DES MOINES, Iowa, Aug. 5, 2026 /PRNewswire/ -- F&G Annuities & Life, Inc. $(FG)$ (F&G or the Company) a leading provider of insurance solutions serving retail annuity and life customers and institutional clients, today reported financial results for the second quarter ended June 30, 2026.
Net loss attributable to common shareholders for the second quarter of $81 million, or $0.62 per diluted share (per share), compared to net earnings of $35 million, or $0.26 per share, for the second quarter of 2025. Net loss for the second quarter included $144 million of net unfavorable mark-to-market effects and $22 million of other unfavorable items; all of which are excluded from adjusted net earnings. Net earnings for the second quarter of 2025 included $49 million of net unfavorable mark-to-market effects and $19 million of other unfavorable items; all of which are excluded from adjusted net earnings.
Adjusted net earnings attributable to common shareholders (adjusted net earnings) for the second quarter were $85 million, or $0.65 per share, compared with $103 million, or $0.77 per share, for the second quarter of 2025. Adjusted net earnings include significant income and expense items, as well as investment income from alternative investments below management's long-term expected return. Please see the "Second Quarter 2026 Results" and "Non-GAAP Measures and Other Information" sections for further explanation.
Company Highlights
-- Achieved record assets under management before reinsurance of nearly $75
billion: F&G achieved assets under management before reinsurance of $74.7
billion as of June 30, 2026, an increase of 8% over the second quarter of
2025. This included retained AUM of $55.9 billion. F&G's gross sales
were $2.7 billion and net sales were $1.5 billion for the second quarter
-- Excellent credit performance in our high quality asset portfolio: The
retained investment portfolio is performing well, with 97% of fixed
maturities being investment grade. It is well matched to our liability
profile and diversified across asset types. Credit-related impairments
have remained low and stable, averaging 6 basis points over the past five
years, and continuing below pricing assumptions through the first half of
2026
-- Reported adjusted return on equity $(ROE)$ ex AOCI and adjusted return on
assets (ROA) include short-term fluctuations in investment income from
alternative investments: Adjusted ROE excluding AOCI was 8.0% and
adjusted ROA was 68 basis points for the second quarter; adjusted ROA of
85 basis points over the last twelve months $(LTM)$ was in line with full
year 2025
-- Solid balance sheet supports both organic growth and higher return of
capital to shareholders: During the second quarter, F&G returned $128
million of capital to shareholders through $37 million of common and
preferred dividends and $91 million of share repurchases. This brought
the first half of 2026 capital returned to shareholders to approximately
$195 million, through $75 million of dividends and $120 million of share
repurchases
Conor Murphy, F&G's Chief Executive Officer and President, commented, "The second quarter reflects the strength and resilience of the business we have built at F&G. We achieved record assets under management before reinsurance of $74.7 billion underpinned by continued momentum in core retail, while maintaining our disciplined approach to sales, pricing and capital allocation. Our investment portfolio continues to perform well, with strong credit performance and impairments remaining below pricing assumptions, reinforcing the consistent earnings power of our business. Combined with our diversified distribution platform and strategic reinsurance relationships, we believe F&G is well positioned to navigate a dynamic market environment."
Mr. Murphy continued, "Having spent the past year working closely with our employees, distribution partners and leadership team, my confidence in the future of F&G has only grown stronger. We see meaningful opportunities to further scale our fee-based, higher margin and less capital intensive earnings streams while continuing to grow our core spread-based franchise. Supported by strong inforce earnings generation, substantial financial flexibility and favorable demographic trends, we are confident in our ability to grow assets under management, expand returns and create long-term shareholder value."
Summary Financial Results (1)
(In millions,
except per
share data) Three months ended Six months ended
----------------------------- --------------------------------
June 30, 2026 June 30, 2025 2026 2025
------------- -------------- --------------- ---------------
AUM before
reinsurance $ 74,687 $ 69,161 $ 74,687 $ 69,161
Assets under
management
(AUM) $ 55,868 $ 55,565 $ 55,868 $ 55,565
Gross sales $ 2,719 $ 4,106 $ 5,892 $ 7,008
Net sales $ 1,464 $ 2,744 $ 3,709 $ 4,925
Net earnings
(loss) $ (81) $ 35 $ 163 $ 10
Net earnings
(loss) per
share $ (0.62) $ 0.26 $ 1.24 $ 0.08
Adjusted net
earnings $ 85 $ 103 $ 195 $ 194
Adjusted net
earnings per
share $ 0.65 $ 0.77 $ 1.49 $ 1.48
Adjusted
return on
average
equity (ex.
AOCI) 8.0 % 8.8 % 8.0 % 8.8 %
Adjusted
return on
assets 0.68 % 0.71 % 0.68 % 0.71 %
Book value per
common share $ 33.27 $ 31.02 $ 33.27 $ 31.02
Book value per
common share,
excluding
AOCI $ 45.93 $ 43.39 $ 45.93 $ 43.39
Second Quarter 2026 Results
Record AUM before reinsurance was $74.7 billion as of June 30, 2026, an increase of 8% over $69.2 billion at the end of the second quarter of 2025. This included AUM of $55.9 billion as of June 30, 2026, an increase of 1% over $55.6 billion at the end of the second quarter of 2025; retained AUM reflects net asset flows offset by $1.8 billion inforce block ceded with the F&G Life Re (Bermuda) sale effective March 1, 2026 and a $750 million funding agreement-backed note maturity in the second quarter of 2026. A rollforward of AUM can be found in the "Non-GAAP Measures and Other Information" section of this release.
Gross sales were $2.7 billion for the second quarter, compared with $4.1 billion for the second quarter of 2025 which included near record opportunistic sales; reflects our commitment to manage growth for the long-term.
Core sales were $2.0 billion for the second quarter, compared with $2.2 billion for the second quarter of 2025; reflects strong momentum with $1.8 billion of core retail (indexed annuities and indexed universal life) sales, one of our strongest quarters on record, and $0.2 billion of pension risk transfer sales.
(1) See definition of non-GAAP measures below
Opportunistic sales were $0.7 billion for the second quarter, compared with $1.9 billion for the second quarter of 2025; reflects $1.8 billion decrease in multiyear guaranteed annuities as we prioritize pricing discipline and capital allocation to the highest return opportunities, partially offset by $0.6 billion of higher funding agreements. Opportunistic volumes vary quarter to quarter depending on economics and market opportunity.
Net sales were $1.5 billion for the second quarter, compared with $2.7 billion for the second quarter of 2025; reflects flow reinsurance in line with capital targets for fixed indexed annuities and multiyear guaranteed annuities.
Adjusted net earnings were $85 million, or $0.65 per share, for the second quarter, compared with $103 million, or $0.77 per share, for the second quarter of 2025. Adjusted net earnings include alternative investment portfolio short-term returns that differ from long-term return expectations.
-- Adjusted net earnings were $85 million, or $0.65 per share, for the
second quarter of 2026. Investment income from alternative investments
was $49 million, or $0.38 per share, below management's current long-term
expected return of approximately 12%
-- Adjusted net earnings were $103 million, or $0.77 per share, for the
second quarter of 2025. Investment income from alternative investments
was $67 million, or $0.50 per share, below management's long-term
expected return
-- As compared with the prior year quarter and excluding the above items,
adjusted net earnings reflect consistent core spread as the business
maintained disciplined pricing. Total product margin was reduced after
reflecting the F&G Life Re (Bermuda) sale, as well as lower surrender
charge fee income and higher other liability costs, as expected. These
items were partially offset by asset growth, steady fees from accretive
flow reinsurance and owned distribution margin, and disciplined expense
management which continued to drive scale benefit
Capital and Liquidity Highlights
Total F&G equity attributable to common shareholders, excluding AOCI, was $6.0 billion, or $45.93 per share, as of June 30, 2026. This reflects an increase of $1.50 per share as compared with December 31, 2025.
1H26
------
Book value per common share excluding AOCI - As of December 31, 2025 $44.43
Effect of F&G Life Re (Bermuda) sale (one-time item) 0.10
Subtotal, after one-time items $44.53
Adjusted net earnings and other 1.05
Subtotal, before capital actions & mark-to-market $45.58
Capital actions 0.27
Subtotal, before mark-to-market $45.85
Mark-to-market movement 0.08
Book value per common share excluding AOCI - As of June 30, 2026 $45.93
During the second quarter, F&G returned $128 million of capital to shareholders through $37 million of common and preferred dividends and $91 million to repurchase approximately 3.3 million shares of common stock at an average price of $27.27. This brought the first half of 2026 capital returned to shareholders to approximately $195 million, through $75 million of dividends and $120 million to repurchase approximately 4.5 million shares of common stock at an average price of $26.44.
Earnings Conference Call
Members of F&G's senior management team will host a conference call with the investment community to discuss F&G's second quarter 2026 results on Thursday, August 6, 2026, beginning at 9:00 a.m. Eastern Time. The conference call will be broadcast live over F&G's Investor Relations website at investors.fglife.com. A replay will also be available at the same location.
About F&G
F&G is committed to helping Americans turn their aspirations into reality. F&G is a leading provider of insurance solutions serving retail annuity and life customers and institutional clients and is headquartered in Des Moines, Iowa. For more information, please visit fglife.com.
Use of Non-GAAP Financial Information
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 and in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, this presentation includes non-GAAP financial measures, which the Company believes are useful to help investors better understand its financial performance, competitive position and prospects for the future. Management believes these non-GAAP financial measures may be useful in certain instances to provide additional meaningful comparisons between current results and results in prior operating periods. Our non-GAAP financial 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. The presentation of this financial information is not intended to be considered in isolation of or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. By disclosing these non-GAAP financial measures, the Company believes it offers investors a greater understanding of, and an enhanced level of transparency into, the means by which the Company's management operates the Company. Any non-GAAP measures should be considered in context with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP net earnings, net earnings attributable to common shareholders, or any other measures derived in accordance with GAAP as measures of operating performance or liquidity. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are provided within.
Forward-Looking Statements and Risk Factors
This press release 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 "believes", "expects", "may", "will", "could", "seeks", "intends", "plans", "estimates", "anticipates" or other comparable terms. Statements that are not historical facts, including statements regarding our expectations, hopes, intentions or strategies regarding the future are forward-looking statements. Forward-looking statements are based on management's beliefs, as well as assumptions made by, and information currently available to, management. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to: general economic conditions and other factors, including prevailing interest and unemployment rate levels and stock and credit market performance; consumer spending; government spending; the volatility and strength of the capital markets; investor and consumer confidence; foreign currency exchange rates; commodity prices; inflation levels; changes in trade policy; tariffs and trade sanctions on goods; trade wars; supply chain disruptions; natural disasters, public health crises, international tensions and conflicts, geopolitical events, terrorist acts, labor strikes, political crisis, accidents and other events; concentration in certain states for distribution of our products; the impact of interest rate fluctuations; equity market volatility or disruption; the impact of credit risk of our counterparties; changes in our assumptions and estimates regarding amortization of our deferred acquisition costs, deferred sales inducements and value of business acquired balances; regulatory changes or actions, including those relating to regulation of financial services affecting (among other things) underwriting of insurance products and regulation of the sale, underwriting and pricing of products and minimum capitalization and statutory reserve requirements for insurance companies, or the ability of our insurance subsidiaries to make cash distributions to us; and other factors discussed in "Risk Factors" and other sections of F&G's Form 10-K and other filings with the Securities and Exchange Commission (SEC).
CONTACT:
Lisa Foxworthy-Parker
SVP of Investor & External Relations
Investor.relations@fglife.com
515.330.3307
F&G ANNUITIES & LIFE, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except per share data)
(Unaudited)
Assets June 30, 2026 December 31, 2025
--------------------- ---------------------
Investments
Fixed maturity securities
available for sale, at
fair value, net of
allowance $ 52,228 $ 52,700
Fixed maturity securities,
at fair value under fair
value option 94 --
Equity securities, at fair
value 293 341
Derivative investments 1,305 1,148
Mortgage loans, net of
allowance 9,265 7,891
Investments in
unconsolidated affiliates 5,065 4,878
Other long-term investments 1,315 1,294
Policy loans 171 147
Short-term investments 545 1,043
--------------------- ---------------------
Total investments $ 70,281 $ 69,442
--------------------- ---------------------
Cash and cash equivalents 2,103 1,486
Reinsurance recoverable, net
of allowance 20,876 17,545
Goodwill 2,124 2,180
Prepaid expenses and other
assets 1,142 1,052
Other intangible assets, net 6,536 6,275
Market risk benefits asset 364 285
Income taxes receivable 81 83
Deferred tax asset, net 85 82
--------------------- ---------------------
Total assets $ 103,592 $ 98,430
===================== =====================
Liabilities and Equity
Contractholder funds $ 64,398 $ 62,726
Future policy benefits 10,856 10,755
Market risk benefits
liability 1,102 903
Accounts payable and accrued
liabilities 2,846 2,701
Notes payable 2,239 2,237
Funds withheld for
reinsurance liabilities 17,457 14,191
--------------------- ---------------------
Total liabilities $ 98,898 $ 93,513
--------------------- ---------------------
Equity
Preferred stock, at par
value -- --
Common stock, at par value -- --
Additional paid-in-capital 3,765 3,764
Retained earnings 2,665 2,568
Accumulated other
comprehensive income
(loss) ("AOCI") (1,658) (1,488)
Treasury stock (163) (40)
--------------------- ---------------------
Total F&G Annuities & Life,
Inc. shareholders' equity $ 4,609 $ 4,804
Non-controlling interests 85 113
--------------------- ---------------------
Total equity $ 4,694 $ 4,917
--------------------- ---------------------
Total liabilities and
equity $ 103,592 $ 98,430
===================== =====================
F&G ANNUITIES & LIFE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
SECOND QUARTER INFORMATION
(In millions, except per share data)
(Unaudited)
Three months ended Six months ended
June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
---------------- --------------- --------------- ---------------
Revenues
Life insurance
premiums and
other fees $ 394 $ 608 $ 873 $ 1,097
Interest and
investment
income 718 682 1,441 1,348
Owned
distribution
revenues 19 23 36 39
Recognized gains
and (losses),
net 290 51 258 (212)
---------------- --------------- --------------- ---------------
Total
revenues 1,421 1,364 2,608 2,272
Benefits and
expenses
Benefits and
other changes in
policy reserves 1,149 993 1,633 1,517
Market risk
benefit losses
(gains) 32 (4) 105 105
Depreciation and
amortization 175 158 348 311
Personnel costs 77 77 137 144
Other operating
expenses 41 42 74 83
Interest expense 41 41 82 81
---------------- --------------- --------------- ---------------
Total
benefits and
expenses 1,515 1,307 2,379 2,241
Earnings (loss)
before income
taxes (94) 57 229 31
Income tax
expense
(benefit) (19) 15 55 10
---------------- --------------- --------------- ---------------
Net earnings
(loss) (75) 42 174 21
Less:
Non-controlling
interests 1 2 2 2
---------------- --------------- --------------- ---------------
Net earnings
(loss)
attributable to
F&G (76) 40 172 19
Less: Preferred
stock dividend 5 5 9 9
---------------- --------------- --------------- ---------------
Net earnings
(loss)
attributable to
F&G common
shareholders $ (81) $ 35 $ 163 $ 10
================ =============== =============== ===============
Net earnings
(loss)
attributable to
F&G common
shareholders per
common share
Basic $ (0.62) $ 0.26 $ 1.24 $ 0.08
Diluted $ (0.62) $ 0.26 $ 1.24 $ 0.08
Weighted average
common shares
used in computing
net earnings
(loss) per common
share
Basic 130 133 131 130
Diluted 130 134 131 131
Non-GAAP Measures and Other Information
RECONCILIATION OF NET EARNINGS (LOSS) TO ADJUSTED NET EARNINGS
Three months ended Six months ended
---------------------------------
June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
---------------- ---------------- --------------- ----------------
Net earnings (loss)
attributable to F&G
common shareholders $ (81) $ 35 $ 163 $ 10
Non-GAAP adjustments
Recognized (gains)
and losses, net
Net realized and
unrealized (gains)
losses on fixed
maturity
available-for-sale
securities, equity
securities and
other invested
assets 137 12 171 27
Change in allowance
for expected credit
losses (8) 19 (9) 41
Change in fair value
of reinsurance
related embedded
derivatives 30 61 (189) 102
Change in fair value
of other
derivatives and
embedded
derivatives 31 (13) 54 (62)
---------------- ---------------- --------------- ----------------
Recognized
(gains) losses,
net 190 79 27 108
Market related
liability
adjustments (10) (16) (47) 87
Purchase price
amortization 15 18 30 33
Transaction costs,
other and
non-recurring items 14 8 19 9
Non-controlling
interest (2) (2) (4) (4)
Income taxes
adjustment $ (41) $ (19) $ 7 $ (49)
---------------- ---------------- --------------- ----------------
Adjusted net earnings
attributable to
common shareholders
(1) $ 85 $ 103 $ 195 $ 194
(1) See definition of non-GAAP measures below
-- Adjusted net earnings were $85 million, or $0.65 per share, for the
second quarter of 2026. Investment income from alternative investments
was $49 million, or $0.38 per share, below management's current long-term
expected return of approximately 12%
-- Adjusted net earnings were $103 million, or $0.77 per share, for the
second quarter of 2025. Investment income from alternative investments
was $67 million, or $0.50 per share, below management's long-term
expected return
-- Adjusted net earnings of $195 million, or $1.49 per share, for the first
six months ended June 30, 2026 included $5 million, or $0.04 per share,
from investment and other income true-up adjustments. Investment income
from alternative investments was $93 million, or $0.71 per share, below
management's long-term expected return
-- Adjusted net earnings of $194 million, or $1.48 per share, for the first
six months ended June 30, 2025 included $16 million, or $0.12 per share,
of income from a reinsurance true-up adjustment. Investment income from
alternative investments was $112 million, or $0.86 per share, below
management's long-term expected return
RECONCILIATION OF TOTAL EQUITY, TOTAL EQUITY EXCLUDING ACCUMULATED OTHER COMPREHENSIVE
INCOME (AOCI), BOOK VALUE PER SHARE AND BOOK VALUE PER SHARE EXCLUDING AOCI
Three months ended
----------------------------------------------------------------------
December 31, September 30,
(In millions) June 30, 2026 March 31, 2026 2025 2025
---------------- ---------------- ---------------- ----------------
Total F&G
Annuities &
Life, Inc.
shareholders'
equity 4,609 4,639 4,804 4,824
Less: Preferred
stock 250 250 250 250
---------------- ---------------- ---------------- ----------------
Total F&G
equity
attributable
to common
shareholders 4,359 4,389 4,554 4,574
Less: AOCI (1,658) (1,843) (1,488) (1,376)
---------------- ---------------- ---------------- ----------------
Total F&G
equity
attributable
to common
shareholders,
excluding
AOCI $ 6,017 $ 6,232 $ 6,042 $ 5,950
================ ================ ================ ================
Common shares
outstanding 131 134 136 135
Book value per
common share $ 33.27 $ 32.75 $ 33.49 $ 33.88
Book value per
common share,
excluding
AOCI $ 45.93 $ 46.51 $ 44.43 $ 44.07
ASSETS UNDER MANAGEMENT (AUM) ROLLFORWARD, AVERAGE ASSETS UNDER MANAGEMENT $(AAUM)$ AND AUM
BEFORE REINSURANCE
Three months ended
----------------------------------------------------------------------
December 31, September 30,
(In millions) June 30, 2026 March 31, 2026 2025 2025
---------------- ---------------- ---------------- ----------------
AUM at beginning
of period $ 56,436 $ 57,574 $ 56,647 $ 55,565
Net new business
asset flows 233 1,364 1,660 2,269
Net flow
reinsurance to
third parties (801) (688) (733) (1,187)
Net inforce
reinsurance to
third parties -- (1,814) -- --
Net capital
transaction
proceeds
(disbursements) -- -- -- --
---------------- ---------------- ---------------- ----------------
AUM at end of
period(1) $ 55,868 $ 56,436 $ 57,574 $ 56,647
AAUM YTD(1) $ 56,939 $ 57,905 $ 55,384 $ 54,870
AUM before
reinsurance $ 74,687 $ 74,454 $ 73,090 $ 71,430
SALES HIGHLIGHTS
Three months ended Six months ended
-------------------------------------------------- ------------------------------------------------
(In millions) June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
------------------------ ------------------------ ------------------------ ----------------------
Indexed
annuities
("FIA/RILA") $ 1,744 $ 1,701 $ 3,323 $ 3,162
Indexed
universal life
("IUL") 42 53 86 96
Pension risk
transfer
("PRT") 232 445 549 756
------------------------ ------------------------ ------------------------ ----------------------
Subtotal: Core
sales 2,018 2,199 3,958 4,014
Fixed rate
annuities
("MYGA") 101 1,907 284 2,469
Funding
agreements
("FABN/FHLB") 600 -- 1,650 525
------------------------ ------------------------ ------------------------ ----------------------
Subtotal:
Opportunistic
sales(2) 701 1,907 1,934 2,994
------------------------ ------------------------ ------------------------ ----------------------
Gross sales 2,719 4,106 5,892 7,008
Sales
attributable to
flow
reinsurance to
third
parties(3) (1,255) (1,362) (2,183) (2,083)
------------------------ ------------------------ ------------------------ ----------------------
Net sales 1,464 2,744 3,709 4,925
======================== ======================== ======================== ======================
(1) See definition of non-GAAP measures below
(2) Opportunistic sales volumes fluctuate quarter to quarter depending on
economics and market opportunity
(3) Sales attributable to flow reinsurance to third parties includes the
reinsurance sidecar
DEFINITIONS
The following represents the definitions of non-GAAP measures used by F&G:
Adjusted Net Earnings Attributable to Common Shareholders
Adjusted net earnings attributable to common shareholders (ANE) is a non-GAAP
economic measure used to evaluate financial performance each period.
ANE eliminates the impact of specific items that are not indicative of the
underlying economics of our business, including certain market volatility,
asymmetrical and noneconomic accounting, nonrecurring items and other income
and expense adjustments. These items are volatile in our reported GAAP
earnings and are not indicative of the underlying profitability drivers
reflected in the design and pricing of our products and/or our investment
and hedging strategy, as such items fluctuate from period to period in a
manner inconsistent with these drivers.
ANE provides information to enhance an investor's understanding of our
results and underlying profitability drivers by removing the impact of
short-term market volatility (i.e. recognized gains and losses, market risk
benefits remeasurement gains and losses, derivative gains and losses),
asymmetrical and non-economic accounting (i.e. derivatives and investment
hedges that do not qualify for hedge accounting, deferred pension risk
transfer deferred profit liability losses), and other adjustments.
ANE is calculated by adjusting net earnings or loss attributable to common
shareholders to eliminate:
(i) Recognized gains and losses, net: the impact of net investment
gains/losses, including changes in allowance for expected credit losses and
other than temporary impairment ("OTTI") losses, recognized in operations; and
the effects of changes in fair value of the reinsurance related embedded
derivative and other derivatives, including interest rate swaps and forwards;
(ii) Market related liability adjustments: the impacts related to changes in
the fair value, including both realized and unrealized gains and losses, of
index product related derivatives and embedded derivatives, net of hedging
cost; the impact of initial pension risk transfer deferred profit liability
losses, including amortization from previously deferred pension risk transfer
deferred profit liability losses; and the changes in the fair value of market
risk benefits by deferring current period changes and amortizing that amount
over the life of the market risk benefit;
(iii) Purchase price amortization: the impacts related to the amortization of
certain intangibles (internally developed software, trademarks and value of
distribution asset and the change in fair value of liabilities recognized as a
result of acquisition activities);
(iv) Transaction costs: the impacts related to acquisition, integration and
merger related items;
(v) Other and "non-recurring," "infrequent" or "unusual items": Other
adjustments include removing any charges associated with U.S. guaranty fund
assessments as these charges neither relate to the ordinary course of the
Company's business nor reflect the Company's underlying business performance,
but result from external situations not controlled by the Company. Further,
Management excludes certain items determined to be "non-recurring,"
"infrequent" or "unusual" from adjusted net earnings when incurred if it is
determined these items are not a reflection of the core business and when the
nature of the item is such that it is not reasonably likely to recur within
two years and/or there was not a similar item in the preceding two years;
(vi) Non-controlling interest on non-GAAP adjustments: the portion of the
non-GAAP adjustments attributable to the equity interest of entities that F&G
does not wholly own; and
(vii) Income taxes: the income tax impact related to the above-mentioned
adjustments is measured using an effective tax rate, as appropriate by tax
jurisdiction.
Recognized gains and losses are excluded from ANE as part of both
adjustments (i) and (ii). As part of those two adjustments to ANE, all
material recognized gains and losses are removed except for periodic
settlements of interest rate swaps used to economically hedge our floating
rate investments.
While these adjustments are an integral part of the overall performance of
F&G, market conditions and/or the non-operating nature of these items can
overshadow the underlying performance of the core business. Accordingly,
management considers this to be a useful measure internally and to investors
and analysts in analyzing the trends of our operations. Adjusted net earnings
should not be used as a substitute for net earnings (loss). However, we
believe the adjustments made to net earnings (loss) in order to derive
adjusted net earnings provide an understanding of our overall results of
operations.
Adjusted Weighted Average Diluted Shares Outstanding
Adjusted weighted average diluted shares outstanding is the same as weighted
average diluted shares outstanding except for periods in which our preferred
stocks are calculated to be dilutive to either net earnings attributable to
common shareholders or adjusted net earnings attributable to common
shareholders, but not both, or there is a net earnings loss attributable to
common shareholders on a GAAP basis, but positive adjusted net earnings
attributable to common shareholders using the non-GAAP measure. The above exceptions are made to include relevant diluted shares when dilution occurs and exclude relevant diluted shares when dilution does not occur for adjusted net earnings attributable to common shareholders. Management considers this non-GAAP financial measure to be useful internally and for investors and analysts to assess the level of return driven by the Company that is available to common shareholders. Adjusted Net Earnings attributable to common shareholders per Diluted Share Adjusted net earnings attributable to common shareholders per diluted share is calculated as adjusted net earnings plus preferred stock dividend (if the preferred stock has created dilution). This sum is then divided by the adjusted weighted-average diluted shares outstanding. Management considers this non-GAAP financial measure to be useful internally and for investors and analysts to assess the level of return driven by the Company that is available to common shareholders. Adjusted Return on Assets attributable to Common Shareholders Adjusted return on assets attributable to common shareholders is calculated by dividing year-to-date annualized adjusted net earnings attributable to common shareholders by year-to-date AAUM. Return on assets is comprised of net investment income, less cost of funds, flow reinsurance fee income, owned distribution margin and less expenses (including operating expenses, interest expense and income taxes) consistent with our adjusted net earnings definition and related adjustments. Cost of funds includes liability costs related to cost of crediting as well as other liability costs. Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing financial performance and profitability earned on AAUM. Adjusted Return on Average Common Shareholder Equity, excluding AOCI Adjusted return on average common shareholder equity is calculated by dividing the rolling four quarters adjusted net earnings attributable to common shareholders, by total average F&G equity attributable to common shareholders, excluding AOCI. Average equity attributable to common shareholders, excluding AOCI for the twelve month rolling period is the average of 5 points throughout the period. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments, changes in instrument-specific credit risk for market risk benefits and discount rate assumption changes for the future policy benefits, management considers this non-GAAP financial measure to be a useful internally and for investors and analysts to assess the level return driven by the Company's adjusted earnings. Assets Under Management (AUM) AUM is comprised of the following components and is reported net of reinsurance assets ceded in accordance with GAAP: (i) total invested assets at amortized cost, excluding investments in unconsolidated affiliates, owned distribution and derivatives; (ii) investments in unconsolidated affiliates at carrying value; (iii) related party loans and investments; (iv) accrued investment income; (v) the net payable/receivable for the purchase/sale of investments; and (vi) cash and cash equivalents excluding derivative collateral at the end of the period. Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the size of our investment portfolio that is retained. AUM before Reinsurance AUM before Reinsurance is comprised of AUM plus flow reinsured assets, including certain block reinsured assets. Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the size of our investment portfolio including reinsured assets. Average Assets Under Management (AAUM) (Quarterly and YTD) 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 financial measure to be useful internally and to investors and analysts when assessing the rate of return on retained assets. Book Value per Common Share, excluding AOCI Book value per Common share, excluding AOCI is calculated as total F&G equity attributable to common shareholders divided by the total number of shares of common stock outstanding. Management considers this to be a useful measure internally and for investors and analysts to assess the capital position of the Company. Debt-to-Capitalization Ratio, excluding AOCI Debt-to-capitalization ratio is computed by dividing total aggregate principal amount of debt by total capitalization (total debt plus total equity, excluding AOCI). Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing its capital position. Return on Average F&G common shareholder Equity, excluding AOCI Return on average F&G common shareholder equity, excluding AOCI is calculated by dividing the rolling four quarters net earnings (loss) attributable to common shareholders, by total average F&G equity attributable to common shareholders, excluding AOCI. Average F&G equity attributable to common shareholders, excluding AOCI for the twelve month rolling period is the average of 5 points throughout the period. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments, changes in instrument-specific credit risk for market risk benefits and discount rate assumption changes for the future policy benefits, management considers this non-GAAP financial measure to be useful internally and for investors and analysts to assess the level of return driven by the Company that is available to common shareholders. Sales Annuity, IUL, funding agreement and non-life contingent PRT sales are not derived from any specific GAAP income statement accounts or line items and should not be viewed as a substitute for any financial measure determined in accordance with GAAP. Sales from these products are recorded as deposit liabilities (i.e., contractholder funds) within the Company's consolidated financial statements in accordance with GAAP. Life contingent PRT sales are recorded as premiums in revenues within the consolidated financial statements. Management believes that presentation of sales, as measured for management purposes, enhances the understanding of our business and helps depict longer term trends that may not be apparent in the results of operations due to the timing of sales and revenue recognition. Total Capitalization, excluding AOCI Total capitalization, excluding AOCI is based on total equity excluding the effect of AOCI and the total aggregate principal amount of debt. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments, changes in instrument-specific credit risk for market risk benefits and discount rate assumption changes for the future policy benefits, management considers this non-GAAP financial measure to provide useful supplemental information internally and to investors and analysts to help assess the capital position of the Company. Total Equity, excluding AOCI Total equity, excluding AOCI is based on total 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, changes in instrument-specific credit risk for market risk benefits and discount rate assumption changes for the future policy benefits, management considers this non-GAAP financial measure to provide useful supplemental information internally and to investors and analysts assessing the level of earned equity on total equity. Total F&G Equity attributable to common shareholders, excluding AOCI Total F&G equity attributable to common shareholder, excluding AOCI is based on total F&G Annuities & Life, Inc. shareholders' equity excluding the effect of AOCI and preferred stocks, including additional paid-in-capital. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments, changes in instrument-specific credit risk for market risk benefits and discount rate assumption changes for the future policy benefits, management considers this non-GAAP financial measure to be useful internally and for investors and analysts to assess the level of return driven by the Company that is available to common shareholders.
View original content:https://www.prnewswire.com/news-releases/fg-annuities--life-reports-second-quarter-2026-results-302843953.html
SOURCE F&G Annuities & Life, Inc.