PR Newswire | Feb 24, 2021 04:10PM EST

and Adjusted Diluted EPS from Continuing Operations of $2.01, Pre-Tax Title Margin of 29.4% and Adjusted Pre-Tax Title Margin of 22.7%

02/24 15:10 CST

FNF Reports Fourth Quarter 2020 Diluted EPS from Continuing Operations of $2.74 and Adjusted Diluted EPS from Continuing Operations of $2.01, Pre-Tax Title Margin of 29.4% and Adjusted Pre-Tax Title Margin of 22.7% JACKSONVILLE, Fla., Feb. 24, 2021

JACKSONVILLE, Fla., Feb. 24, 2021 /PRNewswire/ -- Fidelity National Financial, Inc. (NYSE:FNF), a leading provider of title insurance and transaction services to the real estate and mortgage industries, today reported operating results for the period ended December 31, 2020.

* Total revenue of approximately $3.8 billion in the fourth quarter versus $2.4 billion in the fourth quarter of 2019 * Fourth quarter net earnings from continuing operations of $803 million and adjusted net earnings from continuing operations of $588 million versus net earnings of $340 million and adjusted net earnings of $263 million for the fourth quarter of 2019 * Fourth quarter diluted EPS from continuing operations of $2.74 and adjusted diluted EPS from continuing operations of $2.01 versus diluted EPS of $1.22 and adjusted diluted EPS of $0.95 in the fourth quarter of 2019 * Recognized gains were $573 million in the fourth quarter versus recognized gains of $131 million in the fourth quarter of 2019 primarily due to mark to market accounting treatment of equity and preferred stock securities whether the securities were disposed of in the quarter or continue to be held in our investment portfolio

Title

* Total revenue of approximately $3.0 billion versus approximately $2.3 billion in total revenue in the fourth quarter of 2019 * Total revenue, excluding recognized gains and losses, of approximately $2.8 billion versus approximately $2.2 billion in the fourth quarter of 2019, an increase of 26.6% * Pre-tax earnings of $896 million and adjusted pre-tax earnings of $624 million versus pre-tax earnings of $468 million and adjusted pre-tax earnings of $355 million in the fourth quarter of 2019 * Pre-tax title margin of 29.4% and adjusted pre-tax title margin of 22.7% versus pre-tax title margin of 20.3% and adjusted pre-tax title margin of 16.3% in the fourth quarter of 2019 * Fourth quarter refinance orders opened increased 90% on a daily basis and refinance orders closed increased 86% on a daily basis versus the fourth quarter of 2019; purchase orders opened increased 14% on a daily basis and purchase orders closed increased 18% on a daily basis versus the fourth quarter of 2019 * Total commercial revenue of $322 million, a 0.3% increase versus total commercial revenue in the fourth quarter of 2019, driven by a 1% increase in closed orders; fourth quarter total commercial orders opened increased 3% compared to the prior year * Overall fourth quarter average fee per file of $2,116, an 11% decrease versus the fourth quarter of 2019

Title Orders

Direct Orders Opened * Direct Orders Closed *

Month / (% Purchase) / (% Purchase)

October 2020 259,000 40% 210,000 39%

November 2020 227,000 38% 190,000 37%

December 2020 242,000 35% 217,000 38%



Fourth Quarter 2020 728,000 38% 617,000 38%

Direct Orders Opened * Direct Orders Closed *

Month / (% Purchase) / (% Purchase)

October 2019 195,000 50% 153,000 48%

November 2019 157,000 49% 127,000 49%

December 2019 140,000 51% 137,000 50%



Fourth Quarter 2019 492,000 50% 417,000 49%

* Includes an immaterial number of non-purchase and non-refinance orders

F&GF&G, a leading provider of annuities and life insurance, reported operating results for the fourth quarter of 2020. As a result of acquisition accounting (purchase accounting or PGAAP), financial results for periods after June 1, 2020 are generally not comparable to the results of prior periods. Certain metrics, such as sales and policyholder account values, are not affected by PGAAP and are comparable to prior period data.

* Total Retail Annuity Sales of $1,309 million in the fourth quarter, an increase of 42 percent to the prior year, and an increase of 23 percent from the sequential quarter * Fixed Indexed Annuities (FIA) Sales of $947 million in the fourth quarter, an increase of 19 percent to the prior year, and an increase of 16 percent from the sequential quarter * Average Assets Under Management (AAUM) of $27.9 billion for the fourth quarter, up from $27.0 billion in the sequential period driven by net new business asset flows * Net Investment Spread: FIA spread for the fourth quarter of 302 basis points; Total Spread, including all product lines, for the fourth quarter of 255 basis points * Net Earnings Attributable to Common Shareholders of $137 million for the fourth quarter, including a $2 million loss from discontinued operations and $11 million net favorable mark-to-market and other items which are excluded from Adjusted Net Earnings * Adjusted Net Earnings From Continuing Operations Attributable to Common Shareholders of $128 million for the quarter, including $68 million of net favorable notable items

William P. Foley, II, Chairman, commented, "I am very proud of our team as they navigated a challenging environment and delivered record results for both the fourth quarter and full-year 2020 in our Title business. We generated adjusted pre-tax title earnings of $624 million and an adjusted pre-tax title margin of 22.7% as refinance and purchase orders opened remained strong through the fourth quarter of 2020. We continued to see a rebound in commercial real estate activity as total commercial orders opened increased 3% in the quarter as compared to the year ago fourth quarter.

We also made significant headway on our technology investments in our Title business having recently announced both the inHere Experience Platform and, subsequently, Close inHere. The inHere platform transforms the overall experience of buying, selling, and refinancing a home by helping to enhance the safety and simplicity needed to start, track, notarize, and close the transaction. While we continue to drive innovation in the Title industry, we believe our significant national footprint will prove to be a real plus as further adoption of our client facing and title automation technology expands our competitive advantage.

Turning to F&G, the Company continues to execute on its growth strategy and generated retail sales growth of over 40% in the fourth quarter. The credit rating upgrade that F&G has enjoyed as a result of the acquisition by FNF has opened additional large market opportunities. F&G is gaining momentum in the newly entered bank and broker dealer channel, generating $500 million of channel sales since their launch on July 1st. Expansion into institutional products, including the pension risk transfer market, will also be an area of strategic focus for F&G in 2021. We expect F&G's next phase of growth to benefit from leveraging FNF's expertise in capital allocation, value creation and strategic oversight."

Mr. Foley concluded, "Finally, we will remain focused on maintaining a balanced capital allocation strategy centered on returning capital to shareholders while investing in the business to drive growth. In the fourth quarter, our Board approved a 9.0% increase in our quarterly cash dividend to $0.36 per share and announced a plan targeting $500 million of share repurchases, based on market conditions over the course of the following twelve months. During the quarter we repurchased 3.8 million shares at an average purchase price of $36.77 per share."

Conference CallWe will host a call with investors and analysts to discuss fourth quarter 2020 FNF results on Thursday, February 25, 2021, beginning at 12:00 p.m. Eastern Time. A live webcast of the conference call will be available on the Events and Multimedia page of the FNF Investor Relations website at fnf.com. The conference call replay will be available via webcast through the FNF Investor Relations website at fnf.com. The telephone replay will be available from 3:00 p.m. Eastern Time on February 25, 2021, through March 4, 2021, by dialing 1-844-512-2921 (USA) or 1-412-317-6671 (International). The access code will be 13715589. An expanded quarterly financial supplement providing segment results is available on the FNF Investor Relations website.

About Fidelity National Financial, Inc.Fidelity National Financial, Inc. (NYSE: FNF) is a leading provider of title insurance and transaction services to the real estate and mortgage industries. FNF is the nation's largest title insurance company through its title insurance underwriters - Fidelity National Title, Chicago Title, Commonwealth Land Title, Alamo Title and National Title of New York - that collectively issue more title insurance policies than any other title company in the United States. More information about FNF can be found at fnf.com.

About F&GF&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 annuity and life insurance products and is headquartered in Des Moines, Iowa. For more information, please visit www.fglife.bm.

Use of Non-GAAP Financial InformationGenerally 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, FNF has provided non-GAAP financial measures, which it 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, adjusted 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), F&G adjusted earnings, F&G adjusted earnings attributable to common shareholders, F&G adjusted operating return on common shareholders' equity excluding AOCI, F&G net investment spread, F&G average assets under management and F&G sales.

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. Further, FNF's non-GAAP measures may be calculated differently from similarly titled measures of other companies. Reconciliations of these non-GAAP measures to related GAAP measures are provided below.

Forward-Looking Statements and Risk FactorsThis 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: the ability of FNF to successfully integrate F&G's operations and employees; the potential impact of the announcement or consummation of the proposed F&G transaction on relationships, including with employees, suppliers, customers and competitors; changes in general economic, business, political and COVID-19 conditions, including changes in the financial markets; 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 U. S. economy; our potential inability to find suitable acquisition candidates; our dependence on distributions from our title insurance underwriters as a main source of cash flow; significant competition that F&G and our operating subsidiaries face; compliance with extensive government regulation of our operating subsidiaries; and other risks detailed in the "Statement Regarding Forward-Looking Information," "Risk Factors" and other sections of FNF's Form 10-K and other filings with the Securities and Exchange Commission ("SEC").

FNF-E

FIDELITY NATIONAL FINANCIAL, INC. FOURTH QUARTER SEGMENT INFORMATION (In millions, except order information in thousands) (Unaudited)



Corporate andThree Months Ended ConsolidatedTitle F&G Other December 31, 2020

Direct title premiums $845 $845$- $-

Agency title premiums 1,102 1,102- -

Escrow, title related and other fees 891 775 58 58

Total title and escrow 2,838 2,72258 58



Interest and investment income 359 31 327 1

Recognized gains and losses, net 573 290 282 1

Total revenue 3,770 3,043667 60



Personnel costs 863 786 33 44

Agent commissions 842 842 - -

Other operating expenses 453 396 30 27

Benefits & other policy reserve changes 460 - 460 -

Depreciation and amortization 107 36 64 7

Claim loss expense 87 87 - -

Interest expense 28 - 8 20

Total expenses 2,840 2,147595 98



Pre-tax earnings (loss) from continuing operations $930 $896$72 $(38)



Income tax expense (benefit) 128 192 (67) 3

Earnings (loss) from equity investments 6 6 - -

Loss from discontinued operations, net of tax (2) - (2) -

Non-controlling interests 5 5 - -



Net earnings (loss) attributable to common shareholders$801 $705$137$(41)



EPS from continuing operations attributable to common $2.75 shareholders - basic

EPS from discontinued operations attributable to common(0.01) shareholders - basic

EPS attributable to common shareholders - basic $2.74



EPS from continuing operations attributable to common $2.74 shareholders - diluted

EPS from discontinued operations attributable to common(0.01) shareholders - diluted

EPS attributable to common shareholders - diluted $2.73



Weighted average shares - basic 292

Weighted average shares - diluted 293

FIDELITY NATIONAL FINANCIAL, INC. FOURTH QUARTER SEGMENT INFORMATION (In millions, except order information in thousands) (Unaudited)



Corporate andThree Months Ended ConsolidatedTitle F&G Other December 31, 2020

Net earnings (loss) attributable to common shareholders $801 $705 $137 $(41)



Loss from discontinued operations, net of tax (2) - (2) -



Net earnings (loss) from continuing operations attributable $803 $705 $139 $(41) to common shareholders



Pre-tax earnings (loss) from continuing operations $930 $896 $72 $(38)



Non-GAAP Adjustments

Recognized (gains) and losses, net (367) (290) (76) (1)

Indexed product related derivatives 54 - 54 -

Purchase price amortization 29 18 7 4

Transaction costs 5 - 4 1



Adjusted pre-tax earnings (loss) $651 $624 $61 $(34)



Total non-GAAP, pre-tax adjustments $(279) $(272)$(11) $4

Income taxes on non-GAAP adjustments 64 65 - (1)

Total non-GAAP adjustments $(215) $(207)$(11) $3



Adjusted net earnings (loss) from continuing operations attributable$588 $498 $128 $(38) to common shareholders



Adjusted EPS from continuing operations attributable to common $2.01 shareholders - diluted

FIDELITY NATIONAL FINANCIAL, INC. FOURTH QUARTER SEGMENT INFORMATION (In millions, except order information in thousands) (Unaudited)



Corporate andThree Months Ended ConsolidatedTitle Other December 31, 2019

Direct title premiums $656 $656$-

Agency title premiums 828 828 -

Escrow, title related and other fees 692 642 50

Total title and escrow 2,176 2,12650



Interest and investment income 55 49 6

Recognized gains and losses, net 131 135 (4)

Total revenue 2,362 2,31052



Personnel costs 717 681 36

Agent commissions 628 628 -

Other operating expenses 455 428 27

Depreciation and amortization 46 39 7

Claim loss expense 66 66 -

Interest expense 11 - 11

Total expenses 1,923 1,84281



Pre-tax earnings (loss) $439 $468$(29)



Income tax expense (benefit) 98 103 (5)

Earnings from equity investments 3 2 1

Non-controlling interests 4 5 (1)



Net earnings (loss) attributable to common shareholders$340 $362$(22)



EPS attributable to common shareholders - basic $1.24

EPS attributable to common shareholders - diluted $1.22



Weighted average shares - basic 274

Weighted average shares - diluted 278

FIDELITY NATIONAL FINANCIAL, INC. FOURTH QUARTER SEGMENT INFORMATION (In millions, except order information in thousands) (Unaudited)



Corporate andThree Months Ended ConsolidatedTitle Other December 31, 2019

Net earnings (loss) attributable to common shareholders $340 $362 $(22)



Pre-tax earnings (loss) $439 $468 $(29)



Non-GAAP Adjustments

Recognized (gains) and losses, net (131) (135) 4

Purchase price amortization 27 22 5

Transaction costs - - -

Severance costs 6 0 6



Adjusted pre-tax earnings (loss) $341 $355 $(14)



Total non-GAAP, pre-tax adjustments $(104) $(113)$9

Income taxes on non-GAAP adjustments 24 28 (4)

Non-controlling interest on non-GAAP adjustments (3) (3) -

Total non-GAAP adjustments $(83) $(88) $5



Adjusted net earnings attributable to common shareholders $263 $274 $(11)



Adjusted EPS attributable to common shareholders - diluted$0.95

FIDELITY NATIONAL FINANCIAL, INC. YTD SEGMENT INFORMATION (In millions, except order information in thousands) (Unaudited)



Corporate andTwelve Months Ended ConsolidatedTitle F&G Other December 31, 2020

Direct title premiums $2,699 $2,699$- $-

Agency title premiums 3,599 3,599 - -

Escrow, title related and other fees 3,092 2,782 138 172

Total title and escrow 9,390 9,080 138 172



Interest and investment income 900 151 743 6

Recognized gains and losses, net 488 143 352 (7)

Total revenue 10,778 9,374 1,233171



Personnel costs 2,951 2,778 65 108

Agent commissions 2,749 2,749 - -

Other operating expenses 1,759 1,536 75 148

Benefits & other policy reserve changes 866 - 866 -

Depreciation and amortization 296 149 123 24

Claim loss expense 283 283 - -

Interest expense 90 1 18 71

Total expenses 8,994 7,496 1,147351



Pre-tax earnings (loss) from continuing operations $1,784 $1,878$86 $(180)



Income tax expense (benefit) 322 432 (75) (35)

Earnings (loss) from equity investments 15 14 - 1

Loss from discontinued operations, net of tax (25) - (25) -

Non-controlling interests 25 25 - -



Net earnings (loss) attributable to common shareholders$1,427 $1,435$136$(144)



EPS from continuing operations attributable to common $5.11 shareholders - basic

EPS from discontinued operations attributable to common(0.09) shareholders - basic

EPS attributable to common shareholders - basic $5.02



EPS from continuing operations attributable to common $5.08 shareholders - diluted

EPS from discontinued operations attributable to common(0.09) shareholders - diluted

EPS attributable to common shareholders - diluted $4.99



Weighted average shares - basic 284

Weighted average shares - diluted 286

FIDELITY NATIONAL FINANCIAL, INC. YTD SEGMENT INFORMATION (In millions, except order information in thousands) (Unaudited)



Corporate andTwelve Months Ended ConsolidatedTitle F&G Other December 31, 2020

Net earnings (loss) attributable to common shareholders $1,427 $1,435$136$ (144)



Loss from discontinued operations, net of tax (25) - (25) -



Net earnings (loss) from continuing operations attributable to common $1,452 $1,435$161$ (144) shareholders



Pre-tax earnings (loss) from continuing operations $1,784 $1,878$86 $ (180)



Non-GAAP Adjustments

Recognized (gains) and losses, net (181) (143) (45) 7

Indexed product related derivatives 111 - 111 -

Debt issuance costs 5 - - 5

Purchase price amortization 106 73 16 17

Transaction costs 68 - 21 47

Other adjustments 1 1 - -



Adjusted pre-tax earnings (loss) $1,894 $1,809$189$ (104)



Total non-GAAP, pre-tax adjustments $110 $(69) $103$ 76

Income taxes on non-GAAP adjustments (29) 18 (29) (18)

Non-controlling interest on non-GAAP adjustments (7) (6) - (1)

Total non-GAAP adjustments $74 $(57) $74 $ 57



Adjusted net earnings (loss) from continuing operations attributable to$1,526 $1,378$235$ (87) common shareholders



Adjusted EPS from continuing operations attributable to common $5.34 shareholders - diluted

FIDELITY NATIONAL FINANCIAL, INC. YTD SEGMENT INFORMATION (In millions, except order information in thousands) (Unaudited)



Twelve Months Ended Corporate andConsolidatedTitle Other December 31, 2019

Direct title premiums $2,381 $2,381$-

Agency title premiums 2,961 2,961 -

Escrow, title related and other fees 2,584 2,389 195

Total title and escrow 7,926 7,731 195



Interest and investment income 225 202 23

Recognized gains and losses, net 318 326 (8)

Total revenue 8,469 8,259 210



Personnel costs 2,696 2,562 134

Agent commissions 2,258 2,258 -

Other operating expenses 1,681 1,509 172

Depreciation and amortization 178 154 24

Claim loss expense 240 240 -

Interest expense 47 - 47

Total expenses 7,100 6,723 377



Pre-tax earnings (loss) $1,369 $1,536$(167)



Income tax expense (benefit) 308 363 (55)

Earnings from equity investments 15 13 2

Non-controlling interests 14 15 (1)



Net earnings (loss) attributable to common shareholders$1,062 $1,171$(109)



EPS attributable to common shareholders - basic $3.89

EPS attributable to common shareholders - diluted $3.83



Weighted average shares - basic 273

Weighted average shares - diluted 277

FIDELITY NATIONAL FINANCIAL, INC. YTD SEGMENT INFORMATION (In millions, except order information in thousands) (Unaudited)



Corporate andTwelve Months Ended ConsolidatedTitle Other December 31, 2019

Net earnings (loss) attributable to common shareholders $1,062 $1,171$ (109)



Pre-tax earnings (loss) $1,369 $1,536$ (167)



Non-GAAP Adjustments

Recognized (gains) and losses, net (318) (326) 8

FIA related derivative

Reinsurance related derivative

Purchase price amortization 105 86 19

Transaction costs 58 - 58

Severance costs $6 $- $ 6

Other adjustments 1 1 -



Adjusted pre-tax earnings (loss) $1,221 $1,297$ (76)



Total non-GAAP, pre-tax adjustments $(148) $(239)$ 91

Income taxes on non-GAAP adjustments 38 60 (22)

Non-controlling interest on non-GAAP adjustments (12) (11) (1)

Total non-GAAP adjustments $(122) $(190)$ 68



Adjusted net earnings (loss) attributable to common shareholders$940 $981 $ (41)



Adjusted EPS attributable to common shareholders - diluted $3.39

FIDELITY NATIONAL FINANCIAL, INC. SUMMARY BALANCE SHEET INFORMATION (In millions)



December 31,December 31, 2020 2019

(Unaudited) (Unaudited)

Cash and investment portfolio $ 37,766 $5,760

Goodwill 4,495 2,727

Title plant 404 404

Total assets 50,455 10,677

Notes payable 2,662 838

Reserve for title claim losses 1,623 1,509

Secured trust deposits 711 791

Redeemable non-controlling interests - 344

Non-redeemable non-controlling interests 41 (17)

Total equity and non-controlling interests 8,392 5,709

Total equity attributable to common shareholders8,351 5,382

Non-GAAP Measures and Other Information

Title

The table below reconciles pre-tax title earnings to adjusted pre-tax title earnings.

Three Months Ended Year Ended

(Dollars in millions) December 31,December 31,December 31,December 31, 2020 2019 2020 2019

Pre-tax earnings $896 $468 $1,878 $1,536

Non-GAAP adjustments before taxes

Recognized (gains) and losses, net(290) (135) (143) (326)

Purchase price amortization 18 22 73 86

Other adjustments - - 1 1

Total non-GAAP adjustments (272) (113) (69) (239)

Adjusted pre-tax earnings $624 $355 $1,809 $1,297

Adjusted pre-tax margin 22.7 % 16.3 % 19.6 % 16.3 %

FIDELITY NATIONAL FINANCIAL, INC. QUARTERLY OPERATING STATISTICS (Unaudited)



Q4 2020 Q3 2020 Q2 2020 Q1 2020 Q4 2019 Q3 2019 Q2 2019 Q1 2019

Quarterly Opened Orders ('000's except % data)

Total opened orders* 728 847 693 682 492 592 544 438

Total opened orders per day* 11.6 13.2 10.8 11.0 7.8 9.3 8.5 7.2

Purchase % of opened orders 38 %40 %37 %41 %50 %52 %61 %65 %

Refinance % of opened orders 62 %60 %63 %59 %50 %48 %39 %35 %

Total closed orders* 617 571 487 377 417 409 359 263

Total closed orders per day* 9.8 8.9 7.6 6.1 6.6 6.4 5.6 4.3

Purchase % of closed orders 38 %42 %35 %46 %49 %55 %65 %66 %

Refinance % of closed orders 62 %58 %65 %54 %51 %45 %35 %34 %



Commercial (millions, except orders in '000's)

Total commercial revenue $322 $216 $184 $245 $321 $301 $286 $231

Total commercial opened orders 57.0 58.1 43.9 56.3 55.1 56.0 58.6 49.8

Total commercial closed orders 39.5 30.6 25.7 31.0 39.1 36.4 34.0 30.0



National commercial revenue $177 $113 $96 $132 $186 $172 $163 $122

National commercial opened orders 21.4 21.7 15.2 21.5 22.6 23.8 25.3 20.6

National commercial closed orders 13.4 9.8 8.8 10.7 16.2 14.1 12.7 10.5



Total Fee Per File

Fee per file $2,116 $2,063 $1,889 $2,224 $2,384 $2,459 $2,677 $2,567

Residential fee per file $1,661 $1,803 $1,614 $1,744 $1,792 $1,928 $2,075 $1,964

Total commercial fee per file $8,200 $7,100 $7,200 $7,900 $8,200 $8,300 $8,400 $7,700

National commercial fee per file $13,200 $11,500 $10,900 $12,300 $11,500 $12,200 $12,900 $11,600



Total Staffing

Total field operations employees 12,800 12,300 10,900 12,500 12,300 12,200 12,000 11,700



Actual title claims paid ($ millions)$54 $50 $51 $48 $53 $52 $66 $49

* Includes an immaterial number of non-purchase and non-refinance orders

F&G

The table below reconciles the reported after-tax net loss from continuing operations to adjusted earnings from continuing operations attributable to common shareholders.

Three months endedSeven months ended

December 31, 2020 December 31, 2020

(Dollars in millions)

Net earnings (loss) attributable to common shareholders $137 $136

Less: Earnings (loss) from discontinued operations, net of tax (2) (25)

Net earnings (loss) from continuing operations attributable to common $139 $161 shareholders

Non-GAAP adjustments (1,2):

Recognized (gains) and losses, net (76) (45)

Indexed product related derivatives 54 111

Purchase price amortization 7 16

Transaction costs 4 21

Income taxes on non-GAAP adjustments - (29)

Adjusted earnings (loss) from continuing operations attributable to common $128 $235 shareholders

Adjusted earnings from continuing operations include $68 million of favorable items in the current quarter and $86 million in the year-to-date period.

The table below provides summary financial highlights.

Three Months EndedSeven months ended

(Dollars in millions) December 31, 2020 December 31, 2020

Average assets under management (AAUM)^(1) $27,864 $27,322

Net investment spread - FIA^(1) 3.02 % 3.21 %

Net investment spread - All products^(1) 2.55 % 2.74 %

Net earnings (loss) from continuing operations attributable to common $139 $161 shareholders

Adjusted earnings from continuing operations attributable to common $128 $235 shareholders^(1)

The table below provides a summary of sales, which are not affected by PGAAP and are comparable to prior period data.

Three Months Ended Twelve Months Ended

(In millions) December 31, 2020December 31, 2019December 31, 2020December 31, 2019

Fixed indexed annuity (FIA) sales^(1)$ 947 $ 795 $3,459 $2,820

Total retail annuity sales^(1) $ 1,309 $ 921 $4,235 $3,596

Footnotes:

* Non-GAAP financial measure. See the Non-GAAP Measures section below for additional information. * Amounts are net of offsets related to value of business acquired (VOBA), deferred acquisition cost (DAC), deferred sale inducement (DSI) amortization, and unearned revenue (UREV) amortization, as applicable. DEFINITIONSThe following represents the definitions of non-GAAP measures used by F&G.

Adjusted EarningsAdjusted Earnings is a non-GAAP economic measure we use to evaluate financial performance each period. Adjusted 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 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.

Adjusted Earnings Attributable to Common ShareholdersAdjusted Earnings attributable to common shareholders is a non-GAAP economic measure we use to evaluate financial performance attributable to our common shareholders each period. Adjusted Earnings 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 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.

Net Investment SpreadNet 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.

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) funds withheld at fair value;

(v) the net payable/receivable for the purchase/sale of investments, and

(iv) 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.

Sales (FIA Sales and Total Retail Annuity Sales)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. Annuity and IUL sales are recorded as deposit liabilities (i.e. contractholder funds) within the Company's unaudited condensed consolidated financial statements in accordance with GAAP. 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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SOURCE Fidelity National Financial, Inc.