Fidelity National Financial, Inc. · NYSE:FNF
Fidelity National Financial — Investor Day (November 2022)
98 slides from Fidelity National Financial's investor day presentation, Nov 10, 2022
Slide 1: F&G Analyst Day November 10, 2022
F&G Analyst Day November 10, 2022 Note: Refreshed as of September 30, 2022 and per Amendment to Form 10 filed November 10, 2022
Slide 2: Disclaimer & Forward-Looking Statements
F&G | Analyst Day 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 of terms such as
Slide 3: Non-GAAP Financial Measures
F&G | Analyst Day 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 summarizing transactions
Slide 4: Welcome and Opening Remarks
Welcome and Opening Remarks F&G | Analyst Day 4
Slide 5: Analyst Day Agenda
F&G | Analyst Day 5 Analyst Day Agenda1 1Analyst Day agenda as of September 7, 2022 12:15-12:45 Q&A Session 10:30-10:45 BREAK Page 69 Closing Remarks Page 47 Institutional Scott Cochran President, Institutional & New Markets Page 4 Welcome & Opening Remarks F&G Overview Chris Blunt CEO & President P
Slide 6: Strong Rationale For F&G Partial Spin-off
F&G | Analyst Day 6 Strong Rationale For F&G Partial Spin-off F&G Ownership Before Partial Spin-off After Partial Spin-off F&G FNF ~85% (Majority ownership) FNF 100% ► Purpose of transaction is to create shareholder value and allow investors to invest directly in F&G ► FNF intends to dividend 15% of
Slide 7: I. F&G Strategic Overview
I. F&G Strategic Overview F&G | Analyst Day 7 Chris Blunt President and CEO
Slide 8: Creating A Compelling Investment Case for F&G
F&G | Analyst Day 8 Creating A 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 demand fo
Slide 9: About F&G Snapshot
F&G | Analyst Day 9 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 insurance company ►
Slide 10: How F&G Makes Money – Illustrative
F&G | Analyst Day 10 How F&G Makes Money – Illustrative 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, income & wealth tr
Slide 11: Our History
F&G | Analyst Day 11 Our History 1Reflects financial strength rating for primary operating subsidiaries OUR MISSION We help people turn their aspirations into reality OUR VISION Every day we will strive to improve the financial lives of more and more people, backed by the passion of our team and gro
Slide 12: FNF’s Ownership Has Taken F&G From “Aspirational” to “Realized”
F&G | Analyst Day 12 FNF’s Ownership Has Taken F&G From “Aspirational” to “Realized” F&G Before FNF Merger: FY2019 F&G After FNF Merger: FY2021 FNF acquired F&G on June 1, 2020; we benefited from immediate financial strength ratings upgrades which positioned us to quickly expand in our existing chan
Slide 13: We Have A Clean & Profitable Inforce Book
We Have A Clean & Profitable Inforce Book GAAP Net Reserves1 Annuity Metrics1 13 Weighted average life 6 Years % Surrender protected 90% Average remaining surrender charge (% of account value) 7% % Subject to market value adjustment (MVA) 70% Average cost of options/interest credited 2.1% Distance t
Slide 14: We Are Playing In High Growth Markets
F&G | Analyst Day 14 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 12020 USD in personal savings accounts per Statista (published 2/21/2022) 22018 USD held in CD Accounts <
Slide 15: And We’re Winning
2018 2019 2020 2021 2022F F&G | Analyst Day 15 … And We’re Winning … Funding Agreements Agent PRT Broker Dealer Bank $9.6B $4.5B $3.9B $3.6B +39% CAGR1 Annual Total Gross Sales by Distribution Channel ($B) • FNF and F&G Merger • F&G ratings upgrades (June 2020) 1CAGR reflects 2018-2021 annual period
Slide 16: While Significantly Diversifying Our Business
77% 17% 1% 4% $4.5B 46% 12% 6% 24% 12% $9.6B 39% 27% 4% 17% 13% $8.5B (9 Mos.) 16 … While Significantly Diversifying Our Business Note: Reflects Total Gross Sales FY2021 SalesFY2020 Sales YTD 3Q22 Sales Bank Broker Dealer Agent Funding Agreements Pension Risk Transfer (PRT) C h a n n e l P ro d u c
Slide 17: We Have A Durable Investment Management Edge
Our strategic partnership with Blackstone provides a sustained competitive advantage, opportunities for entering higher margin lines, and potential to disintermediate investment banks in credit origination F&G | Analyst Day 17 We Have A Durable Investment Management Edge Note: Data as of January 1,
Slide 18: We Have A Clear Governance Structure
Our management team has a disciplined approach for considering which lines of business to enter, achieving our targeted new business profitability, and managing our capital and in-force book; we target and pursue opportunities that leverage our strengths ► After the partial spin-off, FNF and F&G wil
Slide 19: We Have A Track Record Of Attracting Top Talent
Our management team has a record of long-term success and has delivered impressive results in the last few years F&G | Analyst Day 19 We Have A Track Record of Attracting Top Talent John Currier President, Retail Markets 30+ years of experience ► Named President, Retail Markets in February 2021; pre
Slide 20: We Are At An Attractive Inflection Point
F&G | Analyst Day 20 We Are At An Attractive Inflection Point Growing Inforce Block >$40B AUM Cash generation to fund common dividend Capital generation to fund F&G’s organic growth Return on capital can be deployed to fund growth and common dividend Sources of capital Capital fuels growth Sales gro
Slide 21: II. Investments
II. Investments F&G | Analyst Day 21 Leena Punjabi SVP, Chief Investment Officer
Slide 22: Investments Key Highlights
F&G | Analyst Day 22 Investments Key Highlights We have a differentiated asset management model ► F&G sets investment strategy & risk limits ► F&G investment committee reviews & approves all strategic investment decisions ► Blackstone is responsible for idea generation and security selection ► Flexi
Slide 23: Our Differentiated Investment Approach
F&G | Analyst Day 23 Our Differentiated Investment Approach F&G Blackstone Strategy & Risk Idea Generation & Security Selection Investment Portfolio Clear & Robust Governance ► F&G’s Chief Investment & Risk Offices set strategic asset allocation and risk limits ► New investment asset classes undergo
Slide 24: Our Liability Profile & Risk Appetite Drives Our Investment Strategy
F&G | Analyst Day 24 Our Liability Profile & Risk Appetite Drives Our Investment Strategy Asset allocation decisions for the investment portfolio begin with a deep understanding of our liability profile, resulting in a well matched asset / liability profile Liabilities Assets ► Short, intermediate &
Slide 25: Our Origination Premiums Enhance Yield; No Added Credit Risk
Our Origination Premiums Enhance Yield; No Added Credit Risk F&G | Analyst Day 25 Structured Private Origination vs. Comparable Duration & Quality Corporates Our direct origination platform systemically provides additional spread, without any additional credit risk, as compared to the broadly syndic
Slide 26: We Benefit From Blackstone’s Capabilities & Relationships
F&G | Analyst Day 26 We Benefit From Blackstone’s Capabilities & Relationships Data as of 3/31/2022, unless noted otherwise 1As of 1/1/2022 2Includes companies in which Blackstone owns >10% or has at least one board seat Credit A Leading Corporate Credit Investment Platform One of the world’s larges
Slide 27: We Have A Fully Developed Asset Class Toolkit
F&G | Analyst Day 27 We Have A Fully Developed Asset Class Toolkit ► 6 asset classes ► Access mostly limited to public markets ► Heavy reliance on credit risk premium for spread ► Lower portfolio credit quality ► 14 asset classes ► Access to both public and private markets ► Diversified exposure to
Slide 28: Our High Quality, Diversified Portfolio Is Well-Positioned
28% Corporates 23% Structured Securities 17% Private Origination 12% Mortgage Loans 6% Alternatives (LP) 4% Pfd/Hybrid 3% Municipal 3% EMD 2% Other 1% Cash 1% Gov't & Treasury $37B Our High Quality, Diversified Portfolio Is Well-Positioned F&G | Analyst Day 28 Portfolio remains conservatively positi
Slide 29: Our Investment Portfolio Key Attributes
51% Residential 23% Multi Family 11% Industrial 8% Office 2% Retail 2% Student Housing 3% Other 44% Corporate Lending 27% Private Specialty Finance 27% Asset Backed & Consumer Loans 2% Triple Net Lease 42% CLO 36% CMBS 11% ABS 10% Non Agency RMBS 1% Agency RMBS Our Investment Portfolio Key Attribute
Slide 30: We Are A Valuation Sensitive And Opportunistic Buyer
We Are A Valuation Sensitive And Opportunistic Buyer F&G was early to allocate to CLOs and reduced exposure as spreads tightened, while peers continued to add exposure to CLOs Note: As of 2/15/2021. Past performance is not necessarily indicative of future results. There is no assurance that any Blac
Slide 31: Stress Testing Scenarios and Methodology
Stress Testing Scenarios and Methodology Investment Portfolio Stress Testing F&G | Analyst Day 31 ► Moderate and Severe Recession scenarios are modeled by F&G and BIS investments and risk teams ► Moderate Recession: Based on characteristics from recessions in 1990/1991 (1st Gulf War), 2001 (dot-com
Slide 32: Stress Test Results by Asset Class
Stress Test Results by Asset Class F&G | Analyst Day 32 Stress Test: Results With No Management Actions ► Impact of default losses and credit drift are mitigated by reduced required capital from lower alternative asset market value and improved covariance benefit ► Mark-to-market (MTM) impact on alt
Slide 33: Stress Test: Management Actions To Mitigate Impact
517 (832) 315 0 Exc Cap 12/31/21 Stress Impact Mgmt Levers Used Exc Cap After Levers Severe Stress Impact on Excess Capital ($M) Capital Position Before & After Stress & Management Actions F&G | Analyst Day 33 Stress Test: Management Actions To Mitigate Impact Base modeling assumed no management act
Slide 34: III. Retail Markets
III. Retail Markets F&G | Analyst Day 34 John Currier President, Retail Markets
Slide 35: Our Successful And Diversified Growth In Retail Markets
We have a competitive product portfolio that meets a wide range of consumer needs ► Our product set is mission driven to help people turn their aspirations into reality ► We provide great service to policyholders as recognized by J.D. Powers, among leading annuity providers F&G | Analyst Day 35 Our
Slide 36: Our Current Product Offerings
F&G | Analyst Day 36 Our Current Product Offerings We choose to offer products that help our clients meet their aspirations, are aligned with our distribution partners, that F&G can manufacture and manage profitably, and have strong growth potential Fixed Indexed Annuity (FIA) Principal protection w
Slide 37: F&G Indexed Annuities – FIA
Summary of FIA Product Features ► Product: Simple deferred annuity product with principal protection ► Loss Protection: Index credit is never less than $0; policyholders are protected from loss ► Liquidity: Guaranteed surrender values and penalty free withdrawals up to specified amount ► Surrender C
Slide 38: F&G Fixed Annuities – MYGA
Summary of MYGA Product Features ► Product: Offers deferred annuities which credit a guaranteed interest rate for 3, 5 or 7 years and a principal guarantee ► Surrender Charges: Matching surrender charge to initial term, with reset upon renewal ► MYGA Advantage over CD: MYGA operates similar to a ban
Slide 39: F&G Indexed Annuities – RILA Launch Planned for 2023
F&G | Analyst Day 39 F&G Indexed Annuities – RILA Launch Planned for 2023 Source: Wink’s Sales & Market Report, 1H22 1CAGR reflects 2017-2021 annual periods 9 11 17 24 38 20 2017 2018 2019 2020 2021 1H22 Industry RILA Sales ($B) ► One of the fastest growing segments of the annuity space, Registered
Slide 40: F&G Indexed Universal Life
F&G | Analyst Day 40 F&G Indexed Universal Life Source: Wink’s Sales & Market Report, 1H22 1CAGR reflects 2017-2021 annual periods 1,970 2,220 2,370 2,160 2,470 1,316 2017 2018 2019 2020 2021 1H22 Industry IUL Sales ($M) 36 28 38 50 87 92 2017 2018 2019 2020 2021 YTD 3Q22 F&G Total Gross Sales – IUL
Slide 41: Our Retail Distribution Partnerships Are Unique and Proven
Our Retail Distribution Partnerships Are Unique and Proven Over 20 years of product development partnership and investment We have moved from significant to top positions within our partners and advisors as we grow together We adapt to how our partners’ businesses are changing F&G | Analyst Day 41 W
Slide 42: Our Retail Distribution Is A Competitive Advantage
F&G | Analyst Day 42 Our Retail Distribution Is A Competitive Advantage 1Source: Wink Annuities Sales Reports for 1H22 Agent IMO: Annuity • FIA market leader, #3 market share1 • $3B+ sales YTD’22; on record pace • Deep, long tenured partners • Proven track record of profitability Agent IMO: Life Bro
Slide 43: We Are A Market Leader Across Our Markets And Channels
Industry Sales Ranking – FIA Industry Sales Ranking – IUL Industry Sales Ranking – MYGA We Are A Market Leader Across Our Markets And Channels F&G | Analyst Day 43 F&G 1H22 Channel Ranking – FIA ► # 3 in IMO Channel ► # 9 in Bank Channel Rank FY2018 1H22 (6 Mos) Company $ B Company $ B 1 Allianz 9.2
Slide 44: We Are Positioned To Win In Large & Growing Retail Markets
F&G | Analyst Day 44 We Are Positioned To Win In Large & Growing Retail Markets ► FIA in IMO was our primary focus ► IUL was steady but ‘niche’ distribution ► A steady but constrained competitor ► Leading positions in FIA, MYGA & IUL ► Strong positions in multiple distribution ► Steady and strong co
Slide 45: IV. Institutional Markets
Scott Cochran President, Institutional & New Markets IV. Institutional Markets F&G | Analyst Day 45
Slide 46: We Have Become A Player In Pension Risk Transfer
3Q21 ~$360M (3 deals)1 Dec ‘20 Selected proven TPA partner F&G | Analyst Day 46 We Have Become A Player In Pension Risk Transfer … Our proven track record of PRT execution … ► $2.3B plan transaction value from inception through 3Q22; transfer of legacy defined benefit pensions to F&G group annuity ►
Slide 47: Pension Risk Transfer Market Landscape
F&G | Analyst Day 47 45,000+ Pension Plans $2.3T Assets $30-40B Annual PRT Market $8-10B F&G Current Target Mkt. ~$2-4B F&G annual sales run rate, based on appetite & market conditions Pension landscape… ► Pension plan liabilities have become increasingly difficult for companies to manage in today’s
Slide 48: We Have Scaled Our Funding Agreement Program
F&G | Analyst Day 48 We Have Scaled Our Funding Agreement Program … Our proven track record of funding agreement execution … ► $2.6B total AUM issuance from inception through 3Q22; 4 FABN issuances completed with laddered maturities ► Have attracted highly sophisticated institutional investors with
Slide 49: Successful Launch In Institutional Markets
F&G | Analyst Day 49 …Which Led To A Successful Launch In Institutional Markets ✓ Grew two businesses to ~$5B AUM in first 6 quarters, providing meaningful profits, channel diversification and scale ✓ Proven track record of execution, including strong investment performance and well regarded operati
Slide 50: V. Financial Update
V. Financial Update Wendy Young EVP, Chief Financial Officer F&G | Analyst Day 50
Slide 51: Finance Highlights
Finance Highlights ► We have a track record of disciplined & profitable growth ► New business growth and stable inforce retention has driven AUM and earnings growth, as well as a stable and strong capital profile ► We have a scalable “return on assets” model that is durable through varying economic
Slide 52: F&G’s Track Record of Disciplined & Profitable Growth
3.6 4.3 6.1 4.8 5.9 3.5 2.6 2.6 3.9 4.5 9.6 7.4 8.5 2019 2020 2021 YTD 3Q21 YTD 3Q22 Institutional Retail 264 247 551 409 207 2019 2020 2021 YTD 3Q21 YTD 3Q22 Significant Income & Expense Items ANE ex Significant Items 25.6 27.3 31.9 30.7 39.2 2019 2020 2021 YTD 3Q21 YTD 3Q22 57% CAGR3 F&G’s Track R
Slide 53: Our Proven Track Record: Sales
F&G | Analyst Day 53 Our Proven Track Record: Sales 1CAGR reflects 2019-2021 annual periods 2Total Net Sales reflects sales attributable to flow reinsurance to third parties 3.6 4.3 6.1 4.8 5.9 0.3 0.2 3.5 2.6 2.6 3.9 4.5 9.6 7.4 8.5 2019 2020 2021 YTD 3Q21 YTD 3Q22 Institutional Retail 57% CAGR1 To
Slide 54: Our Proven Track Record: Disciplined & Profitable Growth
264 247 551 409 207 2019 2020 2021 YTD 3Q21 YTD 3Q22 Significant Income & Expense Items ANE ex Significant Items F&G | Analyst Day 54 Our Proven Track Record: Disciplined & Profitable Growth 1Adjusted net earnings (ANE) and adjusted return on assets (ROA) definition per Amendment to Form 10 filed No
Slide 55: ANE Definition Quarterly Trend
74 128 78 92 101 90 82 128 105 72 133 97 152 160 142 83 112 12 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 ANE Prior Definition ANE New Definition Over the past 9 quarters, under either new or prior definition of ANE, economics over time are consistent despite more short- term volatility under the
Slide 56: Our Proven Track Record: Stable and Strong Capital Profile
F&G | Analyst Day 56 Our Proven Track Record: Stable and Strong Capital Profile Stable and Strong GAAP Capital ProfileSolid F&G capitalization and modest leverage position ► We expect to manage to a 25% adjusted debt-to-capitalization ratio long term target, in line with ratings ► $400M intracompany
Slide 57: Scalable Return on Asset Model – YTD 3Q22 Illustrated
F&G | Analyst Day 57 Scalable Return on Asset Model1 – YTD 3Q22 Illustrated 1Adjusted net earnings (ANE) and adjusted return on assets (ROA) definition per Amendment to Form 10 filed November 10, 2022. See discussion of significant income and expense items in the Appendix 2Adjusted return on assets
Slide 58: We Have Strong Solvency & Capital Profile
1Reflects company action level RBC for primary insurance operating subsidiary 2As of September 30, 2022 Strong Solvency Ratio • Maintain >400% RBC Ratio1 Solid Leverage Position • Debt/Capital Ratio of 10%, excl. AOCI2 • $550M Senior Note with 2025 Maturity ► FNF’s size, scale and financial strength
Slide 59: Our Strong Capitalization Supports Growth & Distributable Cash
F&G | Analyst Day 59 Our Strong Capitalization Supports Growth & Distributable Cash We have reached an inflection point where we expect to start distributing a portion of our adjusted net earnings to our shareholders over time, subject to F&G board of directors’ approval ► F&G’s capital allocation p
Slide 60: Selected GAAP Reporting Items
Selected GAAP Reporting Items F&G | Analyst Day 60
Slide 61: Reconciliation Of GAAP To Adjusted Net Earnings
F&G | Analyst Day 61 Reconciliation Of GAAP To Adjusted Net Earnings1 Nine Months Ended September 30, 2022 ($M) YTD 3Q22 Net earnings (loss) from continuing operations $581 Recognized (gains) and losses, net (19) Indexed product related derivatives (566) Purchase price amortization 16 Transaction co
Slide 62: GAAP Book Value & Accumulated Other Comprehensive Income
GAAP Book Value & Accumulated Other Comprehensive Income F&G | Analyst Day 62 ► As seen across much of the financial services sector, our investment portfolio net unrealized loss was higher as of 9/30/2022 due to higher interest rates and widening credit spreads which, in turn decreased book value b
Slide 63: Equity Rollforward, Excluding AOCI
63 Equity Rollforward, Excluding AOCI1 Equity (ex AOCI) of $4.7B at 9/30/2022 vs. $3.8B at 12/31/2021; $990M or 26% increase, driven by: ► $596M permanent, non-market driven movement including: ► $400M conversion of FNF intercompany loan to equity ► $207M adjusted net earnings (ANE) ► ($11M) other a
Slide 64: Finance Key Takeaways
Finance Key Takeaways ► We have a simple business model ► We have a simple financial model ► We have a scalable “return on assets” model that is durable through varying economic cycles with potential for growth over time ► We have a strong solvency and capital profile and have reached an inflection
Slide 65: VI. Closing Remarks and Q&A
VI. Closing Remarks and Q&A F&G | Analyst Day 65
Slide 66: Creating A Compelling Investment Case for F&G
F&G | Analyst Day 66 Creating A 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 demand f
Slide 67: Appendix
Appendix F&G | Analyst Day 67
Slide 68: Appendix – Investments
*CONFIDENTIAL: Do Not Distribute Outside F&G Appendix – Investments F&G | Analyst Day 68
Slide 69: Structured Credit – Why We Like It
Structured Credit – Why We Like It F&G | Analyst Day 69 CLO Top 10 Industries2 ► Collateralized loan obligation (CLO) portfolio well diversified across industry, issuer and manager; focus on investment grade with ample par subordination ► Commercial mortgage-backed securities (CMBS) focus on seasone
Slide 70: History Demonstrates Lower Relative Risk For CLOs
History Demonstrates Lower Relative Risk For CLOs F&G | Analyst Day 70 ► CLOs have a different risk profile and economic outcomes than holding the underlying loans directly 1Source: Citi Research, US CLOs, July 7, 2022 2Source: Standard & Poor’s, Mid 1990s –March 2022 3Source: CLO impairment – Moody
Slide 71: F&G CLO Portfolio Overview
F&G CLO Portfolio Overview F&G | Analyst Day F&G CLO Portfolio Composition ► Highly diversified portfolio with ample par subordination ► Blackstone’s broad & deep understanding of the asset class, and ability to do loan level underwriting, distinguishes F&G’s portfolio from its peers Note: As of Sep
Slide 72: F&G CLO Overview: Look Through Analysis
F&G | Analyst Day F&G CLO Overview: Look Through Analysis ► Portfolio focused on high quality CLO securities backed by highly diversified pool of loans Source: BXC. As of September 30, 2022 IndustriesCompaniesCLO Managers 72 0.7% 0.5% 0.5% 0.5% 0.5% 0.4% 0.4% 0.4% 0.4% 0.4% 95.1% 0.0% 0.5% 1.0% 100%
Slide 73: U.S. CLO Impairment Frontier
U.S. CLO Impairment Frontier (First-loss scenarios among CLO tranches) U.S. CLO Impairment Frontier F&G | Analyst Day ► CLO debt is well insulated from higher defaults and lower recovery rates ► BBB CLOs can withstand an annualized default of 10% (that would have to occur every year) assuming a 64%
Slide 74: Portfolio Spotlight: Real Estate Debt
F&G | Analyst Day 74 Portfolio Spotlight: Real Estate Debt ► BREDS (Blackstone Real Estate Debt Strategies) has assembled a high-quality portfolio with diversified exposure across asset classes and properties Note: As of September 30, 2022 CMBS 39% RMBS 10% RML 26% CML 24% NNN 1% $8.0B Duration 4.2
Slide 75: CMBS & RMBS Portfolio Overview
By Asset Type By NAIC RatingBy Property Type CMBS & RMBS Portfolio Overview F&G | Analyst Day Note: As of September 30, 2022. Credit metrics aggregated from Bloomberg. 75 46% 20% 9% 12% 6% 7% 0% 20% 40% 60% 80% 100% Q3'22 Industrial / Self Storage Mixed Use / Other Hospitality Retail Office Multifam
Slide 76: CMBS Portfolio Overview
► Prudent asset selection has led to more multifamily exposure and less retail vs. Conduit CMBS market averages Portfolio Construction Comparison CMBS Portfolio Overview F&G | Analyst Day Note: As of September 30, 2022 1BAML Conduit Data as of 9/30/22 Credit Quality 86% Investment grade (NRSRO) Capi
Slide 77: Portfolio Spotlight: Commercial Mortgage Loans
48% Multifamily 23% Industrial 16% Office 5% Retail 4% Student Housing 4% Other $2B F&G | Analyst Day 77 By Underlying Property Type Our CML portfolio is low risk, low leverage and well diversified ► All first mortgage loans, with average loan-to-value of 60% ► 77 holdings, with average loan size of
Slide 78: Portfolio Spotlight: Alternatives
9.5% 5.4% 31.0% 7.3% FY 2019 FY 2020 FY 2021 YTD 2022H1 Annualized Net Returns over the trailing 3 years: 17.1% (as of 12/31/2021) F&G | Analyst Day 78 Portfolio Spotlight: Alternatives ► Commitments to Blackstone and non-Blackstone alternatives total $4.2B ► Funded $1.8B or approximately 6% of port
Slide 79: This document (together with any attachments, appendices, and related materials, the “Materials”) is provided
This document (together with any attachments, appendices, and related materials, the “Materials”) is provided on a confidential basis for informational due diligence purposes only and is not, and may not be relied on in any manner as legal, tax, investment, accounting or other advice or as an offer
Slide 80: Blackstone Related Important Disclosures (continued)
F&G | Analyst Day 80 Blackstone Related Important Disclosures (continued) Diversification; Potential Lack Thereof. Diversification is not a guarantee of either a return or protection against loss in declining markets. The number of investments which a Fund makes may be limited, which would cause the
Slide 81: Index Comparison
Index Comparison. The volatility and risk profile of the indices presented is likely to be materially different from that of a Fund. In addition, the indices employ different investment guidelines and criteria than a Fund and do not employ leverage; as a result, the holdings in a Fund and the liquid
Slide 82: Blackstone Related Important Disclosures (continued)
F&G | Analyst Day 82 Blackstone Related Important Disclosures (continued) Target Allocations. There can be no assurance that a Fund will achieve its objectives or avoid substantial losses. Allocation strategies and targets depend on a variety of factors, including prevailing market conditions, inves
Slide 83: Appendix – Finance
*CONFIDENTIAL: Do Not Distribute Outside F&G Appendix – Finance F&G | Analyst Day 83
Slide 84: GAAP Net Earnings Trend: ANE Adjustment Impacts by Line Item
F&G | Analyst Day 84 GAAP Net Earnings Trend: ANE Adjustment Impacts by Line Item Condensed Consolidated Statement of Earnings Non-GAAP Adjustments Mapping (Dollars in millions) Twelve months ended Nine months ended December 31, 2021 September 30, 2021 September 30, 2022 Recognized (gains) losses, n
Slide 85: Adjusted Net Earnings Trend: Key Non-GAAP Measure
F&G | Analyst Day 85 Adjusted Net Earnings Trend: Key Non-GAAP Measure 1Adjusted net earnings (ANE) definition per Amendment to Form 10 filed November 10, 2022 Adjusted Net Earnings Statement1,2 ► Adjusted Net Earnings reflects a non-GAAP economic measure we use to evaluate financial performance eac
Slide 86: Return on Asset Model Mapping
Nine months ended Nine months ended 9/30/2022 ($M) 9/30/2022 (BPS) Portfolio Earned Yield 1,216 413 Product Fees Offset by Cost of Funds (691) (235) Net Op Expense (202) (69) Interest & Taxes (116) (39) Adjusted Net Earnings 207$ 70 Nine months ended Return on Asset Model ($M) September 30, 2022 Cat
Slide 87: GAAP Product Accounting: $1,000 Sale Illustration
F&G | Analyst Day 87 GAAP Product Accounting: $1,000 Sale Illustration Deposit Accounting Model for Deferred Annuities Premium & Benefit Accounting Model for PRT Net investment income 45 4.5% x $1,000 Account value - beginning of year 0 Deposit – 1/1/2019 1,000 Sales Policy fees (2) Interest credite
Slide 88: Basis of Presentation
F&G | Analyst Day 88 Basis of Presentation ► The following tables set forth our summary historical consolidated financial and operating data. The summary historical consolidated financial and operating data as of September 30, 2022 and for each of the nine months ended September 30, 2022 and 2021 se
Slide 89: Historical Financial Summary – Earnings Data
F&G | Analyst Day 89 Historical Financial Summary – Earnings Data (a) Preferred Stock was retired as part of the FNF Acquisition (b) Adjusted net earnings (ANE) definition per Amendment to Form 10 filed November 10, 2022 (Dollars in millions, except shares, in thousands, and per share data) Summary
Slide 90: Historical Financial Summary – Balance Sheet Data
F&G | Analyst Day 90 Historical Financial Summary – Balance Sheet Data (Dollars in millions, except per share data) Summary Historical Consolidated Financial And Operating Balance Sheet Data (a) Debt-to-capital ratio is computed by dividing total debt by total capitalization (total debt plus total e
Slide 91: Historical Financial Summary – Select Metrics
F&G | Analyst Day 91 Historical Financial Summary – Select Metrics (Dollars in millions) Consolidated Highlights – Select Metrics (a) Adjusted return on assets (ROA) definition per Amendment to Form 10 filed November 10, 2022 Period from June 1 to December 31, 2019 2020 2020 2021 2021 2022 Predecess
Slide 92: Historical Financial Summary – Sales
F&G | Analyst Day 92 Historical Financial Summary – Sales (Dollars in millions) Sales Results By Product Year ended December 31, Year ended December 31, Year ended December 31, 2019 2020 2021 2021 2022 Predecessor Fixed indexed annuities (“FIA”) $2,820 $3,459 $4,310 $3,255 $3,185 Fixed rate annuitie
Slide 93: Non-GAAP Measure Reconciliations
F&G | Analyst Day 93 Non-GAAP Measure Reconciliations (a) Adjusted net earnings (ANE) definition per Amendment to Form 10 filed November 10, 2022 (b) For the year ended December 31, 2021, reflects a one-time favorable adjustment to benefits and other changes in policy reserves and depreciation and a
Slide 94: ANE Results – Significant Income and Expense Items
F&G | Analyst Day 94 ANE Results – Significant Income and Expense Items1 ► Adjusted net earnings of $207 million for the nine months ended September 30, 2022 is comprised of alternative investments net investment income of $66 million. Alternative investments net investment income based on managemen
Slide 95: Non-GAAP Measures and Definitions
F&G | Analyst Day 95 Non-GAAP Measures and Definitions DEFINITIONS The following represents the definitions of non-GAAP measures used by the Company. Adjusted Net Earnings Attributable to Common Shareholders (Adjusted Net Earnings) Adjusted net earnings attributable to common shareholders (“Adjusted
Slide 96: Non-GAAP Measures and Definitions (continued)
F&G | Analyst Day 96 Non-GAAP Measures and Definitions (continued) Adjusted Return on Assets (ROA) Adjusted Return on Assets is calculated by dividing annualized adjusted net earnings by year-to-date AAUM. Management considers this non-GAAP financial measure to be useful internally and to investors
Slide 97: Non-GAAP Measures and Definitions (continued)
F&G | Analyst Day 97 Non-GAAP Measures and Definitions (continued) Average Assets Under Management (AAUM) AAUM is calculated as AUM at the beginning of the period and the end of each month in the period, divided by the total number of months in the period plus one. Management considers this non-GAAP
Slide 98: Non-GAAP Measures and Definitions (continued)
F&G | Analyst Day 98 Non-GAAP Measures and Definitions (continued) Return on Average Equity excluding AOCI Return on average equity excluding AOCI is calculated by dividing net earnings (loss) attributable to common shareholders by total average equity excluding AOCI. Average equity excluding AOCI f
Fidelity National Financial — Investor Day (November 2022) on 6ix