FNF Reports Third Quarter 2024 Financial Results
Net earnings attributable to common shareholders for the third quarter were
Adjusted net earnings attributable to common shareholders (adjusted net earnings) for the third quarter were
- The Title Segment contributed
$244 million , in line with$245 million for the third quarter of 2023 - The F&G Segment contributed
$135 million , compared to$102 million for the third quarter of 2023, including alternative investment returns below our long-term expectations of$35 million and net significant income items of$16 million . Please see "Segment Financial Results" for F&G under "Non-GAAP Measures and Other Information" for further explanation - The Corporate Segment had adjusted net earnings of
$3 million before eliminating$26 million of dividend income from F&G in the consolidated financial statements, compared to$8 million for the third quarter of 2023 before eliminating$22 million of dividend income from F&G in the consolidated financial statements
Company Highlights
-
Strong Title Segment revenue and margin; continue to successfully navigate current market: For the Title Segment, total revenue of
$2.1 billion for the quarter, a 12% increase over$1.9 billion in the third quarter of 2023. Total revenue, excluding recognized gains and losses, of$2.0 billion for the third quarter, a 6% increase over$1.9 billion in the third quarter of 2023. Adjusted pre-tax title margin was 15.9% for the quarter, compared to 16.2% in the third quarter of 2023 -
F&G Segment robust sales growth across multi-channel platform drove record assets under management: For the F&G Segment, gross sales of
$3.9 billion for the third quarter increased 39% over the third quarter of 2023. F&G achieved record assets under management before flow reinsurance of$62.9 billion at the end of the third quarter, an increase of 20% over the third quarter of 2023 -
Sustainable common dividend backed by strong balance sheet: FNF paid common dividends of
$0.48 per share for$130 million and ended the third quarter with$822 million in cash and short-term liquid investments at the holding company
Summary Financial Results
|
(In millions, except per share data) |
Three Months Ended |
Year to Date |
||||
|
|
|
|
|
2024 |
|
2023 |
|
Total revenue |
$ 3,603 |
|
$ 2,778 |
$ 10,060 |
|
$ 8,320 |
|
F&G total gross sales1 |
$ 3,878 |
|
$ 2,781 |
$ 11,793 |
|
$ 9,070 |
|
F&G assets under management (AUM)1 |
$ 52,464 |
|
$ 47,103 |
$ 52,464 |
|
$ 47,103 |
|
F&G AUM before flow reinsurance1 |
$ 62,875 |
|
$ 52,577 |
$ 62,875 |
|
$ 52,577 |
|
Total assets |
$ 94,672 |
|
$ 74,002 |
$ 94,672 |
|
$ 74,002 |
|
Adjusted pre-tax title margin |
15.9 % |
|
16.2 % |
14.5 % |
|
14.3 % |
|
Net earnings attributable to common shareholders |
$ 266 |
|
$ 426 |
$ 820 |
|
$ 586 |
|
Net earnings per share attributable to common shareholders |
$ 0.97 |
|
$ 1.57 |
$ 3.00 |
|
$ 2.16 |
|
Adjusted net earnings1 |
$ 356 |
|
$ 333 |
$ 900 |
|
$ 758 |
|
Adjusted net earnings per share1 |
$ 1.30 |
|
$ 1.23 |
$ 3.30 |
|
$ 2.80 |
|
Weighted average common diluted shares |
273 |
|
271 |
273 |
|
271 |
|
Total common shares outstanding |
274 |
|
272 |
274 |
|
272 |
|
1 See definition of non-GAAP measures below |
Segment Financial Results
Title Segment
This segment consists of the operations of the Company's title insurance underwriters and related businesses, which provide core title insurance and escrow and other title-related services including loan sub-servicing, valuations, default services, and home warranty.
Third Quarter 2024 Highlights
-
Total revenue of
$2.1 billion , compared with$1.9 billion in the third quarter of 2023 -
Total revenue, excluding recognized gains and losses, of
$2.0 billion , a 6% increase over the third quarter of 2023- Direct title premiums of
$571 million , a 9% increase over third quarter of 2023 - Agency title premiums of
$789 million , an 8% increase over third quarter of 2023 - Commercial revenue of
$290 million , a 10% increase over third quarter of 2023
- Direct title premiums of
- Purchase orders opened increased 1% on a daily basis over the third quarter of 2023, and purchase orders closed decreased 2% on a daily basis from the third quarter of 2023
- Refinance orders opened increased 46% on a daily basis and refinance orders closed increased 17% on a daily basis over the third quarter of 2023
- Commercial orders opened increased 3% and commercial orders closed increased 1% over the third quarter of 2023
-
Total fee per file of
$3,708 for the third quarter, a 2% increase over the third quarter of 2023
Third Quarter 2024 Financial Results
- Pre-tax title margin of 17.7% and industry leading adjusted pre-tax title margin of 15.9% for the third quarter of 2024, compared to 13.2% and 16.2%, respectively, for the third quarter of 2023
-
Pre-tax earnings from continuing operations in Title for the third quarter of
$372 million , compared with$248 million for the third quarter of 2023 -
Adjusted pre-tax earnings in Title for the third quarter of
$323 million , compared with$311 million for the third quarter of 2023
F&G Segment
This segment consists of operations of FNF's majority-owned subsidiary F&G, a leading provider of insurance solutions serving retail annuity and life customers and funding agreement and pension risk transfer institutional clients.
Third Quarter 2024
-
Robust profitable gross sales: Gross sales of
$3.9 billion for the third quarter, an increase of 39% over the third quarter of 2023, primarily driven by record retail sales -
Record Retail channel sales of
$3.5 billion for the third quarter, an increase of 84% over the third quarter of 2023, driven by favorable market conditions and strong demand for retirement savings products -
Institutional market sales of nearly
$0.4 billion of pension risk transfer for the third quarter, compared to$0.9 billion of pension risk transfer and funding agreements for third quarter of 2023; institutional sales are opportunistic and volumes vary quarter to quarter -
Net sales of
$2.4 billion for the third quarter, an increase of 4% over the third quarter of 2023 -
Record AUM before flow reinsurance of
$62.9 billion at the end of the third quarter increased 20% over the third quarter of 2023. This included record AUM of$52.5 billion , an increase of 11% from the third quarter of 2023, driven by retained new business flows and net debt and equity proceeds over the past twelve months -
Net loss attributable to common shareholders for F&G Segment of
$5 million for the third quarter due to unfavorable mark-to-market movement, compared to net earnings of$259 million for the third quarter of 2023 which included favorable mark-to-market movement -
Adjusted net earnings attributable to common shareholders for F&G Segment of
$135 million for the third quarter, compared to$102 million for the third quarter of 2023- F&G's adjusted net earnings reflect alternatives investment portfolio short-term mark-to-market movement that differs from long-term return expectation. The third quarter of 2024 includes short term investment income from alternative investments and
$16 million of net significant income items, whereas the third quarter of 2023 included short term investment income from alternative investments and no significant income or expense items - As compared to the prior year quarter, adjusted net earnings reflect asset growth, margin diversification from accretive flow reinsurance fees and owned distribution margin, disciplined expense management and higher interest expense due to planned capital market activity
- Please see "Segment Financial Results" for F&G under "Non-GAAP Measures and Other Information" for further explanation
- F&G's adjusted net earnings reflect alternatives investment portfolio short-term mark-to-market movement that differs from long-term return expectation. The third quarter of 2024 includes short term investment income from alternative investments and
Conference Call
We will host a call with investors and analysts to discuss FNF's third quarter 2024 results on
About
About F&G
F&G is part of the FNF family of companies. 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
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 earnings release 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. These non-GAAP measures include adjusted net earnings per share, adjusted pre-tax title earnings, adjusted pre-tax title earnings as a percentage of adjusted title revenue (adjusted pre-tax title margin), adjusted net earnings attributable to common shareholders (adjusted net earnings), assets under management (AUM), average assets under management (AAUM) and sales.
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 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, FNF 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, net earnings per share, or any other measures derived in accordance with GAAP as measures of operating performance or liquidity. Further, FNF's non-GAAP measures may be calculated differently from similarly titled measures of other companies. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are provided below.
Forward-Looking Statements and Risk Factors
This press release contains forward-looking statements that involve a number of risks and uncertainties. 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: changes in general economic, business, political crisis, war and pandemic conditions, including ongoing geopolitical conflicts; weakness or adverse changes in the level of real estate activity, which may be caused by, among other things, high or increasing interest rates, a limited supply of mortgage funding or a weak
FNF-E
|
THIRD QUARTER SEGMENT INFORMATION (In millions, except per share data) (Unaudited) |
||||||||||
|
|
|
Consolidated |
|
Title |
|
F&G |
|
Corporate and |
|
Elimination |
|
Three Months Ended |
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
|
Direct title premiums |
|
$ 571 |
|
$ 571 |
|
$ — |
|
$ — |
|
$ — |
|
Agency title premiums |
|
789 |
|
789 |
|
— |
|
— |
|
— |
|
Escrow, title related and other fees |
|
1,159 |
|
581 |
|
526 |
|
52 |
|
— |
|
Total title and escrow |
|
2,519 |
|
1,941 |
|
526 |
|
52 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and investment income |
|
815 |
|
92 |
|
712 |
|
37 |
|
(26) |
|
Recognized gains and losses, net |
|
269 |
|
63 |
|
206 |
|
— |
|
— |
|
Total revenue |
|
3,603 |
|
2,096 |
|
1,444 |
|
89 |
|
(26) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Personnel costs |
|
810 |
|
688 |
|
80 |
|
42 |
|
— |
|
Agent commissions |
|
612 |
|
612 |
|
— |
|
— |
|
— |
|
Other operating expenses |
|
396 |
|
328 |
|
45 |
|
23 |
|
— |
|
Benefits & other policy reserve changes |
|
1,095 |
|
— |
|
1,095 |
|
— |
|
— |
|
Market risk benefit (gains) losses |
|
71 |
|
— |
|
71 |
|
— |
|
— |
|
Depreciation and amortization |
|
189 |
|
35 |
|
147 |
|
7 |
|
— |
|
Provision for title claim losses |
|
61 |
|
61 |
|
— |
|
— |
|
— |
|
Interest expense |
|
56 |
|
— |
|
36 |
|
20 |
|
— |
|
Total expenses |
|
3,290 |
|
1,724 |
|
1,474 |
|
92 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax earnings (loss) |
|
$ 313 |
|
$ 372 |
|
$ (30) |
|
$ (3) |
|
$ (26) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit) |
|
44 |
|
73 |
|
(25) |
|
(4) |
|
— |
|
Earnings (loss) from equity investments |
|
2 |
|
2 |
|
— |
|
— |
|
— |
|
Non-controlling interests |
|
5 |
|
5 |
|
— |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) attributable to common shareholders |
|
$ 266 |
|
$ 296 |
|
$ (5) |
|
$ 1 |
|
$ (26) |
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS attributable to common shareholders - basic |
|
$ 0.98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS attributable to common shareholders - diluted |
|
$ 0.97 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares - basic |
|
272 |
|
|
|
|
|
|
|
|
|
Weighted average shares - diluted |
|
273 |
|
|
|
|
|
|
|
|
|
THIRD QUARTER SEGMENT INFORMATION (In millions, except per share data) (Unaudited) |
||||||||||
|
|
|
Consolidated |
|
Title |
|
F&G |
|
Corporate and |
|
Elimination |
|
Three Months Ended |
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
|
Net earnings (loss) attributable to common shareholders |
|
$ 266 |
|
$ 296 |
|
$ (5) |
|
$ 1 |
|
$ (26) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax earnings (loss) |
|
$ 313 |
|
$ 372 |
|
$ (30) |
|
$ (3) |
|
$ (26) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjustments |
|
|
|
|
|
|
|
|
|
|
|
Recognized (gains) and losses, net |
|
(17) |
|
(63) |
|
46 |
|
— |
|
— |
|
Market related liability adjustments |
|
145 |
|
— |
|
145 |
|
— |
|
— |
|
Purchase price amortization |
|
39 |
|
14 |
|
22 |
|
3 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax earnings (loss) |
|
$ 480 |
|
$ 323 |
|
$ 183 |
|
$ — |
|
$ (26) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-GAAP, pre-tax adjustments |
|
$ 167 |
|
$ (49) |
|
$ 213 |
|
$ 3 |
|
$ — |
|
Income taxes on non-GAAP adjustments |
|
(33) |
|
12 |
|
(44) |
|
(1) |
|
— |
|
Non-controlling interest on non-GAAP adjustments |
|
(29) |
|
— |
|
(29) |
|
— |
|
— |
|
Deferred tax asset valuation allowance |
|
(15) |
|
(15) |
|
— |
|
— |
|
— |
|
Total non-GAAP adjustments |
|
$ 90 |
|
$ (52) |
|
$ 140 |
|
$ 2 |
|
$ — |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net earnings (loss) attributable to common shareholders |
|
$ 356 |
|
$ 244 |
|
$ 135 |
|
$ 3 |
|
$ (26) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EPS attributable to common shareholders - diluted |
|
$ 1.30 |
|
|
|
|
|
|
|
|
|
THIRD QUARTER SEGMENT INFORMATION (In millions, except per share data) (Unaudited) |
||||||||||
|
|
|
Consolidated |
|
Title |
|
F&G |
|
Corporate and |
|
Elimination |
|
Three Months Ended |
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
|
Direct title premiums |
|
$ 524 |
|
$ 524 |
|
$ — |
|
$ — |
|
$ — |
|
Agency title premiums |
|
728 |
|
728 |
|
— |
|
— |
|
— |
|
Escrow, title related and other fees |
|
1,196 |
|
577 |
|
582 |
|
37 |
|
— |
|
Total title and escrow |
|
2,448 |
|
1,829 |
|
582 |
|
37 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and investment income |
|
686 |
|
92 |
|
578 |
|
38 |
|
(22) |
|
Recognized gains and losses, net |
|
(356) |
|
(46) |
|
(309) |
|
(1) |
|
— |
|
Total revenue |
|
2,778 |
|
1,875 |
|
851 |
|
74 |
|
(22) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Personnel costs |
|
734 |
|
654 |
|
58 |
|
22 |
|
— |
|
Agent commissions |
|
564 |
|
564 |
|
— |
|
— |
|
— |
|
Other operating expenses |
|
380 |
|
313 |
|
38 |
|
29 |
|
— |
|
Benefits & other policy reserve changes |
|
292 |
|
— |
|
292 |
|
— |
|
— |
|
Market risk benefit (gains) losses |
|
(49) |
|
— |
|
(49) |
|
— |
|
— |
|
Depreciation and amortization |
|
153 |
|
39 |
|
108 |
|
6 |
|
— |
|
Provision for title claim losses |
|
57 |
|
57 |
|
— |
|
— |
|
— |
|
Interest expense |
|
44 |
|
— |
|
24 |
|
20 |
|
— |
|
Total expenses |
|
2,175 |
|
1,627 |
|
471 |
|
77 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax earnings (loss) |
|
$ 603 |
|
$ 248 |
|
$ 380 |
|
$ (3) |
|
$ (22) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit) |
|
141 |
|
73 |
|
74 |
|
(6) |
|
— |
|
Earnings from equity investments |
|
15 |
|
15 |
|
— |
|
— |
|
— |
|
Non-controlling interests |
|
51 |
|
5 |
|
47 |
|
(1) |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) attributable to common shareholders |
|
$ 426 |
|
$ 185 |
|
$ 259 |
|
$ 4 |
|
$ (22) |
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS attributable to common shareholders - basic |
|
$ 1.58 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS attributable to common shareholders - diluted |
|
$ 1.57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares - basic |
|
270 |
|
|
|
|
|
|
|
|
|
Weighted average shares - diluted |
|
271 |
|
|
|
|
|
|
|
|
|
THIRD QUARTER SEGMENT INFORMATION (In millions, except per share data) (Unaudited) |
||||||||||
|
|
|
Consolidated |
|
Title |
|
F&G |
|
Corporate and |
|
Elimination |
|
Three Months Ended |
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
|
Net earnings (loss) attributable to common shareholders |
|
$ 426 |
|
$ 185 |
|
$ 259 |
|
$ 4 |
|
$ (22) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax earnings (loss) |
|
$ 603 |
|
$ 248 |
|
$ 380 |
|
$ (3) |
|
$ (22) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjustments |
|
|
|
|
|
|
|
|
|
|
|
Recognized (gains) and losses, net |
|
43 |
|
46 |
|
(4) |
|
1 |
|
— |
|
Market related liability adjustments |
|
(237) |
|
— |
|
(237) |
|
— |
|
— |
|
Purchase price amortization |
|
26 |
|
17 |
|
5 |
|
4 |
|
— |
|
Transaction costs |
|
1 |
|
— |
|
1 |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax earnings (loss) |
|
$ 436 |
|
$ 311 |
|
$ 145 |
|
$ 2 |
|
$ (22) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-GAAP, pre-tax adjustments |
|
$ (167) |
|
$ 63 |
|
$ (235) |
|
$ 5 |
|
$ — |
|
Income taxes on non-GAAP adjustments |
|
33 |
|
(15) |
|
49 |
|
(1) |
|
— |
|
Non-controlling interest on non-GAAP adjustments |
|
29 |
|
— |
|
29 |
|
— |
|
— |
|
Deferred tax asset valuation allowance |
|
12 |
|
12 |
|
— |
|
— |
|
— |
|
Total non-GAAP adjustments |
|
$ (93) |
|
$ 60 |
|
$ (157) |
|
$ 4 |
|
$ — |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net earnings (loss) attributable to common shareholders |
|
$ 333 |
|
$ 245 |
|
$ 102 |
|
$ 8 |
|
$ (22) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EPS attributable to common shareholders - diluted |
|
$ 1.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD SEGMENT INFORMATION (In millions, except per share data) (Unaudited) |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
Title |
|
F&G |
|
Corporate and |
|
Elimination |
|
Nine Months Ended |
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
|
Direct title premiums |
|
$ 1,575 |
|
$ 1,575 |
|
$ — |
|
$ — |
|
$ — |
|
Agency title premiums |
|
2,166 |
|
2,166 |
|
— |
|
— |
|
— |
|
Escrow, title related and other fees |
|
3,555 |
|
1,636 |
|
1,772 |
|
147 |
|
— |
|
Total title and escrow |
|
7,296 |
|
5,377 |
|
1,772 |
|
147 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and investment income |
|
2,308 |
|
262 |
|
2,012 |
|
114 |
|
(80) |
|
Recognized gains and losses, net |
|
456 |
|
51 |
|
401 |
|
4 |
|
— |
|
Total revenue |
|
10,060 |
|
5,690 |
|
4,185 |
|
265 |
|
(80) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Personnel costs |
|
2,316 |
|
1,986 |
|
215 |
|
115 |
|
— |
|
Agent commissions |
|
1,681 |
|
1,681 |
|
— |
|
— |
|
— |
|
Other operating expenses |
|
1,152 |
|
924 |
|
149 |
|
79 |
|
— |
|
Benefits & other policy reserve changes |
|
2,864 |
|
— |
|
2,864 |
|
— |
|
— |
|
Market risk benefit (gains) losses |
|
80 |
|
— |
|
80 |
|
— |
|
— |
|
Depreciation and amortization |
|
545 |
|
106 |
|
417 |
|
22 |
|
— |
|
Provision for title claim losses |
|
168 |
|
168 |
|
— |
|
— |
|
— |
|
Interest expense |
|
152 |
|
— |
|
94 |
|
58 |
|
— |
|
Total expenses |
|
8,958 |
|
4,865 |
|
3,819 |
|
274 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax earnings (loss) from continuing operations |
|
$ 1,102 |
|
$ 825 |
|
$ 366 |
|
$ (9) |
|
$ (80) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit) |
|
223 |
|
190 |
|
51 |
|
(18) |
|
— |
|
Earnings (loss) from equity investments |
|
4 |
|
4 |
|
— |
|
— |
|
— |
|
Non-controlling interests |
|
63 |
|
12 |
|
51 |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) attributable to common shareholders |
|
$ 820 |
|
$ 627 |
|
$ 264 |
|
$ 9 |
|
$ (80) |
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS attributable to common shareholders - basic |
|
$ 3.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS attributable to common shareholders - diluted |
|
$ 3.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares - basic |
|
271 |
|
|
|
|
|
|
|
|
|
Weighted average shares - diluted |
|
273 |
|
|
|
|
|
|
|
|
|
YTD SEGMENT INFORMATION (In millions, except per share data) (Unaudited) |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
Title |
|
F&G |
|
Corporate and |
|
Elimination |
|
Nine Months Ended |
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
|
Net earnings (loss) attributable to common shareholders |
|
$ 820 |
|
$ 627 |
|
$ 264 |
|
$ 9 |
|
$ (80) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax earnings (loss) |
|
$ 1,102 |
|
$ 825 |
|
$ 366 |
|
$ (9) |
|
$ (80) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjustments |
|
|
|
|
|
|
|
|
|
|
|
Recognized (gains) and losses, net |
|
5 |
|
(51) |
|
60 |
|
(4) |
|
— |
|
Market related liability adjustments |
|
19 |
|
— |
|
19 |
|
— |
|
— |
|
Purchase price amortization |
|
115 |
|
44 |
|
63 |
|
8 |
|
— |
|
Transaction costs |
|
(2) |
|
— |
|
(3) |
|
1 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax earnings (loss) |
|
$ 1,239 |
|
$ 818 |
|
$ 505 |
|
$ (4) |
|
$ (80) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-GAAP, pre-tax adjustments |
|
$ 137 |
|
$ (7) |
|
$ 139 |
|
$ 5 |
|
$ — |
|
Income taxes on non-GAAP adjustments |
|
(26) |
|
2 |
|
(27) |
|
(1) |
|
— |
|
Deferred tax asset valuation allowance |
|
(7) |
|
(7) |
|
— |
|
— |
|
— |
|
Non-controlling interest on non-GAAP adjustments |
|
(24) |
|
— |
|
(24) |
|
— |
|
— |
|
Total non-GAAP adjustments |
|
$ 80 |
|
$ (12) |
|
$ 88 |
|
$ 4 |
|
$ — |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net earnings (loss) attributable to common shareholders |
|
$ 900 |
|
$ 615 |
|
$ 352 |
|
$ 13 |
|
$ (80) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EPS attributable to common shareholders - diluted |
|
$ 3.30 |
|
|
|
|
|
|
|
|
|
YTD SEGMENT INFORMATION (In millions, except per share data) (Unaudited) |
||||||||||
|
|
|
|
|
|
|
F&G |
|
|
|
|
|
Nine Months Ended |
|
Consolidated |
|
Title |
|
|
Corporate and |
|
Elimination |
|
|
|
|
|
|
|
|
|||||
|
Direct title premiums |
|
$ 1,493 |
|
$ 1,493 |
|
$ — |
|
$ — |
|
$ — |
|
Agency title premiums |
|
1,991 |
|
1,991 |
|
— |
|
— |
|
— |
|
Escrow, title related and other fees |
|
3,288 |
|
1,629 |
|
1,523 |
|
136 |
|
— |
|
Total title and escrow |
|
6,772 |
|
5,113 |
|
1,523 |
|
136 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and investment income |
|
1,915 |
|
252 |
|
1,622 |
|
84 |
|
(43) |
|
Recognized gains and losses, net |
|
(367) |
|
(74) |
|
(257) |
|
(36) |
|
— |
|
Total revenue |
|
8,320 |
|
5,291 |
|
2,888 |
|
184 |
|
(43) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Personnel costs |
|
2,166 |
|
1,908 |
|
167 |
|
91 |
|
— |
|
Agent commissions |
|
1,534 |
|
1,534 |
|
— |
|
— |
|
— |
|
Other operating expenses |
|
1,134 |
|
939 |
|
107 |
|
88 |
|
— |
|
Benefits & other policy reserve changes |
|
1,921 |
|
— |
|
1,921 |
|
— |
|
— |
|
Market risk benefit (gains) losses |
|
(20) |
|
— |
|
(20) |
|
— |
|
— |
|
Depreciation and amortization |
|
438 |
|
115 |
|
302 |
|
21 |
|
— |
|
Provision for title claim losses |
|
157 |
|
157 |
|
— |
|
— |
|
— |
|
Interest expense |
|
129 |
|
— |
|
71 |
|
58 |
|
— |
|
Total expenses |
|
7,459 |
|
4,653 |
|
2,548 |
|
258 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax earnings (loss) |
|
$ 861 |
|
$ 638 |
|
$ 340 |
|
$ (74) |
|
$ (43) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit) |
|
245 |
|
165 |
|
99 |
|
(19) |
|
— |
|
Earnings from equity investments |
|
16 |
|
16 |
|
— |
|
— |
|
— |
|
Non-controlling interests |
|
46 |
|
11 |
|
36 |
|
(1) |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) attributable to common shareholders |
|
$ 586 |
|
$ 478 |
|
$ 205 |
|
$ (54) |
|
$ (43) |
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS attributable to common shareholders - basic |
|
$ 2.17 |
|
|
|
|
|
|
|
|
|
EPS attributable to common shareholders - diluted |
|
$ 2.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares - basic |
|
270 |
|
|
|
|
|
|
|
|
|
Weighted average shares - diluted |
|
271 |
|
|
|
|
|
|
|
|
|
YTD SEGMENT INFORMATION (In millions, except per share data) (Unaudited) |
||||||||||
|
|
|
Consolidated |
|
Title |
|
F&G |
|
Corporate and |
|
Elimination |
|
Nine Months Ended |
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
|
Net earnings (loss) attributable to common shareholders |
|
$ 586 |
|
$ 478 |
|
$ 205 |
|
$ (54) |
|
$ (43) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax earnings (loss) |
|
$ 861 |
|
$ 638 |
|
$ 340 |
|
$ (74) |
|
$ (43) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjustments |
|
|
|
|
|
|
|
|
|
|
|
Recognized (gains) and losses, net |
|
210 |
|
74 |
|
100 |
|
36 |
|
— |
|
Market related liability adjustments |
|
(95) |
|
— |
|
(95) |
|
— |
|
— |
|
Purchase price amortization |
|
81 |
|
54 |
|
16 |
|
11 |
|
— |
|
Transaction costs |
|
8 |
|
— |
|
3 |
|
5 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax earnings (loss) |
|
$ 1,065 |
|
$ 766 |
|
$ 364 |
|
$ (22) |
|
$ (43) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-GAAP, pre-tax adjustments |
|
$ 204 |
|
$ 128 |
|
$ 24 |
|
$ 52 |
|
$ — |
|
Income taxes on non-GAAP adjustments |
|
(48) |
|
(31) |
|
(5) |
|
(12) |
|
— |
|
Deferred tax asset valuation allowance |
|
19 |
|
11 |
|
— |
|
8 |
|
— |
|
Non-controlling interest on non-GAAP adjustments |
|
(3) |
|
— |
|
(3) |
|
— |
|
— |
|
Total non-GAAP adjustments |
|
$ 172 |
|
$ 108 |
|
$ 16 |
|
$ 48 |
|
$ — |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net earnings (loss) attributable to common shareholders |
|
$ 758 |
|
$ 586 |
|
$ 221 |
|
$ (6) |
|
$ (43) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EPS attributable to common shareholders - diluted |
|
$ 2.80 |
|
|
|
|
|
|
|
|
|
SUMMARY BALANCE SHEET INFORMATION (In millions) |
||||||
|
|
||||||
|
|
|
|
|
|
||
|
|
|
(Unaudited) |
|
(Unaudited) |
||
|
Cash and investment portfolio |
|
|
$ 67,957 |
|
|
$ 58,816 |
|
|
|
|
5,272 |
|
|
4,830 |
|
Title plant |
|
|
422 |
|
|
418 |
|
Total assets |
|
|
94,672 |
|
|
80,614 |
|
Notes payable |
|
|
4,186 |
|
|
3,887 |
|
Reserve for title claim losses |
|
|
1,720 |
|
|
1,770 |
|
Secured trust deposits |
|
|
766 |
|
|
731 |
|
Accumulated other comprehensive (loss) earnings |
|
|
(1,423) |
|
|
(2,119) |
|
Non-controlling interests |
|
|
820 |
|
|
552 |
|
Total equity and non-controlling interests |
|
|
8,902 |
|
|
7,460 |
|
Total equity attributable to common shareholders |
|
|
8,082 |
|
|
6,908 |
Non-GAAP Measures and Other Information
Title Segment
The table below reconciles pre-tax title earnings to adjusted pre-tax title earnings.
|
|
Three Months Ended |
|
|
Nine Months Ended |
||
|
(Dollars in millions) |
|
|
|
|
|
|
|
Pre-tax earnings |
$ 372 |
$ 248 |
|
|
$ 825 |
$ 638 |
|
Non-GAAP adjustments before taxes |
|
|
|
|
|
|
|
Recognized (gains) and losses, net |
(63) |
46 |
|
|
(51) |
74 |
|
Purchase price amortization |
14 |
17 |
|
|
44 |
54 |
|
Total non-GAAP adjustments |
(49) |
63 |
|
|
(7) |
128 |
|
Adjusted pre-tax earnings |
$ 323 |
$ 311 |
|
|
$ 818 |
$ 766 |
|
Adjusted pre-tax margin |
15.9 % |
16.2 % |
|
|
14.5 % |
14.3 % |
|
QUARTERLY OPERATING STATISTICS (Unaudited) |
||||||||||||||||
|
|
||||||||||||||||
|
|
|
Q3 2024 |
|
Q2 2024 |
|
Q1 2024 |
|
Q4 2023 |
|
Q3 2023 |
|
Q2 2023 |
|
Q1 2023 |
|
Q4 2022 |
|
Quarterly Opened Orders ('000's except % data) |
||||||||||||||||
|
Total opened orders* |
|
352 |
|
344 |
|
315 |
|
257 |
|
318 |
|
347 |
|
308 |
|
266 |
|
Total opened orders per day* |
|
5.5 |
|
5.5 |
|
5.1 |
|
4.1 |
|
5.0 |
|
5.4 |
|
5.0 |
|
4.3 |
|
Purchase % of opened orders |
|
73 % |
|
80 % |
|
79 % |
|
78 % |
|
80 % |
|
79 % |
|
78 % |
|
76 % |
|
Refinance % of opened orders |
|
27 % |
|
20 % |
|
21 % |
|
22 % |
|
20 % |
|
21 % |
|
22 % |
|
24 % |
|
Total closed orders* |
|
232 |
|
229 |
|
186 |
|
192 |
|
224 |
|
233 |
|
188 |
|
216 |
|
Total closed orders per day* |
|
3.6 |
|
3.6 |
|
3.0 |
|
3.1 |
|
3.6 |
|
3.6 |
|
3.0 |
|
3.5 |
|
Purchase % of closed orders |
|
77 % |
|
81 % |
|
79 % |
|
80 % |
|
80 % |
|
81 % |
|
78 % |
|
76 % |
|
Refinance % of closed orders |
|
23 % |
|
19 % |
|
21 % |
|
20 % |
|
20 % |
|
19 % |
|
22 % |
|
24 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial (millions, except orders in '000's) |
||||||||||||||||
|
Total commercial revenue |
|
$ 290 |
|
$ 273 |
|
$ 238 |
|
$ 294 |
|
$ 263 |
|
$ 263 |
|
$ 241 |
|
$ 344 |
|
Total commercial opened orders |
|
50.8 |
|
50.7 |
|
48.7 |
|
43.7 |
|
49.1 |
|
50.2 |
|
48.5 |
|
44.9 |
|
Total commercial closed orders |
|
25.9 |
|
25.7 |
|
24.3 |
|
26.3 |
|
25.6 |
|
27.7 |
|
24.7 |
|
30.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
National commercial revenue |
|
$ 151 |
|
$ 145 |
|
$ 123 |
|
$ 164 |
|
$ 131 |
|
$ 132 |
|
$ 123 |
|
$ 177 |
|
National commercial opened orders |
|
21.9 |
|
21.4 |
|
19.4 |
|
18.2 |
|
19.2 |
|
19.5 |
|
18.8 |
|
17.8 |
|
National commercial closed orders |
|
10.4 |
|
9.8 |
|
9.2 |
|
10.1 |
|
9.4 |
|
10.1 |
|
8.7 |
|
11.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
||||||||||||||||
|
Fee per file |
|
$ 3,708 |
|
$ 3,759 |
|
$ 3,555 |
|
$ 3,806 |
|
$ 3,618 |
|
$ 3,598 |
|
$ 3,446 |
|
$ 3,649 |
|
Residential fee per file |
|
$ 2,881 |
|
$ 2,995 |
|
$ 2,746 |
|
$ 2,889 |
|
$ 2,861 |
|
$ 2,897 |
|
$ 2,601 |
|
$ 2,542 |
|
Total commercial fee per file |
|
|
|
$ 10,600 |
|
$ 9,800 |
|
$ 11,200 |
|
|
|
$ 9,500 |
|
$ 9,800 |
|
$ 11,300 |
|
National commercial fee per file |
|
|
|
$ 14,800 |
|
|
|
$ 16,300 |
|
|
|
$ 13,000 |
|
$ 14,100 |
|
$ 14,900 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Staffing |
||||||||||||||||
|
Total field operations employees |
|
10,400 |
|
10,300 |
|
10,000 |
|
9,900 |
|
10,400 |
|
10,600 |
|
10,400 |
|
10,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual title claims paid ($ millions) |
|
$ 64 |
|
$ 70 |
|
$ 70 |
|
$ 64 |
|
$ 69 |
|
$ 67 |
|
$ 62 |
|
$ 79 |
Title Segment (continued)
|
MONTHLY TITLE ORDER STATISTICS |
||||||||
|
|
||||||||
|
|
|
|
Direct Orders Opened * |
|
|
Direct Orders Closed * |
||
|
Month |
|
/ (% Purchase) |
|
/ (% Purchase) |
||||
|
|
|
|
115,000 |
78 % |
|
|
79,000 |
80 % |
|
|
|
|
117,000 |
73 % |
|
|
79,000 |
78 % |
|
|
|
|
120,000 |
68 % |
|
|
74,000 |
74 % |
|
|
|
|
|
|
|
|
||
|
Third Quarter 2024 |
|
|
352,000 |
73 % |
|
|
232,000 |
77 % |
|
|
|
|
|
|
|
|
||
|
|
|
|
Direct Orders Opened * |
|
|
Direct Orders Closed * |
||
|
Month |
|
/ (% Purchase) |
|
|
/ (% Purchase) |
|||
|
|
|
|
107,000 |
80 % |
|
|
74,000 |
81 % |
|
|
|
|
114,000 |
79 % |
|
|
80,000 |
80 % |
|
|
|
|
97,000 |
79 % |
|
|
70,000 |
80 % |
|
|
|
|
|
|
|
|
||
|
Third Quarter 2023 |
|
|
318,000 |
80 % |
|
|
224,000 |
80 % |
|
* Includes an immaterial number of non-purchase and non-refinance orders |
||||||||
F&G Segment
The table below reconciles net earnings (loss) attributable to common shareholders to adjusted net earnings attributable to common shareholders. The F&G Segment is reported net of noncontrolling minority interest.
|
|
Three Months Ended |
|
|
Nine Months Ended |
||||
|
(Dollars in millions) |
|
|
|
|
|
|
|
|
|
Net earnings attributable to common shareholders |
$ (5) |
|
$ 259 |
|
|
$ 264 |
|
$ 205 |
|
Non-GAAP adjustments(1): |
|
|
|
|
|
|
|
|
|
Recognized (gains) losses, net |
46 |
|
(4) |
|
|
60 |
|
100 |
|
Market related liability adjustments |
145 |
|
(237) |
|
|
19 |
|
(95) |
|
Purchase price amortization |
22 |
|
5 |
|
|
63 |
|
16 |
|
Transaction costs |
— |
|
1 |
|
|
(3) |
|
3 |
|
Income taxes on non-GAAP adjustments |
(44) |
|
49 |
|
|
(27) |
|
(5) |
|
Non-controlling interest on non-GAAP adjustments |
(29) |
|
29 |
|
|
(24) |
|
(3) |
|
Adjusted net earnings (loss) attributable to common shareholders(1) |
$ 135 |
|
$ 102 |
|
|
$ 352 |
|
$ 221 |
-
Adjusted net earnings of
$135 million for the third quarter of 2024 include$111 million , or$0.40 per share, of investment income from alternative investments,$18 million , or$0.07 per share, of CLO redemption gains and bond prepay income, and$12 million , or$0.04 per share, of tax valuation allowance benefit; partially offset by$14 million , or$0.05 per share, of net expense from actuarial assumption updates. Alternative investments investment income based on management's long-term expected return of approximately 10% was$146 million , or$0.53 per share. -
Adjusted net earnings of
$102 million for the third quarter of 2023 included$97 million , or$0.36 per share, of investment income from alternative investments. Alternative investments investment income based on management's long-term expected return of approximately 10% was$121 million , or$0.45 per share. -
Adjusted net earnings of
$352 million for the nine months endedSeptember 30, 2024 include$317 million , or$1.16 per share, of investment income from alternative investments,$26 million or$0.10 per share of CLO redemption gains and bond prepay income, and$12 million , or$0.04 per share of tax valuation allowance benefit; partially offset by$27 million , or$0.10 per share, of net expense from actuarial assumption and model updates. Alternative investments investment income based on management's long-term expected return of approximately 10% was$413 million , or$1.51 per share. -
Adjusted net earnings of
$221 million for the nine months endedSeptember 30, 2023 included$249 million , or$0.92 per share, of investment income from alternative investments and$4 million , or$0.01 per share, of bond prepay income, partially offset by$31 million , or$0.11 per share, tax valuation allowance expense. Alternative investments investment income based on management's long-term expected return of approximately 10% was$348 million , or$1.28 per share.
|
Footnotes: |
|
|
1. |
Non-GAAP financial measure. See the Non-GAAP Measures section below for additional information. |
The table below provides a summary of sales highlights.
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
||||
|
(In millions) |
|
|
|
|
|
|
|
|
|
|
Total annuity sales |
|
$ 3,502 |
|
$ 1,858 |
|
|
$ 9,389 |
|
$ 6,870 |
|
Indexed universal life sales |
|
39 |
|
38 |
|
|
125 |
|
117 |
|
Funding agreements (FABN/FHLB) |
|
— |
|
415 |
|
|
1,020 |
|
871 |
|
Pension risk transfer |
|
337 |
|
470 |
|
|
1,259 |
|
1,212 |
|
Gross sales(1) |
|
$ 3,878 |
|
$ 2,781 |
|
|
$ 11,793 |
|
$ 9,070 |
|
Sales attributable to flow reinsurance to third parties |
|
(1,492) |
|
(513) |
|
|
(3,660) |
|
(2,381) |
|
|
|
$ 2,386 |
|
$ 2,268 |
|
|
$ 8,133 |
|
$ 6,689 |
|
Footnotes: |
|
|
1. |
Non-GAAP financial measure. See the Non-GAAP Measures section below for additional information. |
DEFINITIONS
The following represents the definitions of non-GAAP measures used by the Company.
Adjusted Net Earnings attributable to common shareholders
Adjusted net earnings attributable to common shareholders is a non-GAAP economic measure we use to evaluate financial performance each period. Adjusted net earnings attributable to common shareholders is calculated by adjusting net earnings (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. Certain income tax adjustments: the impacts related to unusual tax items that do not reflect our core operating performance such as the establishment or reversal of significant deferred tax asset valuation allowances in our Title and Corporate and Other segments;
vi. Other "non-recurring," "infrequent" or "unusual items": Management excludes certain items determined to be "non-recurring," "infrequent" or "unusual" from adjusted net earnings when incurred if it is determined these expenses 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;
vii. Non-controlling interest on non-GAAP adjustments: the portion of the non-GAAP adjustments attributable to the equity interest of entities that FNF does not wholly own; and
viii. Income taxes: the income tax impact related to the above-mentioned 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. 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.
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 Flow Reinsurance
AUM before Flow Reinsurance is comprised of components consistent with AUM, but also includes flow 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)
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.
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.
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