Fidelity & Guaranty Life

CIK:0001585064|SEC Filings

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2015
Revenues:
Premiums	$ 42	$ 70	$ 58
Net investment income	1,005	923	851
Net investment gains (losses)	316	19	(37)
Insurance and investment product fees and other	167	127	89
Total revenues	1,530	1,139	961
Benefits and expenses:
Benefits and other changes in policy reserves	843	791	578
Acquisition and operating expenses, net of deferrals	137	119	113
Amortization of intangibles	193	54	64
Total benefits and expenses	1,173	964	755
Operating income	357	175	206
Interest expense	(24)	(22)	(24)
Income before income taxes	333	153	182
Income tax expense	(110)	(56)	(64)
Net income	$ 223	$ 97	$ 118
Net income per common share - adjusted to reflect stock split:
Basic (in USD per share)	$ 3.83	$ 1.67	$ 2.03
Diluted (in USD per share)	$ 3.83	$ 1.66	$ 2.02
Weighted average common shares used in computing net income per common share:
Basic (in shares)	58,319,517	58,275,013	58,117,884
Diluted (in shares)	58,415,187	58,578,163	58,360,841
Cash dividend per common share (in dollars per share)	$ 0.260	$ 0.260	$ 0.260
Total other-than-temporary impairments	$ (22)	$ (45)	$ (82)
Portion of other-than-temporary impairments included in other comprehensive income	0	(1)	0
Net other-than-temporary impairments	(22)	(44)	(82)
Gains (losses) on derivatives and embedded derivatives	335	33	(8)
Other investment gains	3	30	53
Net investment gains (losses)	$ 316	$ 19	$ (37)

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net income	$ 223	$ 97	$ 118
Adjustments to reconcile net income to net cash provided by operating activities:
Stock based compensation	6	8	7
Amortization	(42)	(40)	(60)
Deferred income taxes	(4)	51	50
Interest credited/index credits to contractholder account balances	701	632	420
Net recognized (gains) losses on investments and derivatives	(305)	(19)	37
Charges assessed to contractholders for mortality and administration	(131)	(103)	(68)
Deferred policy acquisition costs, net of related amortization	(144)	(296)	(253)
Changes in operating assets and liabilities:
Reinsurance recoverable	(18)	(2)	46
Future policy benefits	(55)	(1)	(36)
Funds withheld from reinsurers	(105)	(89)	(62)
Collateral posted (returned)	158	111	(128)
Other assets and other liabilities	(47)	16	(36)
Net cash provided by operating activities	237	365	35
Cash flows from investing activities:
Proceeds from commercial mortgage loans	48	35	139
Costs of commercial mortgage loans	0	(99)	(535)
Related party loans	0	1	35
Capital expenditures	(4)	(8)	(7)
Net cash (used in) investing activities	(1,217)	(1,186)	(1,024)
Cash flows from financing activities:
Treasury stock	(1)	(1)	(11)
Common stock issued under employee plans	0	2	2
Draw on revolving credit facility	5	100	0
Dividends paid	(15)	(15)	(15)
Contractholder account deposits	2,890	2,780	2,503
Contractholder account withdrawals	(1,878)	(1,683)	(1,564)
Net cash provided by financing activities	1,001	1,183	915
Change in cash & cash equivalents	21	362	(74)
Cash & cash equivalents, beginning of period	864	502	576
Cash & cash equivalents, end of period	885	864	502
Supplemental disclosures of cash flow information:
Interest paid	23	19	19
Income taxes paid	114	7	38
Deferred sales inducements	20	27	26
Available-for-sale Securities
Cash flows from investing activities:
Proceeds from available-for-sale investments, sold, matured or repaid:	2,755	2,264	4,947
Cost of available-for-sale investments:	(4,123)	(3,359)	(5,746)
Derivative and other
Cash flows from investing activities:
Proceeds from available-for-sale investments, sold, matured or repaid:	458	246	439
Cost of available-for-sale investments:	$ (351)	$ (266)	$ (296)

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Sep. 30, 2017	Sep. 30, 2016
Investments:
Fixed maturity securities, available-for-sale, at fair value (amortized cost: September 30, 2017 - $20,063; September 30, 2016 - $18,521)	$ 21,154	$ 19,411
Equity securities, available-for-sale, at fair value (amortized cost: September 30, 2017 - $733; September 30, 2016 - $640)	773	683
Derivative investments	413	276
Loans and Leases Receivable, Net Amount	547	595
Other invested assets	185	60
Total investments	23,072	21,025
Related party loans	71	71
Cash and cash equivalents	885	864
Accrued investment income	231	214
Reinsurance recoverable	3,375	3,464
Intangibles, net	1,129	1,026
Deferred tax assets, net	0	0
Other assets	202	371
Total assets	28,965	27,035
LIABILITIES AND SHAREHOLDERS' EQUITY
Contractholder funds	20,792	19,251
Future policy benefits	3,412	3,467
Funds withheld for reinsurance liabilities	1,083	1,172
Liability for policy and contract claims	67	55
Debt	300	300
Revolving credit facility	105	100
Deferred tax liability, net	62	10
Other liabilities	897	746
Total liabilities	26,718	25,101
Commitments and contingencies (Note 12)
Shareholders' equity:
Preferred stock ($.01 par value, 50,000,000 shares authorized, no shares issued at September 30, 2017 and September 30, 2016)	0	0
Common stock ($.01 par value, 500,000,000 shares authorized, 58,933,415 issued and outstanding at September 30, 2017; 58,956,127 shares issued and outstanding at September 30, 2016)	1	1
Additional paid-in capital	716	714
Retained earnings	1,000	792
Accumulated other comprehensive income	543	439
Treasury stock, at cost (568,847 shares at September 30, 2017; 537,613 shares at September 30, 2016)	(13)	(12)
Total shareholders' equity	2,247	1,934
Total liabilities and shareholders' equity	28,965	27,035
Commercial Portfolio Segment [Member]
Investments:
Loans and Leases Receivable, Net Amount	$ 547	$ 595