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Item 9A. Controls and Procedures

2024-02-29 compared with 2023-02-27 · 75 added, 52 removed, 325 unchanged (28% of the section changed)

7 unchanged sentences

Management’s Report on Internal Control Over Financial Reporting

This annual report does not include a report of management’s assessment regarding internal controls over financial reporting or an attestation report of the company’s registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly public companies.

Other Information

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f).

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only with proper authorizations;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

These inherent limitations are an intrinsic part of the financial reporting process.

Therefore, although the Company’s management is unable to eliminate this risk, it is possible to develop safeguards to reduce it.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company's management, under the supervision of and with the participation of the CEO and CFO, assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2023 based on criteria for effective control over financial reporting described in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in 2013.

Based on this assessment the Company's management concluded that its internal control over financial reporting was effective as of December 31, 2023 in accordance with the COSO criteria.

The Company's independent registered public

accounting firm, Ernst & Young LLP, has issued an attestation report on the effectiveness of the Company's internal control over financial reporting, which is included herein.

Changes in Internal Control Over Financial Reporting

An evaluation was performed under the supervision of the Company's management, including the CEO and CFO, of whether any change in the Company's internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) occurred during the quarter ended December 31, 2023.

Based on that evaluation, the Company’s management, including the CEO and CFO, concluded that no change in the Company’s internal control over financial reporting occurred during the quarter ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Limitations on the Effectiveness of Controls

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

Other Information

On February 21, 2023, F&G Annuities & Life, Inc.

(“F&G) entered into a first amendment (the “First Amendment”) to its credit agreement (as amended prior to the date hereof, the “Credit Agreement” and as amended by the First Amendment, the “Amended Credit Agreement”), dated as of November 22, 2022, with the financial institutions party thereto as lenders, and Bank of America, N.A.

as administrative agent (in such capacity, the “Administrative Agent”), swing line lender and an issuing bank.

The First Amendment increases the aggregate principal amount of commitments under the revolving credit facility (the “Revolving Credit Facility”) by $115 million to $665 million.

Loans under the Revolving Credit Facility generally bear interest at a variable rate based on either (i) the base rate (which is the highest of (a) one-half of one percent in excess of the federal funds rate, (b) the Administrative Agent’s “prime rate”, or (c) the sum of one percent plus Term SOFR) plus a margin of between 30.0 and 80.0 basis points depending on the non-credit-enhanced, senior unsecured long-term debt ratings of F&G or (ii) Term SOFR plus a margin of between 130.0 and 180.0 basis points depending on the non-credit-enhanced, senior unsecured long-term debt ratings of F&G.

At the current Standard & Poor’s, Moody’s and Fitch non-credit-enhanced, senior unsecured long-term debt ratings of BBB-/Ba1//BBB-, respectively, the applicable margin for revolving loans subject to Term SOFR is 165 basis points.

In addition, F&G will pay a facility fee of between 20.0 and 45.0 basis points on the entire facility, also depending on the F&G’s non-credit-enhanced, senior unsecured long-term debt ratings, which is payable quarterly in arrears.

The proceeds of the increased Revolving Credit Facility may be used for working capital and general corporate purposes.

Other than the foregoing, the terms of the Credit Agreement remain unchanged by the First Amendment.

The First Amendment is attached hereto as Exhibit 10.28 and is incorporated herein by reference.

The foregoing summary of the First Amendment does not purport to be a complete statement of the parties’ rights and obligations under the First Amendment, and is qualified in its entirety by reference to Exhibit 10.28.

Refer to Note A - Business and Summary of Significant Accounting Policies, Recent Developments for a discussion of subsequent events.

Disclosures Regarding Foreign Jurisdiction that Prevent Inspections

5 unchanged sentences

See Index to Consolidated Financial Statements on Page 101 included in Item.

8 of Part II in this Annual Report..

8 of Part II in this Annual Report on Form 10-K.

2) Financial Statement Schedules

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3.2 to the Company’s Current Report on Form 8-K, filed with the Commission on December 1, 2022).

4.1 Indenture relating to the 7.400% Senior Notes due 2028, dated as of January 13, 2023, among F&G Annuities & Life, Inc., the guarantors named therein and Citibank, N.A., as trustee (incorporated by reference to Exhibit No.

4.1 Certificate of Designations of the Company designating the 6.875% Series A Mandatory Convertible Preferred Stock, dated as of January 12, 2024 ( incorporated by reference to Exhibit No.

5.1 to the Com pany ’ s Current Report on Form 8-K , filed with the Commission on January 16, 2024).

4.2 Third Supplemental Indenture relating to the 7.950% Senior Notes due 2053, dated as of December 6, 2023, among F&G Annuities & Life, Inc., the guarantors named therein and Citibank, N.A., as trustee (incorporated by reference to the Company’s Current Report on Form 8-K, filed with the Commission on December 6, 2023) .

4.3 Form of 7.950% Senior Notes due 2053 (included in Exhibit 4.1) incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the Commission on December 6, 2023) .

4.4 Indenture , dated as of January 13, 2023, among F&G Annuities & Life, Inc., the guarantors named therein and Citibank, N.A., as trustee (incorporated by reference to Exhibit No.

4.1 to the Company’s Current Report on Form 8-K, filed with the Commission on January 13, 2023).

122 unchanged sentences

10.1 to the Company's Current Report on Form 8-K, filed with the Commission on February 21, 2023).

10.26 Credit Agreement, dated as of November 22, 2022, by and among F&G Annuities & Life, Inc., a Delaware corporation, as the borrower, the guarantors party thereto, Bank of America, N.A., as administrative agent, and the financial institutions party thereto as lenders (incorporated by reference to Exhibit No.

10.1 to the Company’s Current Report on Form 8-K, filed with the Commission on November 22, 2022).

10.26 Amended and Restated Credit Agreement, dated as of February 16, 2024, by and among F&G Annuities & Life, Inc., a Delaware corporation, as the borrower, the guarantors party thereto, Bank of America, N.A., as administrative agent, and the financial institutions party thereto as lenders (incorporated by reference to Exhibit No.

10.1 to the Company’s Current Report on Form 8-K, filed with the Commission on February 16, 2024).

10.27 Registration Rights Agreement relating to the 7.400% Senior Notes due 2028, dated as of January 13, 2023, among F&G Annuities & Life, Inc., the guarantors named therein and BofA Securities, Inc., J.P.

1 unchanged sentence

10.1 to the Company’s Current Report on Form 8-K, filed with the Commission on January 13, 2023).

10.28* First Amendment to Credit Agreement, dated as of February 21, 2023, among F&G Annuities & Life, Inc.

and the Guarantor parties and Lender parties signatory thereto.

10.28 Amendment to the Amended and Restated Investment Management Agreements;

IMA Omnibus Termination Side Letter and Existing SMA Fee Agreement, dated as of March 10, 2023, by and among F&G Annuities & Life Inc., Blackstone ISG-I Advisors L.L.C.

and Fidelity National Financial, Inc.

(incorporated by reference to Exhibit No.

10.1 to the Company’s Current Report on Form 8-K, filed with the Commission on March 10, 2023).

10.29 L etter regarding Black ston e Participat ion Fee in Respe ct of New Business, dated as of March 10, 2023, by and between F&G Annuities & Lif e Inc., and Bil Car, LLC (inc orporated by reference to Exhibit No.

10.2 to the Company Current Report on Form 8-K, filed with the Commission on March 10, 2023).

Form of Notice of F&G Restricted Stock Grant dated November 15, 2023 under F&G 2022 Omnibus Incentive Plan .

List of Subsidiaries.

7 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

F&G Annuities & Life, Inc.

Incentive-Based Compensation Recovery Policy.

101* The following financial information from the Company’s Annual Report on Form 10-K for the twelve-month period ended December 31, 2023 is formatted in Inline XBRL (Extensible Business Reporting Language):

25 unchanged sentences

Foley, II Director and Executive Chairman of the Board February 29, 2024

/s/ Raymond R.

Quirk Director February 27, 2023

/s/ Michael J.

Nolan Director February 27, 2023

/s/ Douglas K.

Ammerman Director February 29, 2024

/s/ Celina J.

Wang Doka Director February 29, 2024

Celina Wang Doka

/s/ Douglas Martinez Director February 29, 2024

Douglas Martinez

/s/ Michael J.

Nolan Director February 29, 2024

/s/ Raymond R.

Quirk Director February 29, 2024

Rood Director February 29, 2024

3 unchanged sentences

December 31, 2023

(In millions) Amortized Cost Fair Value Amount Shown on Condensed Consolidated Balance Sheet

(In millions) Amortized Cost Fair Value Amount Shown on Consolidated Balance Sheet

Fixed maturity securities, available for sale:

36 unchanged sentences

Prepaid expenses and other assets 3 6

Notes receivable 1 1

Deferred tax assets — 35

Income taxes receivable 13 60

6 unchanged sentences

F&G common stock, $ 0.001 par value;

authorized 500,000,000 shares as of December 31, 2022 and December 31, 2021;

outstanding of 126,409,904 and 105,000,000 as of December 31, 2022 and December 31, 2021, respectively, and issued of 126,409,904 and 105,000,000 as of December 31, 2022 and December 31, 2021, respectively

authorized 500,000,000 shares as of December 31, 2023 and 2022;

outstanding of 126,332,142 and 126,409,904 as of December 31, 2023 and 2022, respectively, and issued of 127,234,902 and 126,409,904 as of December 31, 2023 and 2022, respectively

Additional paid-in-capital 3,185 3,162

Retained earnings 1,926 2,061

Accumulated other comprehensive income (loss) ( 2,803 ) 734

Accumulated other comprehensive earnings (loss) ( 1,990 ) ( 2,818 )

Treasury stock, at cost ( 902,760 shares and 7,762 shares as of December 31, 2023 and

2022, respectively)

Total equity 3,103 2,405

6 unchanged sentences

SUPPLEMENTAL CONDENSED INCOME STATEMENT

(In millions) Year ended December 31, Year ended December 31, Period from June 1 to December 31, Period from January 1 to May 31,

(In millions) Year ended December 31,

2023 2022 2021

Life insurance premiums and other fees $ 3 $ — $ —

Interest and investment income 16 3 —

3 unchanged sentences

Total expenses 80 7 3

Earnings (losses) before income tax expense and equity in earnings of subsidiaries ( 4 ) ( 3 ) — ( 11 )

Income tax expense 24 — 35 —

Earnings (losses) before equity in earnings of subsidiaries 20 ( 3 ) 35 ( 11 )

Equity in earnings (losses) of subsidiaries 461 868 101 ( 303 )

Net earnings (losses) $ 481 $ 865 136 ( 314 )

Earnings (loss) before income tax expense and equity in earnings of subsidiaries ( 61 ) ( 4 ) ( 3 )

Income tax expense (benefit) ( 13 ) ( 24 ) —

Earnings (loss) before equity in earnings of subsidiaries ( 48 ) 20 ( 3 )

Equity in earnings (loss) of subsidiaries ( 10 ) 615 1,243

Net earnings (loss) $ ( 58 ) $ 635 $ 1,240

See Report of Independent Registered Public Accounting Firm.

4 unchanged sentences

SUPPLEMENTAL CONDENSED CASH FLOW STATEMENT

(In millions) Year ended December 31, Year ended December 31, Period from June 1 to December 31, Period from January 1 to May 31,

(In millions) Year ended December 31,

2023 2022 2021

Cash flows from operating activities Predecessor

Cash flows from operating activities:

Net earnings (loss) $ ( 58 ) $ 635 $ 1,240

Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:

Gain (loss) on sales of investments 1 — — —

Equity in earnings of subsidiaries ( 461 ) ( 868 ) ( 101 ) 303

Gain on sales of investments — 1 —

Equity in earnings (loss) of subsidiaries 10 ( 615 ) ( 1,243 )

Net change in income taxes 47 ( 25 ) —

8 unchanged sentences

Debt issuance costs ( 12 ) ( 4 ) —

Exercise of stock options — — — 10

Capital contributions ( 589 ) ( 500 ) —

Purchases of treasury stock ( 18 ) — —

Dividends paid ( 77 ) — —

Net revolving credit facility repayments ( 185 ) — —

Net cash provided by (used in) financing activities ( 36 ) 46 —

6 unchanged sentences

SUPPLEMENTARY INSURANCE INFORMATION

(In millions) Year ended December 31, Year ended December 31, Period from June 1 to December 31, Period from January 1 to May 31,

(In millions) Year ended December 31,

2023 2022 2021

5 unchanged sentences

Benefits, claims, losses and settlement expenses ( 3,553 ) ( 1,126 ) ( 1,932 )

Amortization, interest, and unlocking of deferred acquisition costs ( 81 ) ( 32 ) ( 4 ) 28

Amortization of deferred policy acquisition costs ( 191 ) ( 99 ) ( 46 )

Other operating expenses, net of deferrals ( 146 ) ( 102 ) ( 105 )

9 unchanged sentences

Life-contingent PRT premiums 1,964 — — 1,964 — %

Annuity product charges 300 ( 50 ) — 250 — %

Annuity product charges and other fees 455 ( 49 ) — 406 — %

Total premiums and other considerations $ 2,567 $ ( 154 ) $ — $ 2,413 — %

4 unchanged sentences

Life-contingent PRT premiums 1,362 — — 1,362 — %

Annuity product charges 269 ( 51 ) — 218 — %

Total premiums and other considerations $ 1,583 $ ( 188 ) $ — $ 1,395 — %

For the period from June 1, 2020 to December 31, 2020 Gross Amount Ceded to other companies Assumed from other companies Net Amount Percentage of amount assumed to net

Life insurance in force $ 3,892 $ ( 2,064 ) $ — $ 1,828 — %

Premiums and other considerations:

Traditional life insurance premiums 108 ( 85 ) — 23 — %

Annuity product charges 146 ( 31 ) — 115 — %

Annuity product charges and other fees 360 ( 50 ) — 310 — %

Total premiums and other considerations $ 1,882 $ ( 178 ) $ — $ 1,704 — %

For the predecessor period January 1, 2020 to May 31, 2020 Gross Amount Ceded to other companies Assumed from other companies Net Amount Percentage of amount assumed to net

For the year ended December 31, 2021 Gross Amount Ceded to other companies Assumed from other companies Net Amount Percentage of amount assumed to net

Life insurance in force $ 4,895 $ ( 1,642 ) $ — $ 3,253 — %

1 unchanged sentence

Traditional life insurance premiums 168 ( 137 ) — 31 — %

Annuity product charges 93 ( 22 ) — 71 — %

Life-contingent PRT premiums 1,146 — — 1,146 — %

Annuity product charges and other fees 281 ( 51 ) — 230 — %

Total premiums and other considerations $ 1,595 $ ( 188 ) $ — $ 1,407 — %

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures