new third party senior unsecured revolving credit facility
Slide 21: Our Strong Capitalization Supports Growth & Distributable Cash
F&G Investor Update | Winter 2022 21 Our Strong Capitalization Supports Growth & Distributable Cash We have reached an inflection point to start distributing a portion of our adjusted net earnings to our shareholders over time; F&G’s board of directors has approved an initial common dividend program
Slide 22: Appendix
Appendix F&G Investor Update | Winter 2022 22
Slide 23: Book Value Per Share Rollforward
$35.72 $38.18 $35.20 $36.66 2.74 (0.28) (2.78) 1.46 2021 ANE Other 2022 Before Capital & MTM Net Debt Conversion Common Dividend 2022 Before MTM MTM Movements 2022 ► Underlying business fundamentals deliver solid BVPS growth of 7%, before capital actions & mark-to- market movement ► Capital actions
Slide 24: Reconciliation Of GAAP To Adjusted Net Earnings
F&G Investor Update | Winter 2022 24 Reconciliation Of GAAP To Adjusted Net Earnings Period Ended December 31, 2022 ($M) 4Q22 FY2022 Net earnings (loss) from continuing operations ($100) $481 Recognized (gains) and losses, net 136 117 Indexed product related derivatives 212 (354) Purchase price amor
Slide 25: Reconciliation of GAAP to Adjusted Net Earnings by Period
Period from January 1 to May 31, Period from June 1 to December 31, Year ended December 31, Year ended December 31, Three months ended December 31, 2020 2020 2021 2022 2021 2022 Predecessor Net earnings (loss) from continuing operations ($200) $161 $857 $481 $121 ($100) Less preferred stock dividend
Slide 26: ANE Results – Significant Income and Expense Items
F&G Investor Update | Winter 2022 26 ANE Results – Significant Income and Expense Items1 ► Adjusted net earnings of $138 million for the three months ended December 31, 2022 included a $34 million recognized gain from alternative investments, a $58 million one-time tax benefit from carryback of capi
Slide 27: Non-GAAP Measures and Definitions
F&G Investor Update | Winter 2022 27 Non-GAAP Measures and Definitions DEFINITIONS The following represents the definitions of non-GAAP measures used by the Company. Adjusted Net Earnings Adjusted net earnings is a non-GAAP economic measure we use to evaluate financial performance each period. Adjus
Slide 28: Non-GAAP Measures and Definitions (continued)
F&G Investor Update | Winter 2022 28 Non-GAAP Measures and Definitions (continued) Adjusted Net Earnings per Common Share Adjusted net earnings per common share is calculated as adjusted net earnings divided by the weighted-average common shares outstanding. Management considers this non-GAAP financ
Slide 29: Non-GAAP Measures and Definitions (continued)
F&G Investor Update | Winter 2022 29 Non-GAAP Measures and Definitions (continued) Assets Under Management (AUM) AUM uses the following components: i. total invested assets at amortized cost, excluding derivatives, net of reinsurance qualifying for risk transfer in accordance with GAAP; ii. related
Slide 30: Non-GAAP Measures and Definitions (continued)
F&G Investor Update | Winter 2022 30 Non-GAAP Measures and Definitions (continued) Return on Average Equity Return on average equity is calculated by dividing the rolling four quarters net earnings (loss), by total average equity. Average equity for the twelve months rolling period, is the simple av
Slide 31: Non-GAAP Measures and Definitions (continued)
F&G Investor Update | Winter 2022 31 Non-GAAP Measures and Definitions (continued) Total Debt-to-Capitalization excluding AOCI Debt-to-capital ratio excluding AOCI is computed by dividing total aggregate principal amount of debt by total capitalization (total debt plus total equity excluding AOCI).