Fidelity National Financial, Inc. - FORM 8-K - EX-99.2 - November 4, 2020

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Exhibit 99.2

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FGL Holdings (“F&G”) - An Operating Segment of Fidelity National Financial, Inc. (NYSE:FNF)                 
Financial Supplement
September 30, 2020
(Year Ended December 31)

The financial statements and financial exhibits included herein are unaudited. F&G is an operating segment of FNF and 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.

F&G (formerly NYSE:FG) was acquired by FNF (the "Business Combination") on June 1, 2020 ("Closing Date"). As a result of the Business Combination, F&G delisted from the NYSE and became a subsidiary of FNF. Our financial statement presentation includes the financial statements of F&G and its subsidiaries as a standalone entity ("Pre-Merger") for the periods prior to the completion of the Business Combination, and F&G and its subsidiaries as an operating segment of FNF ("Post-Merger") for periods from and after the Closing Date.

All dollar amounts are presented in millions.

Non-GAAP Financial Measures

This document contains certain non-GAAP financial measures commonly used in our industry that, together with the relevant GAAP measures, may enhance a user’s ability to analyze the Company's operating performance and capital position for the periods presented. These measures should be considered supplementary to our results in accordance with GAAP and should not be viewed as a substitute for the GAAP measures and are not intended to replace GAAP financial results. 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.




1
F&G - An Operating Segment of FNF
Financial Supplement - September 30, 2020
(All periods are unaudited)

Page
4
Reconciliation of Total Shareholders' Equity to Common Shareholders' Equity Excluding AOCI
Financial Strength Ratings
Total Product Net Investment Spread
FIA Net Investment Spread

2
F&G - An Operating Segment of FNF
Financial Supplement - September 30, 2020
(All periods are unaudited)

Consolidated Financial Highlights

Three months endedOne month endedTwo months endedThree months ended
September 30, 2020June 30, 2020May 31, 2020March 31, 2020December 31, 2019September 30, 2019
Post-MergerPost-MergerPre-MergerPre-MergerPre-MergerPre-Merger
(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Select Income Statement Data:
Net earnings (loss) attributable to common shareholders38 (39)19 (346)217 58 
Adjusted net earnings (loss) attributable to common shareholders (1)74 33 40 33 94 79 
Select Metrics:
Average Assets Under Management ("AAUM") (1)26,990 26,582 29,285 28,924 28,332 27,871 
Net investment spread (1)2.62 %3.50 %1.92 %2.24 %2.41 %2.05 %
Sales
FIA815 244 622 831 795 590 
Fixed rate annuities (MYGA)253 14 33 114 126 107 
Institutional spread based— — — 100 — 100 
Total annuity1,068 258 655 1,045 921 797 
Index universal life14 4 8 11 11 9 
Flow reinsurance51 34 108 122 122 108 
Total Sales$1,133 $296 $771 $1,178 $1,054 $914 
(1) Refer to "Non-GAAP Financial Measures Definitions"
3
F&G - An Operating Segment of FNF
Financial Supplement - September 30, 2020
(All periods are unaudited)


Appendix to Consolidated Financial Highlights
Effective June 1, 2020, certain blocks of business were designated as discontinued operations by FNF. Amounts related to these blocks of business are presented herein as adjustments to key financial metrics, solely for comparison between Pre-Merger and Post-Merger periods. See FNF 10Q for further discussion on discontinued operations.

Three months endedOne month endedTwo months endedThree months ended
September 30, 2020June 30, 2020May 31, 2020March 31, 2020December 31, 2019September 30, 2019
Post-MergerPost-MergerPre-MergerPre-MergerPre-MergerPre-Merger
(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Select Income Statement Data:
Net earnings (loss) attributable to common shareholders38 (39)19 (346)217 $58 
   Less: discontinued operations [(earnings)/loss] 28 (5)(22)155 (46)(14)
As adjusted for discontinued operations66 (44)(3)(191)171 44 
Adjusted net earnings (loss) attributable to common shareholders (1)74 33 40 33 94 79 
   Less: discontinued operations [(earnings)/loss]— — 8 26 (4)(18)
As adjusted for discontinued operations74 33 48 59 90 61 
Less: Notable items [(unfavorable)/favorable] (2)10 8 5 (6)15 2 
As adjusted for discontinued operations and notable items$64 $25 $43 $65 $75 $59 
Select Metrics:
AAUM (1)26,990 26,582 29,285 28,924 28,332 27,871 
   Less: discontinued operations — — (2,236)(2,266)(2,183)(2,040)
As adjusted for discontinued operations26,990 26,582 27,049 26,658 26,149 25,831 
Net investment spread (1)2.62 %3.50 %1.92 %2.24 %2.41 %2.05 %
   Less: discontinued operations [(earnings)/loss] (3)— %— %0.13 %0.09 %0.03 %0.07 %
As adjusted for discontinued operations2.62 %3.50 %2.05 %2.33 %2.44 %2.12 %
(1) Refer to "Non-GAAP Financial Measures Definitions"
(2) Notable items from continuing operations. For full list of notable items, refer to page 8 "Notable Items"
(3) Subsequent to the release of the Quarterly Financial Supplement dated August 4, 2020, management identified an immaterial adjustment that was needed to reflect the correct amount in the prior period. Periods affected were the two months ended May 31, 2020 and the three months ended March 31, 2020 and September 30, 2019



4
F&G - An Operating Segment of FNF
Financial Supplement - September 30, 2020
(All periods are unaudited)
            
Condensed Consolidated Balance Sheets

September 30, 2020June 30, 2020March 31, 2020December 31,
2019		September 30, 2019
Post-MergerPost-MergerPre-MergerPre-MergerPre-Merger
(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Assets
Investments:
Fixed maturity securities available for sale, at fair value, net of allowance for credit losses of $13 at September 30, 2020$24,218 $23,014 $21,140 $23,726 $23,907 
Preferred securities, at fair value917 875 873 1,001 1,027 
Equity securities, at fair value54 54 42 70 70 
Derivative investments381 333 188 587 454 
Mortgage loans, net of allowance for credit losses of $35 at September 30, 20201,614 1,749 1,769 1,267 836 
Investments in unconsolidated affiliates (a)1,125 1,045 1,071 1,013 923 
Other long-term investments438 432 421 289 155 
Short-term investments34 38 36 38 37 
Total investments$28,781 27,540 25,540 27,991 27,409 
Cash and cash equivalents1,014 909 740 931 953 
Trade and notes receivables2 2 1 1 1 
Funds withheld for reinsurance receivable, at fair value— — 2,050 2,172 2,045 
Reinsurance recoverable, net of allowance for credit losses of $22 at September 30, 20203,152 3,182 3,186 3,213 3,250 
Goodwill (a)1,731 1,725 467 467 467 
Prepaid expenses and other assets448 381 384 355 435 
Lease assets7 8 9 9 3 
Other intangible assets, net (a)1,956 2,060 2,070 1,495 1,438 
Property and equipment, net7 2 2 2 1 
Income taxes receivable19 24 23 15 21 
Deferred tax asset (a)107 180 264 61 92 
Assets of discontinued operations2,618 2,502 — — — 
Total assets$39,842 $38,515 $34,736 $36,712 $36,115 
(a) These line items included adjustments that were recorded during the remeasurement period subsequent to the June 1, 2020 acquisition. The following adjustments were recorded as of the opening balance sheet at June 1, 2020 during the quarter ending, September 30, 2020: Investment in unconsolidated affiliates, $31, Goodwill, $6, Other intangible assets, net, ($37), and Deferred tax asset, ($3).
5
F&G - An Operating Segment of FNF
Financial Supplement - September 30, 2020
(All periods are unaudited)
Condensed Consolidated Balance Sheets (continued)
September 30, 2020June 30, 2020March 31, 2020December 31,
2019		September 30, 2019
Post-MergerPost-MergerPre-MergerPre-MergerPre-Merger
(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Liabilities and Shareholders' Equity
Contractholder funds (a)27,488 26,628 26,226 25,684 25,355 
Future policy benefits4,048 4,092 5,658 5,735 5,714 
Accounts payable and accrued liabilities1,056 983 1,007 1,167 1,088 
Notes payable589 589 543 542 542 
Funds withheld for reinsurance liabilities814 817 821 831 838 
Lease liabilities12 13 9 9 3 
Liabilities of discontinued operations2,462 2,347 — — — 
Total liabilities36,469 35,469 34,264 33,968 33,540 
Shareholders' equity:
Additional paid-in-capital2,739 2,737 2,041 2,032 2,022 
Retained earnings (accumulated deficit)(1)(39)(72)300 85 
Accumulated other comprehensive income (loss)635 348 (1,428)481 520 
Treasury stock— — (69)(69)(52)
Total shareholders' equity3,373 3,046 472 2,744 2,575 
Total liabilities and shareholders' equity$39,842 $38,515 $34,736 $36,712 $36,115 
(a) This line item included a $3 adjustment that was recorded as of the opening balance sheet at June 1, 2020 during the quarter ending, September 30, 2020.


Reconciliation of Total Shareholders' Equity to Common Shareholders' Equity Excluding AOCI
September 30, 2020June 30, 2020March 31, 2020December 31, 2019September 30, 2019
Post-MergerPost-MergerPre-MergerPre-MergerPre-Merger
(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Total shareholders' equity3,373 3,046 472 2,744 2,575 
Equity attributable to preferred shareholders (1)— — 446 438 430 
Common shareholders' equity (1)3,373 3,046 26 2,306 2,145 
AOCI762 348 (1,428)481 520 
Total common shareholders' equity excluding AOCI (1)$2,611 $2,698 $1,454 $1,825 $1,625 
(1) Refer to "Non-GAAP Financial Measures Definitions"


6
F&G - An Operating Segment of FNF
Financial Supplement - September 30, 2020
(All periods are unaudited)
Condensed Consolidated Statements of Operations

Three months endedOne month endedTwo months endedThree months ended
September 30, 2020June 30, 2020May 31, 2020March 31, 2020December 31, 2019September 30, 2019
Post-MergerPost-MergerPre-MergerPre-MergerPre-MergerPre-Merger
(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Revenues:
Life insurance premiums and other fees (a)$60 $20 $52 $41 $43 $51 
Interest and investment income305 111 111 316 324 301 
Recognized gains and losses, net77 (7)257 (692)196 103 
      Total revenues442 124 420 (335)563 455 
Benefits and expenses:
Benefits and other changes in policy reserves251 155 356 (41)119 331 
Personnel costs23 9 15 21 21 17 
Other operating expenses33 12 40 74 64 28 
Depreciation and amortization56 3 1 (60)78 14 
Interest expense7 3 5 8 8 8 
      Total benefits and expenses370 182 417 2 290 398 
Pre-tax earnings (loss) from continuing operations72 (58)3 (337)273 57 
   Federal income tax expense(5)14 17 (1)(48)9 
   State income tax expense(1)— (1)— — (1)
Net earnings (loss) from continuing operations66 (44)19 (338)225 65 
   Earnings from discontinued operations, net of tax(28)5 — — — — 
Less Preferred stock dividend— — — (8)(8)(7)
Net earnings (loss) attributable to common shareholders$38 $(39)$19 $(346)$217 $58 
(a) Included within "Escrow, title-related and other fees" in FNF 10-Q
7
F&G - An Operating Segment of FNF
Financial Supplement - September 30, 2020
(All periods are unaudited)

Reconciliation from Net Earnings (Loss) to Adjusted Net Earnings (1)
Three months endedOne month endedTwo months endedThree months ended
September 30, 2020June 30, 2020May 31, 2020March 31, 2020December 31, 2019September 30, 2019
Post-MergerPost-MergerPre-MergerPre-MergerPre-MergerPre-Merger
(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Net earnings (loss) from continuing operations$66 $(44)$19 $(338)$225 $65 
Less Preferred stock dividend— — — (8)(8)(7)
Net earnings (loss) from continuing operations attributable to common shareholders$66 $(44)$19 $(346)$217 $58 
Non-GAAP adjustments (1):
Recognized (gains) and losses, net(15)46 68 94 (34)(26)
Indexed product related derivatives14 43 (28)287 (134)63 
Purchase price amortization7 2 — — — — 
Transaction costs and other non-recurring items10 7 4 34 11 (6)
Income taxes on non-GAAP adjustments(8)(21)(23)(36)34 (10)
Adjusted net earnings from continuing operations attributable to common shareholders (1) (2)$74 $33 $40 $33 0$94 $79 


Notable Items
Each quarterly reporting period, we identify notable items that help explain the trends in our Net earnings (loss) from continuing operations attributable to common shareholders and Adjusted net earnings (loss) from continuing operations attributable to common shareholders as we believe these items provide further clarity to the financial performance of the business. 
Three months endedOne month endedTwo months endedThree months ended
September 30, 2020June 30, 2020May 31, 2020March 31, 2020December 31, 2019September 30, 2019
Post-MergerPost-MergerPre-MergerPre-MergerPre-MergerPre-Merger
(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Adjusted net earnings from continuing operations attributable to common shareholders (1) (2)$74 $33 $40 $33 $94 $79 
Notable items [(unfavorable)/favorable]
Project expenses (a)— — (2)(2)(10)— 
Single premium immediate annuities ("SPIA") mortality & other reserve adjustments (b)10 4 6 (5)15 (2)
Assumption review and unlocking (c)— — (4)— 4 7 
Other (d)— 4 5 (25)15 15 
(1) Refer to "Non-GAAP Financial Measures Definitions"
(2) Subsequent to the release of the Quarterly Financial Supplement dated August 4, 2020, management identified a $4 adjustment that was needed to reflect the correct adjusted net earnings amount in the one month ended June 30, 2020.
(a) Costs incurred during research and exploration of potential merger or acquisition of a business or a group of insurance policies via asset acquisition or (inforce) reinsurance agreement.
(b) The release of annuity reserves associated with mortality of annuitants, which varies due to timing, volume and severity of experience, and other reserve adjustments.
(c) Reflects unlocking from updating our DAC, VOBA, DSI and cost of reinsurance amortization models for actual experience and equity market fluctuations. Also, annually in the 3rd calendar quarter, we complete our Annual Assumption Review & Unlocking process by adjusting our valuation assumptions to align with actual experience.
(d) Bond prepayment income, changes in tax valuation, and other net activity.
8
F&G - An Operating Segment of FNF
Financial Supplement - September 30, 2020
(All periods are unaudited)


Adjusted Net Earnings Statement (1)

Three months endedOne month endedTwo months endedThree months ended
September 30, 2020June 30, 2020May 31, 2020March 31, 2020December 31, 2019September 30, 2019
Post-MergerPost-MergerPre-MergerPre-MergerPre-MergerPre-Merger
(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Revenues:
      Life insurance premiums and other fees (a)$60 $20 $42 $53 $44 $49 
      Interest and investment income (b)314 120 200 317 324 301 
      Recognized gains and losses, net (c)(1)1 22 (34)23 5 
          Total revenues373 141 264 336 391 355 
Benefits and expenses:
      Benefits and other changes in policy reserves (d)177 62 131 161 151 175 
      Personel costs23 9 15 21 21 17 
      Other operating expenses (e)23 6 37 41 53 35 
      Depreciation and amortization (f)56 21 32 27 42 34 
      Interest expense7 3 5 8 8 8 
         Total benefits and expenses286 101 220 258 275 269 
Pre-tax earnings (loss) from continuing operations87 40 44 78 116 86 
 Federal income tax expense(12)(7)(5)(37)(14)— 
 State income tax expense(1)— 1 — — — 
Adjusted net earnings74 33 40 41 102 86 
Less: Preferred stock dividend— — — (8)(8)(7)
Adjusted net earnings from continuing operations attributable to common shareholders (1) (2)$74 $33 $40 $33 $94 $79 
Notable items included in adjusted net earnings attibutable to common shareholders (3)$10 $8 $5 $(32)$24 $20 

(1) Refer to "Non-GAAP Financial Measures Definitions"
(2) Subsequent to the release of the Quarterly Financial Supplement dated August 4, 2020, management identified a $4 adjustment that was needed to reflect the correct adjusted earnings amount in the one month ended June 30, 2020.
(3) Refer to page 8 "Notable Items" for further detail of notable items.
(a) Life insurance premiums and other fees are included within "Escrow, title-related and other fees" in FNF 10-Q, and have been adjusted here to remove the effect of cost of reinsurance.
(b) Interest and investment income has been adjusted to remove the market volatility on the alternative investment portfolio for periods after March 31, 2020.
(c) Recognized gains and losses (net) have been adjusted to remove the effect of recognized (gains) losses including changes in allowance for expected credit losses and OTTI; changes in fair values of indexed product related derivatives and embedded derivatives, net of hedging costs; and the change in fair value of the reinsurance related embedded derivative.
(d) Benefits and other changes in policy reserves has been adjusted to remove the effects of the changes in fair values of indexed product embedded derivatives, changes in allowance for expected credit losses on reinsurance recoverables, the fair value impacts of assumed reinsurance, and changes in the SOP 03-1 reserve resulting from the adjustments above, as applicable.
(e) Other operating expenses have been adjusted to remove the effects of transaction costs.
(f) Depreciation and amortization has been adjusted to remove the impact on DAC, VOBA, and DSI of the adjustments above, as applicable, and purchase price amortization.

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F&G - An Operating Segment of FNF
Financial Supplement - September 30, 2020
(All periods are unaudited)
Financial Strength Ratings
A.M. BestS&PMoody'sFitch
Holding Company Ratings
FGL Holdings
Issuer Credit / Default RatingNot RatedBBB-Ba2BBB
OutlookStableStableStable
CF Bermuda Holdings Limited
Issuer Credit / Default RatingNot RatedBBB-Ba1BBB
OutlookStableStableStable
Fidelity & Guaranty Life Holdings, Inc.
Issuer Credit / Default Ratingbbb-BBB-Not RatedBBB
OutlookStableStableStable
Senior Unsecured Notesbbb-BBBBaa2BBB
OutlookStableStable
Operating Subsidiary Ratings
Fidelity & Guaranty Life Insurance Company
Financial Strength RatingA-A-Baa1A-
OutlookStableStableStableStable
Fidelity & Guaranty Life Insurance Company of New York
Financial Strength RatingA-A-Not RatedA-
OutlookStableStableStable
F&G Life Re Ltd
Financial Strength RatingNot RatedA-Baa1A-
OutlookStableStableStable
F&G Cayman Re Ltd
Financial Strength RatingNot RatedNot RatedNot RatedA-
OutlookStable
F&G Reinsurance Ltd (1)
Financial Strength RatingA-Not RatedNot RatedBBB
OutlookUnder ReviewEvolving
(1) Rating outlook reflects classification of F&G Reinsurance Ltd as discontinued operations in 2Q20



10
F&G - An Operating Segment of FNF
Financial Supplement - September 30, 2020
(All periods are unaudited)
Total Product Net Investment Spread
Three months endedOne month endedTwo months endedThree months ended
September 30, 2020June 30, 2020May 31, 2020March 31, 2020December 31, 2019September 30, 2019
Post-MergerPost-MergerPre-MergerPre-MergerPre-MergerPre-Merger
(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Net investment income$305 $111 $111 $316 $324 $301 
AAUM (1)26,990 26,582 29,285 28,924 28,332 27,871 
Yield on AAUM (1)4.52 %5.01 %2.27 %4.38 %4.57 %4.32 %
Alternative investment yield adjustment (1)0.13 %0.41 %1.83 %
Adjusted Yield on AAUM (1)4.65 %5.42 %4.10 %
Interest credits$67 $21 $53 $76 $76 $79 
Option & futures costs$64 $19 43 60 63 63 
Total interest credited and option costs$131 $40 $96 $136 $139 $142 
   Average account value25,688 25,330 26,463 25,453 25,476 25,049 
  Interest credited & option cost2.03 %1.92 %2.18 %2.14 %2.16 %2.27 %
   Net investment spread (1)2.62 %3.50 %1.92 %2.24 %2.41 %2.05 %
(1) Refer to "Non-GAAP Financial Measures Definitions" for further details. Periods after April 1, 2020 include alternative investment yield adjustment.



















11
F&G - An Operating Segment of FNF
Financial Supplement - September 30, 2020
(All periods are unaudited)

FIA Net Investment Spread
Three months endedOne month endedTwo months endedThree months ended
September 30, 2020June 30, 2020May 31, 2020March 31, 2020December 31, 2019September 30, 2019
Post-MergerPost-MergerPre-MergerPre-MergerPre-MergerPre-Merger
(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Net investment income$229 $68 $57 $216 $223 $196 
AAUM (1)18,312 18,267 18,623 18,111 17,628 17,120 
Yield on AAUM (1)5.00 %4.47 %1.84 %4.77 %5.06 %4.57 %
Alternative investment yield adjustment (1) (a)0.20 %0.59 %2.67 %
Adjusted Yield on AAUM (1)5.20 %5.06 %4.51 %
Interest credits$14 $4 $8 $13 $14 $13 
Option & futures costs$64 $19 $43 $60 $63 $63 
Total interest credited and option costs78 23 51 73 77 76 
   Average account value17,948 17,688 17,501 17,065 16,565 16,213 
  Interest credited & option cost1.73 %1.59 %1.76 %1.72 %1.85 %1.88 %
   Net investment spread3.47 %3.47 %2.75 %3.05 %3.21 %2.69 %

(1) Refer to "Non-GAAP Financial Measures Definitions" for further details. Periods after April 1, 2020 include alternative investment yield adjustment.



12
F&G - An Operating Segment of FNF
Financial Supplement - September 30, 2020
(All periods are unaudited)


Average Assets Under Management Rollforward

Three months endedOne month endedTwo months endedThree months ended
September 30, 2020June 30, 2020May 31, 2020March 31, 2020December 31, 2019September 30,
2019
Post-MergerPost-MergerPre-MergerPre-MergerPre-MergerPre-Merger
(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
AAUM at beginning of period (1)$26,582 $26,529 $28,924 $28,332 $27,871 $27,388 
Net new business sales431 66 473 600 494 484 
Net reinsurance transactions and other(23)(13)(112)(8)(33)(1)
AAUM at end of period$26,990 $26,582 $29,285 $28,924 $28,332 $27,871 
(1) Beginning balance for June 30, 2020 represents assets under management at June 1, 2020 and reflects $2.3 billion decrease from the exclusion of discontinued operations and $0.5 billion decrease from purchase accounting mark-to-market effect as compared to the May 31, 2020 ending balance.


Annuity Account Balance Rollforward (a)
Three months endedOne month endedTwo months endedThree months ended
September 30, 2020June 30, 2020May 31, 2020March 31, 2020December 31,
2019		September 30, 2019
Post-MergerPost-MergerPre-MergerPre-MergerPre-MergerPre-Merger
(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Account balances at beginning of period:$21,442 $21,332 $20,999 $20,402 $20,052 $19,701 
Net deposits1,046 245 675 940 920 696 
Surrenders, withdrawals, deaths, etc.(482)(161)(381)(452)(675)(420)
Net flows564 84 294 488 245 276 
Premium and interest bonuses17 4 12 17 19 16 
Fixed interest credited and index credits114 29 50 123 118 86 
Guaranteed product rider fees(31)(7)(23)(31)(32)(27)
Account balance at end of period$22,106 $21,442 $21,332 $20,999 $20,402 $20,052 
(a) The rollforward reflects the vested account balance of our fixed index annuities and fixed rate annuities, net of reinsurance.
13
F&G - An Operating Segment of FNF
Financial Supplement - September 30, 2020
(All periods are unaudited)

Annuity Liability Characteristics

Fixed Annuities Account ValueFixed Index Annuities Account Value
September 30, 2020
(Unaudited)
SURRENDER CHARGE PERCENTAGES:
No surrender charge$408 $2,335 
0.0% < 2.0%8 44 
2.0% < 4.0%20 433 
4.0% < 6.0%585 1,631 
6.0% < 8.0%1,392 2,237 
8.0% < 10.0%1,534 4,396 
10.0% or greater2 7,081 
$3,949 $18,157 


Fixed Annuities Account ValueFixed Index Annuities Account Value
September 30, 2020
(Unaudited)
CREDITED RATE (INCLUDING BONUS INTEREST) VS. ULTIMATE MINIMUM GUARANTEED RATE DIFFERENTIAL:
No differential$489 $1,274 
0.0% - 1.0%216 1,425 
1.0% - 2.0%950 33 
2.0% - 3.0%2,294 1 
Allocated to index strategies— 15,424 
$3,949 $18,157 




14
F&G - An Operating Segment of FNF
Financial Supplement - September 30, 2020
(All periods are unaudited)




Summary of Invested Assets by Asset Class

September 30, 2020December 31, 2019
Post-MergerPre-Merger
(Unaudited)(Unaudited)
Amortized CostFair ValuePercentAmortized CostFair ValuePercent
Fixed maturity securities, available for sale:
United States Government full faith and credit$38 $38 — %$33 $34 — %
United States Government sponsored entities112 113 — %133 134 — %
United States municipalities, states and territories1,303 1,356 5 %1,284 1,343 5 %
Foreign Governments134 143 — %138 155 1 %
Corporate securities:
Finance, insurance and real estate4,192 4,360 15 %4,038 4,234 15 %
Manufacturing, construction and mining841 901 3 %739 771 3 %
Utilities, energy and related sectors2,435 2,533 9 %2,345 2,452 9 %
Wholesale/retail trade1,822 1,929 7 %1,576 1,617 6 %
Services, media and other2,547 2,656 9 %2,353 2,523 9 %
Hybrid securities926 964 3 %983 1,027 4 %
Non-agency residential mortgage-backed securities733 735 3 %784 820 3 %
Commercial mortgage-backed securities2,482 2,751 10 %2,788 2,922 10 %
Asset-backed securities1,590 1,659 6 %1,774 1,813 6 %
CLO securities3,936 4,079 14 %3,946 3,881 14 %
Alternative investments1,121 1,125 4 %1,084 1,077 4 %
Equity securities940 972 3 %999 1,002 4 %
Commercial mortgage loans546 560 2 %422 435 1 %
Residential mortgage loans1,103 1,079 4 %845 848 3 %
Other (primarily derivatives and policy loans)780 814 3 %628 867 3 %
Short term investments34 34 — %38 38 — %
Total (a)$27,615 $28,801 100 %$26,930 $27,993 100 %
(a) Asset duration, including cash and cash equivalents, of 6.62 years and 6.63 years vs. liability duration of 6.24 years and 6.80 years for the periods ending September 30, 2020 and December 31, 2019, respectively.
15
F&G - An Operating Segment of FNF
Financial Supplement - September 30, 2020
(All periods are unaudited)

Credit Quality of Fixed Maturity Securities
September 30, 2020
(Unaudited)
NAIC DesignationFair ValuePercent
1$12,659 52 %
29,712 40 %
31,335 6 %
4374 2 %
5137 — %
61 — %
$24,218 100 %


September 30, 2020
(Unaudited)
Rating Agency RatingFair ValuePercent
AAA$530 2 %
AA1,602 7 %
A6,576 27 %
BBB8,977 37 %
Not rated4,266 18 %
Total investment grade21,951 91 %
BB1,581 7 %
B and below570 2 %
Not rated116 — %
Total below investment grade2,267 9 %
$24,218 100 %

16
F&G - An Operating Segment of FNF
Financial Supplement - September 30, 2020
(All periods are unaudited)
Summary of Residential Mortgage Backed Securities by Collateral Type and NAIC Designation

September 30, 2020
(Unaudited)
Total by collateral typeAmortized CostFair Value
Government agency$111 $111 
Prime546 547 
Subprime77 77 
Alt-A112 113 
$846 $848 
September 30, 2020
(Unaudited)
Total by NAIC designationAmortized CostFair Value
1$817 $818 
219 19 
31 1 
49 10 
5— — 
$846 $848 


17
F&G - An Operating Segment of FNF
Financial Supplement - September 30, 2020
(All periods are unaudited)
Top 10 Holdings by Issuers

September 30, 2020
(Unaudited)
Issuer (a):Fair ValuePercentage of Total Invested Assets
HP Enterprise Co$136 0.5 %
HSBC Holdings131 0.4 %
Verizon Communications Inc.114 0.4 %
Entergy Corp114 0.4 %
AT&T Inc.112 0.4 %
Metropolitan Transportation Authority (NY)110 0.4 %
Nationwide Mutual Insurance Company109 0.4 %
Blackstone Div Alt Issuer108 0.4 %
CVI CVF III Master Fund II LL106 0.4 %
Catholic Health Initiatives105 0.4 %
(a) Issuers excluding U.S. Governmental securities.
Top 5 Reinsurers


September 30, 2020
(Unaudited)
Financial Strength Rating
Parent Company/Principal ReinsurersReinsurance Recoverable (a)AM BestS&PFitchMoody's
 Wilton Re$1,467  A+  Not Rated A+Not Rated
 Kubera Insurance (SAC) Ltd821  Not Rated Not RatedNot RatedNot Rated
Security Life of Denver 152 Not RatedA+AA3
Hannover Re128 A+AA-Not RatedNot Rated
London Life125 A+Not RatedNot RatedNot 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.

18
F&G - An Operating Segment of FNF
Financial Supplement - September 30, 2020
(All periods are unaudited)
Non-GAAP Financial Measures Definitions
The following represents the definitions of non-GAAP measures used by F&G, as an operating segment of FNF:
Adjusted Net Earnings
Adjusted Net Earnings is a non-GAAP economic measure we use to evaluate financial performance each period. Adjusted net earnings is calculated by adjusting net earnings (loss) from continuing operations 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; the impact of market volatility on the alternative asset portfolio; and the effect of changes in fair value of the reinsurance related embedded derivative;
(ii) Indexed product related derivatives: 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, and the fair value accounting impact of assumed reinsurance,
(iii) Purchase price amortization: the impacts related to the amortization of certain intangibles (internally developed software, trademarks and value of distribution asset (VODA)) recognized as a result of acquisition activities, and
(iv) Transaction costs: the impacts related to acquisition, integration and merger related items.
Adjustments to Adjusted Net Earnings are net of the corresponding impact on amortization of intangibles, as appropriate. The income tax impact related to these adjustments is measured using an effective tax rate, as appropriate by tax jurisdiction. 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.
Effective April 1, 2020, F&G changed their definition of Adjusted Earnings to exclude the impact of market volatility on the alternative asset portfolio. Alternative investment valuations and GAAP net income can reflect significant non-cash impacts of market and economic conditions that are not indicative of expected returns over the life of the investments. Management invests in alternative investments to back future policyholder obligations consistent with its asset liability management strategy. Management evaluates the performance of the alternative investments and calculates Adjusted Earnings using a rate of return that is consistent with its investment strategy and indicative of expected returns. Management believes this change provides users of the financial statements and other financial communications a more representative view of the results of the core business of F&G for the periods after April 1, 2020. Previous periods have not been adjusted.
Adjusted Net Earnings from Continuing Operations Attributable to Common Shareholders
Adjusted Net Earnings from continuing operations attributable to common shareholders is a non-GAAP economic measure we use to evaluate financial performance attributable to our common shareholders each period. Adjusted net earnings from continuing operations attributable to common shareholders is calculated by adjusting net earnings (loss) available to common shareholders to eliminate the same items as described in the Adjusted Net Earnings paragraph above. While these adjustments are an integral part of the overall performance of the Company, 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.
Common Shareholders’ Equity
Common Shareholders’ Equity is based on Total Shareholders’ Equity excluding Equity Available to Preferred Shareholders. Management considers this to be a useful measure internally and to investors to assess the level of equity that is attributable common stock holders.
Common Shareholders’ Equity Excluding AOCI
Common Shareholders’ Equity Excluding AOCI is based on Common Shareholders' 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, 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 common equity.
19
F&G - An Operating Segment of FNF
Financial Supplement - September 30, 2020
(All periods are unaudited)
Equity Attributable to Preferred Shareholders
Equity attributable to preferred shareholders is equal to the product of (a) the number of preferred shares outstanding plus share dividends declared but not yet issued and (b) the original liquidation preference amount per share. Management considers this non-GAAP measure to provide useful information internally and to investors and analysts to assess the level of equity that is attributable to preferred stock holders. (Note: F&G no longer has any preferred shareholders following the Business Combination)
Average Assets Under Management (AAUM)
AAUM is calculated as the sum of:
(i) total invested assets at amortized cost, excluding derivatives;
(ii) related party loans and investments;
(iii) accrued investment income;
(iv) the net payable/receivable for the purchase/sale of investments, and
(v) cash and cash equivalents, excluding derivative collateral, 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 assets available for reinvestment.
Yield on AAUM
Yield on AAUM is calculated by dividing annualized net investment income by AAUM. Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the level of return earned on AAUM.
Alternative Investment Yield Adjustment
Alternative investment yield adjustment is the current period yield impact of market volatility on the alternative investment portfolio. Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the level of return earned on AAUM.
Adjusted Yield on AAUM
Adjusted Yield on AAUM is calculated by dividing annualized net investment income by AAUM, plus or minus the alternative investment yield adjustment. Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the level of return earned on AAUM.
Net Investment Spread
Net investment spread is the excess of net investment income, adjusted for market volatility on the alternative asset investment portfolio, earned over the sum of interest credited to policyholders and the cost of hedging our risk on indexed product policies. Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the performance of the Company’s invested assets against the level of investment return provided to policyholders, inclusive of hedging costs.

20

Fidelity National Financial, Inc. Reports