F&G Annuities & Life, Inc. 10-K

Item 8. Financial Statements and Supplementary Data INDEX TO FINANCIAL INFORMATION F&G ANNUITIES AND LIFE, INC. AND SUBSIDIARIES Page Number Audited Consolidated Financial Statements Report of Independent Registered Public Accounting Firm on Effectiveness of Internal Control Over Financial Reporting (Ernst & Young, LLP, Des Moines, IA, Auditor Firm ID: 42 ) 122 Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements (Ernst & Young, LLP, Des Moines, IA, Auditor Firm ID : 42 ) 124 Consolidated Balance Sheets as of December 31, 2024 and 2023 126 Consolidated Statements of Operations for the years ended December 31, 2024, December 31, 2023 and December 31, 2022 127 Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2024, December 31, 2023 and December 31, 2022 128 Consolidated Statements of Equity for the years ended December 31, 2024, December 31, 2023 and December 31, 2022 129 Consolidated Statements of Cash Flows for the years ended December 31, 2024, December 31, 2023 and December 31, 2022 131 Notes to Consolidated Financial Statements 132 Consolidated Financial Statement Schedules Schedule I—Summary of Investments - Other Than Investments in Related Parties 225 Schedule II—Financial Information of Registrant 226 Schedule III—Supplementary Insurance Information 229 Schedule IV—Reinsurance 230 121 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of F&G Annuities & Life, Inc. Opinion on Internal Control Over Financial Reporting We have audited F&G Annuities & Life, Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, F&G Annuities & Life, Inc. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria. As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Roar Joint Venture, LLC, which is included in the 2024 consolidated financial statements of the Company and constituted 0.49% and 10.29% of total assets and total equity, respectively, as of December 31, 2024 and 1.36% and 6.89% of revenues and net earnings attributable to F&G common shareholders, respectively, for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Roar Joint Venture, LLC. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedules listed in the Index at Item 15(2) and our report dated February 28, 2025 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable 122 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. 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. /s/ Ernst & Young LLP Des Moines, Iowa February 28, 2025 123 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of F&G Annuities & Life, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of F&G Annuities & Life, Inc. and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedules listed in the Index at Item 15(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 28, 2025, expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 124 Fixed Indexed Annuity Embedded Derivative Liability, Market Risk Benefits, and Future Policy Benefits Liability Description of the Matter At December 31, 2024, the fair value of the Company’s fixed indexed annuity embedded derivative liability totaled $5.2 billion. Certain of the Company’s fixed indexed annuity (FIA) contracts allow the policyholder to elect an equity index linked feature, where amounts credited to the contract’s account value are linked to the performance of designated equity indices and crediting strategy selected by the policyholder. The equity index crediting feature is accounted for as an embedded derivative liability and reported at fair value as discussed in Notes A (see section on Contractholder Funds), B, and D to the consolidated financial statements. A subset of FIA contracts include certain contract features that provide minimum guarantees to policyholders, such as guaranteed minimum withdrawal benefits and guaranteed minimum death benefit features that are market risk benefits (MRB) measured at fair value as discussed in Notes A (see section on MRBs), B, and G to the consolidated financial statements. The Company’s MRB assets and MRB liabilities totaled $189 million and $549 million, respectively, as of December 31, 2024. At December 31, 2024, future policy benefits (FPB) liabilities related to traditional life and life-contingent immediate annuity policies (which includes life-contingent pension risk transfer annuities) totaled $8.7 billion. The future policy benefits liability related to these products is based on estimates of how much the Company will need to pay for future benefits and related claim expenses and the amount of net premiums to be collected from policyholders as discussed in Notes A (see section on Future Policy Benefits) and J to the consolidated financial statements. Auditing the valuation of the Company’s fixed indexed annuity embedded derivative, MRBs, and FPB liabilities was complex because of the highly judgmental nature of the determination of the assumptions required to determine the fair value of the embedded derivative and MRBs and valuation of FPB liabilities. In particular, the fair value of fixed indexed annuity embedded derivative and MRBs was sensitive to the significant assumptions including surrender rates, GMWB utilization, option cost and non-performance spread. In addition, mortality, partial withdrawals, and capital market performance scenarios were significant assumptions used in the valuation of MRBs. Mortality is a significant assumption used in the valuation of FPB liabilities. How we Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s controls over management’s process for the development of the significant assumptions used in measuring the fair value of the embedded derivative for fixed indexed annuities and MRBs and the valuation of FPB liabilities. These controls included, among others, the review and approval process management has in place for the development of the significant assumptions. To evaluate the judgment used by management in determining the assumptions used in measuring the fair value of the fixed indexed annuity embedded derivative and MRBs and the valuation of FPB liabilities, among other procedures, we involved actuarial specialists and evaluated the methodology applied by management in determining the valuation with those used in the prior period and in the industry. To evaluate the significant assumptions used by management in the methodology applied, we compared as applicable, the significant assumptions noted above to historical experience, observable market data, and management’s estimates of prospective changes in these assumptions. We also performed an independent recalculation of the embedded derivative, MRB, and FPB liabilities for a sample of policies or cohorts for comparison with the actuarial models used by management. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2020. Des Moines, Iowa February 28, 2025 125 F&G ANNUITIES & LIFE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in millions, except share data) December 31, 2024 2023 ASSETS: Investments Fixed maturity securities available for sale, at fair value, at December 31, 2024 and 2023, at an amortized cost of $ 49,729 and $ 43,601 , respectively, net of allowance for credit losses of $ 62 and $ 35 , respectively $ 46,317 $ 40,419 Preferred securities, at fair value 270 469 Equity securities, at fair value 145 137 Derivative investments 792 797 Mortgage loans, net of allowance for credit losses of $ 70 and $ 66 at December 31, 2024 and 2023, respectively 5,926 5,336 Investments in unconsolidated affiliates (certain investments at fair value of $ 272 and $ 285 at December 31, 2024 and 2023, respectively) 3,565 3,071 Other long-term investments 580 537 Policy loans 104 71 Short-term investments 2,410 1,452 Total investments 60,109 52,289 Cash and cash equivalents 2,264 1,563 Reinsurance recoverable, net of allowance for credit losses of $ 20 and $ 21 at December 31, 2024 and 2023, respectively 13,369 8,960 Goodwill 2,179 1,749 Prepaid expenses and other assets (certain assets held at fair value of $ 11 million and $ 0 at December 31, 2024 and 2023, respectively) 1,059 931 Other intangible assets, net 5,572 4,207 Market risk benefits asset 189 88 Income taxes receivable — 27 Deferred tax asset, net 299 388 Total assets $ 85,040 $ 70,202 LIABILITIES AND EQUITY Liabilities: Contractholder funds $ 56,404 $ 48,798 Future policy benefits 8,749 7,050 Market risk benefits liability 549 403 Accounts payable and accrued liabilities 2,219 2,011 Income taxes payable 5 — Notes payable 2,171 1,754 Funds withheld for reinsurance liabilities 10,867 7,083 Total liabilities 80,964 67,099 Equity: Preferred stock $ 0.001 par value; authorized 25,000,000 shares as of December 31, 2024 and 2023; outstanding and issued 5,000,000 and 0 shares as of December 31, 2024 and 2023, respectively — — F&G common stock, $ 0.001 par value; authorized 500,000,000 shares as of December 31, 2024 and 2023; outstanding of 126,792,844 and 126,332,142 as of December 31, 2024 and 2023, respectively, and issued of 127,952,143 and 127,234,902 as of December 31, 2024 and 2023, respectively — — Additional paid-in-capital 3,464 3,185 Retained earnings 2,440 1,926 Accumulated other comprehensive income (loss) ("AOCI") ( 1,923 ) ( 1,990 ) Treasury stock, at cost ( 1,159,299 shares and 902,760 shares as of December 31, 2024 and 2023, respectively) ( 30 ) ( 18 ) Total F&G Annuities & Life, Inc. shareholders' equity 3,951 3,103 Non-controlling interests 125 — Total equity 4,076 3,103 Total liabilities and equity $ 85,040 $ 70,202 See accompanying Notes to Consolidated Financial Statements 126 F&G ANNUITIES & LIFE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars and shares in millions, except per share data) Year ended December 31, 2024 2023 2022 Revenues: Life insurance premiums and other fees $ 2,860 $ 2,413 $ 1,704 Interest and investment income 2,719 2,211 1,655 Owned distribution revenues 81 — — Recognized gains and (losses), net 84 ( 124 ) ( 1,010 ) Total revenues 5,744 4,500 2,349 Benefits and expenses: Benefits and other changes in policy reserves (remeasurement gains (losses) (a)) 3,791 3,553 1,126 Market risk benefit (gains) losses ( 25 ) 95 ( 182 ) Depreciation and amortization 569 412 324 Personnel costs 296 232 157 Other operating expenses 203 146 102 Interest expense 132 97 29 Total benefits and expenses 4,966 4,535 1,556 Earnings (loss) before income taxes 778 ( 35 ) 793 Income tax expense 136 23 158 Net earnings (loss) 642 ( 58 ) 635 Less: Non-controlling interests 3 — — Net earnings (loss) attributable to F&G 639 ( 58 ) 635 Less: Preferred stock dividend 17 — — Net earnings (loss) attributable to F&G common shareholders $ 622 $ ( 58 ) $ 635 Earnings per share Basic Net earnings (loss) per share attributable to F&G common shareholders, basic $ 4.98 $ ( 0.47 ) $ 5.52 Diluted Net earnings (loss) per share attributable to F&G common shareholders, diluted $ 4.88 $ ( 0.47 ) $ 5.52 Weighted average shares outstanding F&G common stock, basic basis (b) 125 124 115 Weighted average shares outstanding F&G common stock, diluted basis (b) 131 124 115 (a) The remeasurement gains for the years ended December 31, 2024, 2023 and 2022 were $ 20 million, $ 7 million and $ 1 million, respectively . (b) Weighted average shares outstanding for the year ended December 31, 2022 includes the 105,000 for 1 stock split that became effective on June 24, 2022. See accompanying Notes to Consolidated Financial Statements 127 F&G ANNUITIES & LIFE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In millions) Year ended December 31, 2024 2023 2022 Net earnings (loss) $ 642 $ ( 58 ) $ 635 Other comprehensive income (loss), net: Changes in current discount rate - future policy benefits 224 ( 189 ) 764 Changes in instrument-specific credit risk - market risk benefits 5 ( 34 ) 67 Unrealized (loss) gain on investments and other financial instruments ( 164 ) 919 ( 4,689 ) Unrealized (loss) gain on foreign currency translation ( 5 ) 2 ( 5 ) Reclassification adjustments for change in unrealized gains and losses included in net earnings 7 130 212 Other comprehensive income (loss) 67 828 ( 3,651 ) Comprehensive income (loss) 709 770 ( 3,016 ) Less: Comprehensive income attributable to non-controlling interests 3 — — Comprehensive income (loss) attributable to F&G $ 706 $ 770 $ ( 3,016 ) See accompanying Notes to Consolidated Financial Statements 128 F&G ANNUITIES & LIFE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (In millions) F&G Annuities & Life, Inc. shareholders' equity Preferred Stock Common Stock Additional Paid-in-Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Non-controlling Interests Total Equity Balance, January 1, 2022 $ — $ — $ 2,750 $ 1,451 $ 833 $ — $ — $ 5,034 Treasury stock purchased — — — — — — — — Stock-based compensation — — 12 — — — — 12 Common stock dividends declared — — — ( 25 ) — — — ( 25 ) Other comprehensive income (loss) — — — — ( 3,651 ) — — ( 3,651 ) Debt to equity conversion — — 400 — — — — 400 Net earnings (loss) — — — 635 — — — 635 Balance, December 31, 2022 $ — $ — $ 3,162 $ 2,061 $ ( 2,818 ) $ — $ — $ 2,405 F&G Annuities & Life, Inc. shareholders' equity Preferred Stock Common Stock Additional Paid-in-Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Non-controlling Interests Total Equity Balance, January 1, 2023 $ — $ — $ 3,162 $ 2,061 $ ( 2,818 ) $ — $ — $ 2,405 Treasury stock purchased — — — — — ( 18 ) — ( 18 ) Stock-based compensation — — 23 — — — — 23 Common stock dividends declared — — — ( 77 ) — — — ( 77 ) Other comprehensive income (loss) — — — — 828 — — 828 Net earnings (loss) — — — ( 58 ) — — — ( 58 ) Balance, December 31, 2023 $ — $ — $ 3,185 $ 1,926 $ ( 1,990 ) $ ( 18 ) $ — $ 3,103 See accompanying Notes to Consolidated Financial Statements 129 F&G ANNUITIES & LIFE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY, CONTINUED (In millions) F&G Annuities & Life, Inc. shareholders' equity Preferred Stock Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Non-controlling Interests Total Equity Balance, January 1, 2024 $ — $ — $ 3,185 $ 1,926 $ ( 1,990 ) $ ( 18 ) $ — $ 3,103 Acquisition of non-controlling interest — — — — — — 136 136 Issuance of Preferred Stock — — 250 — — — — 250 Treasury stock purchased — — — — — ( 12 ) — ( 12 ) Stock-based compensation — — 29 — — — — 29 Common stock dividends declared — — — ( 108 ) — — — ( 108 ) Preferred stock dividends declared — — — ( 17 ) — — — ( 17 ) Dividends declared and distributions to non-controlling interests — — — — — — ( 14 ) ( 14 ) Other comprehensive income (loss) — — — — 67 — — 67 Net earnings (loss) — — — 639 — — 3 642 Balance, December 31, 2024 $ — $ — $ 3,464 $ 2,440 $ ( 1,923 ) $ ( 30 ) $ 125 $ 4,076 See accompanying Notes to Consolidated Financial Statements 130 F&G ANNUITIES & LIFE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Year ended December 31, 2024 2023 2022 Cash Flows from Operating Activities: Net earnings (loss) $ 642 $ ( 58 ) $ 635 Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: Depreciation and amortization 569 412 324 (Gain) loss on sales of investments and other assets and asset impairments, net ( 210 ) 461 436 Interest credited/index credits to contractholder account balances 1,327 1,409 ( 560 ) Change in market risk benefits, net ( 25 ) 95 ( 182 ) Deferred policy acquisition costs and deferred sales inducements ( 1,419 ) ( 1,082 ) ( 814 ) Charges assessed to contractholders for mortality and administration ( 291 ) ( 255 ) ( 221 ) Distributions from unconsolidated affiliates, return on investment 108 104 119 Stock-based compensation cost 29 23 12 Change in NAV of limited partnerships, net ( 350 ) ( 220 ) ( 109 ) Change in valuation of derivatives, equity and preferred securities and other assets, net 60 ( 347 ) 561 Changes in assets and liabilities, net of effects from acquisitions: Change in reinsurance recoverable ( 19 ) 94 148 Change in derivative collateral liabilities 91 410 ( 398 ) Change in future policy benefits 1,853 1,325 1,071 Change in funds withheld from reinsurers 3,795 3,386 2,056 Net change in income taxes 103 ( 4 ) 211 Net change in other assets and other liabilities ( 264 ) 81 ( 118 ) Net cash provided by operating activities 5,999 5,834 3,171 Cash Flows from Investing Activities: Proceeds from sales, calls and maturities of investments 11,260 5,279 5,429 Additions to property and equipment and capitalized software ( 24 ) ( 27 ) ( 32 ) Purchases of investment securities ( 16,922 ) ( 13,326 ) ( 12,426 ) Net proceeds from sales, maturities and purchases of short-term investment securities ( 1,103 ) ( 28 ) ( 1,654 ) Other acquisitions/disposals, net of cash acquired ( 482 ) — — Additional investments in unconsolidated affiliates ( 1,114 ) ( 1,137 ) ( 987 ) Net increase in policy loans ( 33 ) ( 19 ) ( 13 ) Distributions from unconsolidated affiliates, return of investment 478 340 313 Net increase in notes receivable ( 13 ) — — Net cash used in investing activities ( 7,953 ) ( 8,918 ) ( 9,370 ) Cash Flows from Financing Activities: Borrowings 1,050 845 550 Debt issuance costs ( 20 ) ( 16 ) ( 4 ) Net revolving credit facility (repayments) borrowings ( 365 ) ( 185 ) — Repayments of outstanding debt ( 250 ) — — Dividends paid ( 121 ) ( 101 ) — Dividends and distributions paid to non-controlling interest shareholders ( 14 ) — — Purchases of treasury stock ( 12 ) ( 18 ) — Issuance of preferred stock 250 — — Contractholder account deposits 10,147 7,787 8,530 Contractholder account withdrawals ( 8,010 ) ( 4,625 ) ( 3,450 ) Net cash provided by financing activities 2,655 3,687 5,626 Net increase (decrease) in cash and cash equivalents 701 603 ( 573 ) Cash and cash equivalents at beginning of period 1,563 960 1,533 Cash and cash equivalents at end of period $ 2,264 $ 1,563 $ 960 See accompanying Notes to Consolidated Financial Statements 131 F&G ANNUITIES & LIFE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note A - Business and Summary of Significant Accounting Policies The following describes the business and significant accounting policies of F&G Annuities & Life, Inc. (“FGAL”) and its subsidiaries (collectively, “we,” “us,” “our,” the “Company” or “F&G”), which have been followed in preparing the Consolidated Financial Statements. Description of the Business F&G is a majority-owned subsidiary of Fidelity National Financial, Inc. (NYSE: FNF) (“FNF”). We provide insurance solutions and market a broad portfolio of annuity and life insurance products through retail channels and institutional markets and earn commissions on the sale of insurance products through our owned distribution channels. For certain disclosures within this Annual Report on Form 10-K, we have elected to aggregate business based on the applicable product type, the manner in which information is regularly reviewed by management and the nature of disclosures that exist outside the Company’s generally accepted accounting principles (“GAAP”) financial statements. Retail distribution channels products include: • Deferred annuities including fixed indexed annuities (“FIA”), registered index-linked annuities (“RILA”), (together referred to as “indexed annuities”) and fixed rate annuities including multi-year guarantee annuities (“MYGA”), • Immediate annuities, and • Indexed universal life (“IUL”) insurance. Institutional markets products include: • Pension risk transfer (“PRT”) solutions, and • Funding agreements, including funding agreement backed notes (“FABN”) and Federal Home Loan Bank funding agreements (“FHLB”). F&G has one reporting segment, which reflects the manner by which our chief operating decision maker (“CODM”), the Chief Executive Officer of F&G, views and manages the business. For information about our reporting segment refer to Note V - Segment Information. Recent Developments Redemption of 5.50 % F&G Senior Notes On February 1, 2025, F&G redeemed the outstanding $ 300 million aggregate principal amount of its 5.50 % Senior Notes due May 1, 2025 (the “ 5.50 % F&G Senior Notes”). The notes were redeemed for a redemption price equal to 100 % of the principal amount of the notes plus accrued and unpaid interest to, but excluding, the redemption date. On and after the redemption date, interest will cease to accrue on the notes. 7.300 % F&G Junior Notes On January 13, 2025, F&G completed its public offering of its 7.300 % Junior Subordinated Notes due 2065 with an aggregate principal amount of $ 375 million (the “ 7.300 % F&G Notes”). F&G intends to use the net proceeds of this offering for general corporate purposes, including the repurchase, redemption or repayment at maturity of outstanding indebtedness. The 7.300 % F&G Notes were registered under the Securities Act of 1933 (as amended) (the “Securities Act”). 132 6.250 % F&G Senior Notes On October 4, 2024, F&G completed its public offering of its 6.250 % Senior Notes due 2034 with an aggregate principal amount of $ 500 million (the “ 6.250 % F&G Notes”). The 6.250 % F&G Notes are guaranteed on an unsecured, unsubordinated basis by each of F&G’s subsidiaries that are guarantors of F&G’s obligations under its existing credit agreements. A portion of the net proceeds were used to pay off the outstanding balance of $ 365 million on the Company’s revolving credit facility. The 6.250 % F&G Notes were registered under the Securities Act. 6.50 % F&G Senior Notes On June 4, 2024, F&G completed its public offering of $ 550 million aggregate principal amount of its 6.50 % Senior Notes due 2029 (the “ 6.50 % F&G Notes”). The 6.50 % F&G Notes are guaranteed on an unsecured, unsubordinated basis by each of F&G’s subsidiaries that are guarantors of F&G’s obligations under its existing credit agreement. A portion of the net proceeds were used to finance a cash tender offer by its wholly owned subsidiary Fidelity & Guaranty Life Holdings, Inc. (“FGLH”) for an aggregate principal amount of $ 250 million of FGLH’s 5.50 % Senior Notes due 2025 (the “ 5.50 % F&G Notes”). The 6.50 % F&G Notes were registered under the Securities Act. Revolving Credit Facility On February 16, 2024, F&G entered into an amendment and extension of its existing senior unsecured revolving credit agreement (the “Credit Agreement”). The maturity date of the Credit Agreement has been extended by approximately two years from November 22, 2025 to November 22, 2027. Total commitments increased from $ 665 million to $ 750 million. Pricing and advance rates remain unchanged. Financial covenants also remain essentially the same. As noted above, we used $ 365 million of net proceeds from our 6.250 % F&G Notes to pay off the Credit Agreement, and the balance was of the Credit Agreement was $ 0 as of December 31, 2024. Refer to Note L- Notes Payable for further information related to these financing facilities. FNF $ 250 million Preferred Stock Investment On January 12, 2024, we completed a $ 250 million preferred stock investment from FNF. Net proceeds from the investment have been used to support the growth of F&G’s assets under management. Under the terms of the agreement, FNF agreed to invest $ 250 million in exchange for 5,000,000 shares of F&G’s 6.875 % Series A Mandatory Convertible Preferred Stock, par value $. 0.001 per share, liquidation preference of $ 50.00 per share (the “FNF Preferred Stock”). For further information related to this preferred stock issuance, refer to Note Q - Related Party Transactions and Note U - Equity. Owned Distribution Investments On July 18, 2024, F&G acquired a 100 % ownership stake in the equity of PALH, LLC (“PALH”). PALH markets and sells life insurance and annuity products of various insurance carriers to individuals through a network of agents. Prior to the acquisition date, PALH owned a 70 % ownership stake in an operating company of which F&G owned 30 % equity. Total consideration of approximately $ 314 million is comprised of cash of $ 215 million, settlement of a prepaid asset of $ 8 million, acquisition date fair value of the previously held interests of $ 92 million, net of $ 1 million cash acquired. On January 2, 2024, F&G acquired a 70 % majority ownership stake in the equity of Roar Joint Venture, LLC (“Roar”) resulting in the consolidation of Roar in F&G’s financial statements. Roar wholesales life insurance and annuity products to banks and broker-dealers through a network of agents. Total initial consideration is comprised of cash of approximately $ 269 million and $ 48 million of contingent consideration. Under the terms of the purchase agreement, the Company has agreed to make cash payments of up to approximately $ 90 million over a three year 133 period upon the achievement by Roar of certain earnings before interest, taxes, depreciation and amortization (“EBITDA”) milestones. For more information regarding the Roar and PALH acquisitions, refer to Note P - Acquisitions . Principles of Consolidation and Basis of Presentation The Consolidated Financial Statements are prepared in accordance with GAAP and include our accounts as well as our wholly owned subsidiaries and majority-owned subsidiaries. All intercompany profits, transactions and balances have been eliminated. Non-controlling interests recorded on the Consolidated Statements of Operations represent the portion of a majority-owned subsidiary's net earnings or loss that is owned by non-controlling shareholders of the subsidiary. Non-controlling interests recorded on the Consolidated Balance Sheets represent the portion of equity in a consolidated subsidiary owned by non-controlling shareholders. Refer to Note T - Recent Accounting Pronouncements for information on recent accounting pronouncements that may have an impact on our Consolidated Financial Statements. We are involved in certain entities that are considered variable interest entities (“VIEs”) as defined under GAAP. Our involvement with VIEs is primarily to invest in assets that allow us to gain exposure to a broadly diversified portfolio of asset classes. A VIE is an entity that does not have sufficient equity to finance its own activities without additional financial support, where investors lack certain characteristics of a controlling financial interest, or where the entity is structured with non-substantive voting rights. We assess our relationships with VIEs to evaluate if we are the primary beneficiary of the VIE. If we determine we are the primary beneficiary of a VIE, we consolidate the assets and liabilities of the VIE in our Consolidated Financial Statements. See Note C - Investments for additional information on our investments in VIEs. Investments Fixed Maturity Securities Available-for-Sale Fixed maturity securities are purchased to support our investment strategies, which are developed based on factors including rate of return, maturity, credit risk, duration, tax considerations and regulatory requirements. Our investments in fixed maturity securities have been designated as available-for-sale (“AFS”) and are carried at fair value, net of allowance for expected credit losses, with unrealized gains and losses included within accumulated other comprehensive income (loss) (“AOCI”), net of deferred income taxes. We recognize investment income on fixed maturities based on the effective interest method, which results in the recognition of a constant rate of return on the investment equal to the prevailing rate at the time of purchase or at the time of subsequent adjustments of book value. Realized gains and losses on sales of our fixed maturity securities are determined on the first-in first-out cost basis. We generally record security transactions on a trade date basis except for private placements, which are recorded on a settlement date basis. Realized gains and losses on sales of fixed maturity securities are reported within Recognized gains and (losses), net in the Consolidated Statements of Operations. Fixed maturity securities AFS are subject to an allowance for credit loss and changes in the allowance are reported in net earnings as a component of Recognized gains and (losses), net. For details on our policy around allowance for expected credit losses on available-for-sale securities, refer to Note C - Investments. Preferred and Equity Securities Preferred and equity securities held are carried at fair value as of the balance sheet dates. Changes in fair value and realized gains and losses on sales of our preferred and equity securities are reported within Recognized gains and losses, net in the Consolidated Statements of Operations. Realized gains and losses on sales of our preferred and equity securities are determined on the first-in first-out cost basis and are credited or charged to earnings on a trade date basis unless the security is a private placement in which case settlement date basis is used. Interest and dividend income from these investments is reported in Interest and investment income in the Consolidated Statements of Operations. 134 Derivative Financial Instruments We hedge certain portions of our exposure to product related equity market risk by entering into derivative transactions (primarily equity options). We utilize interest rate swaps to reduce market risks from interest rate changes on our earnings associated with our floating rate investments. All such derivative instruments are recognized as either assets or liabilities in the Consolidated Balance Sheets at fair value. The changes in fair value are reported within Recognized gains and losses, net in the Consolidated Statements of Operations. The change in the fair value of derivative instruments is included in (Gain) loss on sales of investments and other assets and asset impairments, net, in the Consolidated Statements of Cash Flow. We purchase financial instruments that may contain embedded derivative instruments. If it is determined that the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract, and a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is bifurcated from the host contract for measurement purposes. Mortgage Loans Our investment in mortgage loans consists of commercial and residential mortgage loans on real estate, which are reported at amortized cost, less allowance for expected credit losses. For details on our policy around allowance for expected credit losses on mortgage loans, refer to Note C - Investments . Commercial mortgage loans are continuously monitored by reviewing appraisals, operating statements, rent revenues, annual inspection reports, loan specific credit quality, property characteristics, market trends and other factors. Commercial mortgage loans are rated for the purpose of quantifying the level of risk. Loans are placed on a watch list when the debt service coverage (“DSC”) ratio falls below certain thresholds and the loan-to-value (“LTV”) ratios exceeds certain thresholds. Loans on the watchlist are closely monitored for collateral deficiency or other credit events that may lead to a potential loss of principal or interest. We define delinquent mortgage loans as 30 days past due, consistent with industry practice. Residential mortgage loans have a primary credit quality indicator of either a performing or nonperforming loan. We define nonperforming residential mortgage loans as those that are 90 or more days past due and/or in nonaccrual status, which is assessed monthly. Generally, nonperforming residential mortgage loans have a higher risk of experiencing a credit loss. We consider residential mortgage loans that are 90 or more days past due and have an LTV greater than 90% to be foreclosure probable. Interest on loans is recognized on an accrual basis at the applicable interest rate on the principal amount outstanding. Loan origination fees and direct costs, as well as premiums and discounts, are amortized as level yield adjustments over the respective loan terms. Unamortized net fees or costs are recognized upon early repayment of the loans. Interest income, amortization of premiums and discounts, prepayment fees, and loan commitment fees are reported in Interest and investment income in the Consolidated Statements of Operations. Policy loans Policy loans are reported at the unpaid principal balance and are fully collateralized by the cash surrender value of underlying insurance policies. Short-term investments Short-term investments consist of financial instruments with an original maturity of one year or less when purchased and include short-term fixed maturity securities and money market instruments, which are carried at fair value, and short-term loans, which are carried at amortized cost, which approximates fair value. 135 Investments in Unconsolidated Affiliates We account for our investments in unconsolidated affiliates using the equity method or by electing the fair value option. Initial investments are recorded at cost. For investments subsequently measured using the equity method (primarily limited partnerships), adjustments to the carrying amount reflect our pro rata ownership percentage of the operating results as indicated by net asset value (“NAV”) in the unconsolidated affiliates’ financial statements, which we may adjust if we determine NAV is not calculated consistent with investment company fair value principles. Our pro rata share of NAV adjustments are reported in Interest and investment income and realized gains and losses on sales are reported in Recognized gains and (losses), net in the Consolidated Statements of Operations. Distributions received from investments measured using the equity method are recorded as a decrease in the investment balance. Recognition of income and adjustments to the carrying amount can be delayed due to the availability of the related financial statements, which are obtained from the general partner or managing member generally on a one to three month delay. Management inquires quarterly with the general partner or managing member to determine whether any credit or other market events have occurred since prior quarter financial statements to ensure any material events are properly included in our current quarter NAV adjustments and investment income. For investments subsequently measured using the fair value option, adjustments to the carrying amount reflecting the change in fair value of the investment and realized gains and losses on sales are reported in Recognized gains and (losses), net in the Consolidated Statements of Operations. Distributions received from investments measured using the fair value option are reported within Interest and investment income in the Consolidated Statements of Operations. For descriptions of the fair value methodologies used for our investments, refer to Note B - Fair Value of Financial Instruments. Interest and investment income Dividends and interest income are recorded in Interest and investment income and recognized when earned. Income or losses upon call or prepayment of fixed maturity securities are recognized in Interest and investment income. Amortization of premiums and accretion of discounts on investments in fixed maturity securities are reflected in Interest and investment income over the contractual terms of the investments, and for callable investments at a premium, based on the earliest call date of the investments, in a manner that produces a constant effective yield. For mortgage-backed and asset-backed securities, included in the fixed maturity securities portfolios, one of two models may be used to recognize interest income. For higher rated securities, interest income will be estimated based on an effective yield that considers cash flows received to date plus current expectations of future cash flows. For all other securities, interest income will be estimated based upon an effective yield that considers current expectations of future cash flows. For both interest income models, the estimated future cash flows include assumptions regarding the performance of the underlying collateral pool. Interest and investment income is presented net of investment expenses and the effects of certain reinsurance contracts. Cash and Cash Equivalents Highly liquid instruments purchased as part of cash management with original maturities of three months or less are considered cash equivalents. The carrying amounts reported in the Consolidated Balance Sheets for these instruments approximate fair value. 136 Fair Value of Financial Instruments The fair values of financial instruments presented in the Consolidated Financial Statements are estimates of the fair values at the balance sheet date using available market information and appropriate valuation methodologies. These estimates are subjective in nature and involve uncertainties and significant judgment in the interpretation of current market data. See a description of the fair value methodology used in Note B - Fair Value of Financial Instruments . Fair Value of Assets Acquired and Liabilities Assumed in Business Combinations The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, requires an acquirer to recognize, separately from goodwill, the identifiable assets acquired, liabilities assumed, and any non-controlling interest in the acquiree, and to measure these items generally at their acquisition date fair values. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, we are required to report provisional amounts in the financial statements for the items for which the accounting is incomplete. Adjustments to provisional amounts initially recorded that are identified during the measurement period are recognized in the reporting period in which the adjustment amounts are determined. This includes any effect on earnings of changes in depreciation, amortization, or other income effects as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. During the measurement period, we are also required to recognize additional assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those assets and liabilities as of that date. The measurement period ends the sooner of one year from the acquisition date, when we receive the information we were seeking about facts and circumstances that existed as of the acquisition date or learn that more information is not obtainable. Goodwill Goodwill represents the excess of cost over fair value of identifiable net assets acquired and assumed in a business combination. Goodwill and other intangible assets with indefinite useful lives are reviewed for impairment at the reporting unit level on an annual basis or more frequently if circumstances indicate potential impairment, through a comparison of fair value to the carrying amount. In evaluating the recoverability of goodwill, we perform a qualitative analysis at the reporting unit level to determine whether there are any events or circumstances that would indicate it is more likely than not that the fair value of our recorded goodwill exceeds its carrying value, prior to performing a full fair-value assessment. We complete annual goodwill impairment analyses in the fourth quarter of each period presented using a September 30 measurement date. For the years ended December 31, 2024 and 2023, we determined there were no events or circumstances which indicated that the carrying value of a reporting unit exceeded the fair value. Insurance and Reinsurance Related Intangible Assets We have insurance and reinsurance related intangible assets, which include the value of insurance and reinsurance contracts acquired (hereafter referred to as “VOBA”), DAC, DSI, and cost of reinsurance (“COR”). VOBA, DAC, and DSI are reported in Other intangible assets, net, on the Consolidated Balance Sheets. COR may be reported in Prepaid expenses and other assets or in Accounts payable and accrued liabilities on the Consolidated Balance Sheets as described below under “ Reinsurance - Cost of Reinsurance.” VOBA is an intangible asset that reflects the amount recorded as insurance contract liabilities less the estimated fair value of in-force contracts (“VIF”) in a life insurance company acquisition. It represents the portion of the purchase price that is allocated to the value of the rights to receive future cash flows from the business in force at the acquisition date. VOBA is a function of the VIF, current GAAP reserves, GAAP assets, and deferred tax liability. The VIF is determined by the present value of statutory distributable earnings less opening required capital. DAC 137 consists principally of commissions and other acquisition costs that are related directly to the successful sale of new or renewal insurance contracts that are deferred as they are incurred. When insurance contracts are reinsured and reinsurance accounting is applied, acquisition cost reimbursements from reinsurers are recorded as a reduction to DAC. Indirect or unsuccessful acquisition costs, maintenance, product development and overhead expenses are charged to expense as incurred and are offset by maintenance expense reimbursements within a reinsurance arrangement, when reinsurance accounting is applied to the respective arrangement DSI represents up front bonus credits and persistency or vesting bonuses credited to contractholder fund balances. COR represents net cash flows on reinsurance coverage to ensure no gain or loss is recognized at inception. VOBA, DAC, DSI, and COR are amortized on a constant level basis for the grouped contracts over the expected term of the related contracts to approximate straight-line amortization. Contracts are grouped by product type, feature and issue year into cohorts consistent with the grouping used in estimating the associated liability, where applicable. The constant level amortization bases of VOBA, DAC, DSI, and COR varies by product type. For universal life and IUL insurance products, the constant level basis used is face amount in force. For deferred annuities (indexed annuities and fixed rate annuities), the constant level basis used is initial premium deposit for DAC and DSI and vested account value as of the acquisition date for VOBA and ceded initial premium for COR. For immediate annuity contracts, the VOBA balance is amortized in alignment with the Company’s accounting policy of amortizing the deferred profit liability (“DPL”). All amortization bases are adjusted by full lapses, which includes deaths, full surrenders, annuitizations and maturities, where applicable. The constant level basis used for amortization are projected using mortality and lapse assumptions that are based on Company’s experience, industry data, and other factors and are consistent with those used for the FPB, where applicable. If those projected assumptions change in future periods, they will be reflected in the cohort level amortization basis at that time. Unexpected contract terminations, due to higher mortality and/or lapse experience than expected, are recognized in the current period as a reduction of the capitalized balances. All balances are reduced for actual experience in excess of expected experience with changes in future estimates recognized prospectively over the remaining expected grouped contract term. The impact of changes in projected assumptions and the impact of actual experience that is different from expectations impact the amortization of these intangible assets, which is reported within Depreciation and amortization for VOBA, DAC DSI and for COR, if the net COR balance is in a deferred gain position is reported within Life insurance premiums and other fees, and if the net COR balance is in a deferred loss position is reported within Other operating expenses in the Consolidated Statements of Operations. Some of our IUL policies require payment of fees or other policyholder assessments in advance for services that will be rendered over the estimated lives of the policies or contracts. These payments are established as URL upon receipt and included in Accounts payable and other accrued liabilities in the Consolidated Balance Sheets. URL is amortized like DAC over the estimated lives of these policies. Other Intangible Assets We have other intangible assets, not including goodwill, VOBA, DAC or DSI, which consist primarily of customer relationships and contracts, the value of distribution network acquired (“VODA”), trademarks and tradenames, state licenses and computer software, which are generally recorded in connection with business combinations at their fair value . Intangible assets with estimable lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. In general, customer relationships are amortized over their estimated useful lives using an accelerated method, which takes into consideration expected customer attrition rates. VODA is an intangible asset that represents the value of an acquired distribution network and is amortized using the sum of years digits method. Contractual relationships are generally amortized over their contractual life. Trademarks and tradenames are generally amortized over ten years . Capitalized computer software includes the fair value of software acquired in business combinations, purchased software and capitalized software development costs. Purchased software is recorded at cost and amortized using the straight-line method over its estimated useful life. Software acquired in business combinations is recorded at its fair value and amortized using straight-line or accelerated methods over its estimated useful life. For internal-use computer software products, 138 internal and external costs incurred during the preliminary project stage are expensed as they are incurred. Internal and external costs incurred during the application development stage are capitalized and amortized on a product by product basis commencing on the date the software is ready for its intended use. We do not capitalize any costs once the software is ready for its intended use. We review VOBA, DSI and other intangible assets for impairment annually or when events or circumstances occur that indicate a potential change in the underlying basis . Refer to Note F - Intangibles for details of impairment expense. Contingent Consideration Contingent consideration recognized in connection with a business combination represents an obligation to transfer additional assets or equity interests as part of the exchange for control of an acquiree if specified future events or conditions are met. Contingent consideration is recognized at fair value in the Consolidated Balance Sheets within Accounts payable and accrued liabilities. Changes in fair value are recognized in the Consolidated Statements of Operations as Other operating expenses. Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation in Prepaid expenses and other assets on the Consolidated Balance Sheets. Depreciation is computed primarily using the straight-line method based on the estimated useful lives of the related assets: twenty to thirty years for buildings and three to twenty-five years for furniture, fixtures and equipment. Leasehold improvements are amortized on a straight-line basis over the lesser of the term of the applicable lease or the estimated useful lives of such assets. Property and equipment are reviewed for impairment whenever events or circumstances indicate that the carrying amounts may not be recoverable. Contractholder Funds Contractholder funds include deferred annuities (indexed annuities and fixed rate annuities), IULs, funding agreements and non-life contingent (“NLC”) immediate annuities (which includes NLC PRT annuities). The liabilities for contractholder funds for fixed rate annuities, funding agreements and NLC immediate annuities consist of contract account balances that accrue to the benefit of the contractholders. The liabilities for indexed annuities and IUL policies consist of the value of the host contract plus the fair value of the indexed crediting feature of the policy, which is accounted for as an embedded derivative. The embedded derivative liability is carried at fair value in Contractholder funds in the Consolidated Balance Sheets with changes in fair value reported in Benefits and other changes in policy reserves in the Consolidated Statements of Operations. See a description of the fair value methodology used in Note B - Fair Value of Financial Instruments . Future Policy Benefits The FPB are determined as the present value of future policy benefits and related claims expenses to be paid to or on behalf of the policyholder less the present value of future net premiums to be collected from policyholders. The FPB for traditional life policies and life-contingent immediate annuity policies (which includes life-contingent PRT annuities) are estimated using current assumptions that include discount rate, mortality and surrender/lapse terminations for traditional life insurance policies only, and expenses. The expense assumption is locked-in at contract issuance and not subsequently reviewed or updated. The initial assumptions are based on generally accepted actuarial methods and a combination of internal and industry experience. Policies are terminated through surrenders, lapses and maturities, where surrenders represent the voluntary terminations of policies by policyholders, lapses represent cancellations by us due to nonpayment of premiums, and maturities are determined by policy contract terms. For traditional life policies and life-contingent immediate annuity policies, contracts are grouped into cohorts by product type, legal entity, and issue year, or acquisition year for cohorts established as of the FNF Acquisition Date. Life-contingent PRT annuities are grouped into cohorts by deal and legal entity. At contract inception, a net 139 premium ratio (“NPR”) is determined, which is calculated based on discounted future cash flows projected using best estimate assumptions and is capped at 100 %, as net premiums cannot exceed gross premiums. Cohorts with NPRs less than 100 % are not used to offset cohorts with NPRs greater than 100 %. The NPR is adjusted for changes in cash flow assumptions and for differences between actual and expected experience. We assess the appropriateness of all future cash flow assumptions, excluding the expense assumption, on a quarterly basis and perform an in-depth review of future cash flow assumptions in the third quarter of each year. Updates are made when evidence suggests a revision is necessary. Updates for actual experience, which includes actual cash flows and insurance in-force, are performed on a quarterly basis. These updated cash flows are used to calculate a revised NPR, which is used to derive an updated liability as of the beginning of the current reporting period, discounted at the original contract issuance date. The updated liability is compared with the carrying amount of the liability as of that same date before the revised NPR. The difference between these amounts is the remeasurement gain or loss, presented parenthetically within Benefits and other changes in policy reserves in the Consolidated Statements of Operations. In subsequent periods, the revised NPR is used to measure the FPB, subject to future revisions. If the NPR is greater than 100 %, and therefore capped at 100 %, the liability is increased and expensed immediately to reflect the amount necessary for net premiums to equal gross premiums. As the liability assumptions are reviewed and updated, if deemed necessary, at least annually, if conditions improve whereby the contracts are no longer expected to have net premiums in excess of gross premiums, the improvements would be captured in the remeasurement process and reflected in the Consolidated Statements of Operations in the period of improvement. For traditional life policies and life-contingent immediate annuity policies (which includes life-contingent PRT annuities), the discount rate assumption is an equivalent single rate that is derived based on A-credit-rated fixed-income instruments with similar duration to the liability. We selected fixed-income instruments that have been A-rated by Bloomberg. In order to reflect the duration characteristics of the liability, we will use an implied forward yield curve and linear interpolation will be used for durations that have limited or no market observable points on the curve. The discount rate assumption is updated quarterly and used to remeasure the liability at the reporting date, with the resulting change reflected in the Consolidated Statements of Comprehensive Income (Loss). Deferred Profit Liability For life-contingent immediate annuity policies, gross premiums received in excess of net premiums are deferred at initial recognition as a DPL. Premiums are measured using assumptions consistent with those used in the measurement of the related liability for FPBs, including discount rate, mortality, and expenses. The DPL is amortized and recognized as premium revenue with the amount of expected future benefit payments, discounted using the same discount rate determined and locked-in at contract issuance that is used in the measurement of the related FPB. Interest is accreted on the balance of the DPL using this same discount rate. We periodically review and update our estimates using the actual historical experience and updated cash flows for the DPL at the same time as the estimates of cash flows for the FPB. When cash flows are updated, the updated estimates are used to recalculate the initial DPL at contract issuance. The recalculated DPL as of the beginning of the current reporting period is compared to the carrying amount of the DPL as of the beginning of the current reporting period, with any differences recognized as a remeasurement gain or loss, presented parenthetically within Benefits and other changes in policy reserves in the Consolidated Statements of Operations. The DPL is recorded as a component of the Future policy benefits in the Consolidated Balance Sheets. Market Risk Benefits MRBs are contracts or contract features that both provide protection to the contract holder from other-than-nominal capital market risk (equity, interest rate and foreign exchange risk) and expose the Company to other-than-nominal capital market risk. MRBs include certain contract features primarily on indexed annuities products that provide minimum guarantees to policyholders, such as guaranteed minimum death benefit (“GMDB”), guaranteed minimum withdrawal benefit (“GMWB”) riders and guaranteed minimum accumulation benefit (“GMAB”) riders. In certain reinsurance transactions, the underlying risks ceded to a reinsurer contain MRBs. 140 MRBs (inclusive of reinsured MRBs) are measured at fair value using an attributed fee measurement approach where attributed fees are explicit rider charges collectible from the policyholder (or paid to the reinsurer) used to cover the excess benefits, which represent expected benefits in excess of the policyholder’s account value. At contract inception, an attributed fee ratio is calculated equal to rider charges over benefits paid in excess of the account value attributable to the MRBs. The attributed fee ratio remains static over the life of the MRBs and is capped at 100 %. Each period subsequent to contract inception, the attributed fee ratio is used to calculate the fair value of the MRBs using a risk neutral valuation method and is based on current net amounts at risk, market data, internal and industry experience, and other factors. The balances are computed using assumptions including mortality, full and partial surrender, GMWB utilization, risk-free rates including non-performance spread and risk margin, market value of options and economic scenarios. Policyholder behavior assumptions are reviewed at least annually, typically in the third quarter, for any revisions. Reinsured MRBs are valued using a methodology consistent with direct MRBs, with the exception of the non-performance spread which reflects the credit of the reinsurer. MRBs can either be in an asset or liability position and are presented separately on the Consolidated Balance Sheets as the right of setoff criteria are not met. Changes in fair value, net, are recognized in Market risk benefit (gains) losses in the Consolidated Statements of Operations, except for the change in fair value due to a change in our instrument-specific credit risk, which is recognized in the Consolidated Statements of Comprehensive Income (Loss). See a description of the fair value methodology used in Note B - Fair Value of Financial Instruments and Note G - Market Risk Benefits . Income Taxes We recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities and expected benefits of utilizing net operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We evaluate the likelihood of realizing the benefit of our deferred tax assets and may record a valuation allowance if, based on all available evidence, we determine that it is more likely than not that some portion of the tax benefit will not be realized. We adjust the valuation allowance if, based on our evaluation, there is a change in the amount of deferred income tax assets that are deemed more-likely-than-not to be realized. T he impact on deferred taxes of changes in tax rates and laws, if any, is applied to the years during which temporary differences are expected to be settled and reflected in the financial statements in the period enacted. Reinsurance Our insurance subsidiaries enter into reinsurance agreements with other companies in the normal course of business. In certain arrangements that are not accounted for as reinsurance, the right of offset may be applied resulting in all balances and activity associated with the agreement being presented on a net basis in the Consolidated Balance Sheets and Statements of Operations, respectively. When the right of offset is not applied, the arrangement is reflected on a gross basis in the Consolidated Balance Sheets and Statements of Operations. This results in the recognition of a Reinsurance recoverable for amounts due from the reinsurer. For arrangements accounted for as reinsurance, the Reinsurance recoverable balance reflects the reserve balance of the policies ceded. For arrangements not accounted for as reinsurance, deposit accounting is applied. As a result, the deposit asset presented as a Reinsurance recoverable on the Consolidated Balance Sheets, is based on the actual and expected cash flows due from the reinsurer where the interest method is used to accrete the deposit asset using an effective yield based on changes in actual and expected cash flows. For coinsurance of FIA and IUL policies, the Reinsurance recoverable will incorporate the fair value of the indexed crediting feature, which is accounted for as an embedded derivative. Changes in the Reinsurance recoverable balance are reported as Benefits and other changes in policy reserves in the Consolidated Statements of Operations. 141 Cost of Reinsurance Amounts received from or paid to reinsurers in excess of reimbursements or liabilities ceded, respectively, represents COR. If the net COR balance is in a deferred gain position, it is included within Accounts payable and accrued liabilities with the related amortization reflected within Life insurance premiums and other fees and, if in a deferred loss position, is included within the Prepaid expenses and other assets with the related amortization reflected within Other operating expenses, in the Consolidated Balance Sheets and Statements of Operations, respectively. Premiums and expenses are recorded net of reinsurance ceded. Funds Withheld Arrangements F&G cedes certain business on a coinsurance funds withheld basis. Investment results for the assets that support the coinsurance that are segregated within the funds withheld account are passed directly to the reinsurer pursuant to the contractual terms of the reinsurance agreement, which creates embedded derivatives considered to be total return swaps. These total return swaps are not clearly and closely related to the underlying reinsurance agreement and thus require bifurcation. The fair value of the total return swaps is based on the change in fair value of the underlying assets held in the funds withheld account. These embedded derivatives are reported in Prepaid expenses and other assets if in a net gain position, or Accounts payable and accrued liabilities, if in a net loss position on the Consolidated Balance Sheets and the related gains or losses are reported in Recognized gains and (losses), net, on the Consolidated Statements of Operations. Revenue Recognition F&G derives its revenue from external customers primarily located in the United States. Life insurance premiums and other fees primarily reflect premiums on life-contingent PRTs and traditional life insurance products, which are recognized as revenue when due from the policyholder, as well as policy rider fees primarily on indexed annuities policies, the cost of insurance on IUL policies and surrender charges assessed against policy withdrawals in excess of the policyholder's allowable penalty-free amounts. We have ceded the majority of our traditional life business to unaffiliated third-party reinsurers. While the base contract has been reinsured, we continue to retain the return of premium rider. Other income related to riders is earned when elected by the policyholder. Surrender charges are earned when a policyholder withdraws funds from the contract early or cancels the contract. Premium and annuity deposit collections for indexed annuities, fixed rate annuities, immediate annuities and PRT without life contingencies, and amounts received for funding agreements are reported in the financial statements as deposit liabilities (i.e., Contractholder Funds) instead of as sales or revenues. Similarly, cash payments to customers are reported as decreases in the liability for contractholder funds and not as expenses. Sources of revenues for products accounted for as deposit liabilities include net investment income, surrender, cost of insurance and other charges deducted from Contractholder Funds, and net realized gains (losses) on investments. Components of expenses for products accounted for as deposit liabilities are interest-sensitive and index product benefits (primarily interest credited to account balances or the hedging cost of providing index credits to the policyholder), amortization of VOBA, DAC, DSI and COR, other operating costs and expenses, and income taxes. Premiums, annuity deposits (net of reinsurance and reinsurance recoverable) and funding agreements, which are not included as revenues in the Consolidated Statements of Operations, collected by product type were as follows: Year Ended December 31, 2024 2023 2022 Indexed annuities $ 5,828 $ 4,738 $ 4,483 Fixed rate annuities 1,277 1,147 1,522 Funding agreements (FABN/FHLB) 2,404 1,256 1,891 Life insurance and other (a) 638 646 446 Total $ 10,147 $ 7,787 $ 8,342 (a) Life insurance and other primarily includes indexed universal life insurance. 142 Interest and investment income consist primarily of interest payments received on fixed maturity security holdings and dividends received on preferred and equity security holdings along with the investment income of limited partnerships and is recognized when earned. Owned distribution revenues generated from commissions earned on contracts with insurance carriers are considered variable consideration and consist of revenue primarily from annuity products. Revenue is recognized at the effective date of each policy sold at the net amount retained under a contract within Owned distribution revenues on the Consolidated Statements of Operations. Intercompany transactions are eliminated in consolidation. Benefits and Other Changes in Policy Reserves Benefit expenses for deferred annuities (indexed annuities and fixed rate annuities), IUL policies and funding agreements include interest credited to contractholder account balances. For indexed annuities and IUL, the benefits expense includes the change in fair value of the embedded derivatives associated with the equity crediting rates. Benefit claims in excess of contract account balances, net of reinsurance recoveries, are charged to expense in the period that they are earned by the policyholder based on their selected strategy or strategies. All changes in the Reinsurance recoverable balance that need to be reflected in earnings are included within Benefits and other changes in policy reserves on the Consolidated Statements of Operations. For reinsurance arrangements that apply reinsurance accounting, this primarily relates to changes in the reserve balance ceded. For reinsurance arrangements that apply deposit accounting, this primarily relates to accretion of the deposit asset balance. Other changes in policy reserves also include the change in reserves for life insurance products. For traditional life and life-contingent immediate annuities (which includes PRT annuities with life contingencies), policy benefit claims are charged to expense in the period that the claims are incurred, net of reinsurance recoveries. Remeasurement gains or losses on the related FPB and DPL balances are presented parenthetically within Benefits and other changes in policy reserves in the Consolidated Statements of Operations. Stock-Based Compensation Plans We account for stock-based compensation plans using the fair value method. Using the fair value method of accounting, compensation cost is measured based on the fair value of the award at the grant date using quoted market prices and recognized over the service period. Refer to Note R - Employee Benefit Plans for more details regarding our stock compensation plans. Earnings Per Share Basic earnings per share (“EPS”), as presented on the Consolidated Statements of Operations, is computed by dividing net earnings available to common shareholders in a given period by the weighted average number of common shares outstanding during such period. Net earnings available to common shareholders is net earnings adjusted for net earnings attributable to non-controlling interests, preferred stock dividends, including preferred stock dividends declared. In periods when earnings are positive, diluted EPS is calculated by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding plus assumed conversions of potentially dilutive securities. For periods when we recognize a net loss, diluted loss per share is equal to basic loss per share as the impact of assumed conversions of potentially dilutive securities is considered to be antidilutive. Certain shares of restricted stock, using the treasury stock method and, as of January 12, 2024, the FNF Preferred Stock, using the if-converted method, are treated as common share equivalents for purposes of calculating diluted earnings per share for periods in which the effect is dilutive. The if-converted method assumes that the convertible preferred stock converts into common stock at the beginning of the period or date of issuance, if later. Refer to Note S - Earnings Per Share for more details over our calculation of EPS. 143 Comprehensive Income (Loss) We report Comprehensive Income (Loss) in accordance with GAAP on the Consolidated Statements of Comprehensive Income (Loss). Total comprehensive income is defined as all changes in shareholders' equity during a period, other than those resulting from investments by and distributions to shareholders. While total Comprehensive Income (Loss) is the activity in a period and is largely driven by net earnings in that period, Accumulated other comprehensive income or loss (“AOCI”) represents the cumulative balance of other comprehensive income, net of tax, as of the balance sheet date. Amounts reclassified to net earnings relate to the realized gains (losses) on our investments and other financial instruments, excluding investments in unconsolidated affiliates, and are included in Recognized gains and (losses), net on the Consolidated Statements of Operations. The income tax effects are released from AOCI when the related activity is reclassified to net earnings. Management Estimates The preparation of these Consolidated Financial Statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Periodically, and at least annually, typically in the third quarter, we review the assumptions associated with reserves for policy benefits and product guarantees. During the third quarter and for the year ended December 31, 2024, based on policyholder behavior, experience and interest rate movements, we reflected updates to surrender assumptions for recent and expected near term policyholder behavior, as well as updated certain indexed annuities assumptions used to calculate the fair value of the embedded derivative component within contractholder funds. These changes resulted in a decrease in total benefits and other changes in policy reserves of approximately $ 89 million for the year ended December 31, 2024. During the third quarter and for the year ended December 31, 2023, based on increases in interest rates and pricing changes, we updated certain indexed annuities assumptions to calculate the fair value of the embedded derivative component within the contractholder funds and also aligned reserves to actual policyholder behavior. These changes resulted in an increase in total benefits and other changes in policy reserves of approximately $ 73 million . During the fourth quarter of 2022, based on increases in interest rates and pricing changes during 2022, we updated certain indexed annuities assumptions used to calculate the fair value of the embedded derivative component within contractholder funds and the fair value of market risk benefits. These changes, taken together, resulted in an increase in contractholder funds and market risk benefits of $ 99 million . Reclassifications Prior period amounts have been reclassified to conform with the current period presentation. Note B - Fair Value of Financial Instruments Our measurement of fair value is based on assumptions used by market participants in pricing the asset or liability, which may include inherent risk, restrictions on the sale or use of an asset, or non-performance risk, which may include our own credit risk. We estimate an exchange price is the price in an orderly transaction between market participants to sell the asset or transfer the liability (“exit price”) in the principal market, or the most advantageous market for that asset or liability in the absence of a principal market as opposed to the price that would be paid to acquire the asset or assume a liability (“entry price”). We categorize financial instruments carried at fair value into a three-level fair value hierarchy, based on the priority of inputs to the respective valuation technique, along with net asset value. The three-level hierarchy for fair value measurement is defined as follows: 144 Level 1 – Values are unadjusted quoted prices for identical assets and liabilities in active markets accessible at the measurement date. Level 2 – Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are observable or can be corroborated by market data for the term of the instrument. Such inputs include market interest rates and volatilities, spreads, and yield curves. Level 3 – Certain inputs are unobservable (supported by little or no market activity) and significant to the fair value measurement. Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date based on the best information available in the circumstances. Net Asset Value (“NAV”) – Certain equity investments are measured using NAV as a practical expedient in determining fair value. In addition, our unconsolidated affiliates (primarily limited partnerships) are primarily accounted for using the equity method of accounting with fair value determined using NAV as a practical expedient. Our carrying value reflects our pro rata ownership percentage as indicated by NAV in the unconsolidated affiliate’s financial statements, which we may adjust if we determine NAV is not calculated consistent with investment company fair value principles. The underlying investments of the unconsolidated affiliates may have significant unobservable inputs, which may include, but are not limited to, comparable multiples and weighted average cost of capital rates applied in valuation models or a discounted cash flow model. Additionally, management inquires quarterly with the general partner to determine whether any credit or other market events have occurred since prior period financial statements to ensure any material events are properly included in current period valuation and investment income. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment. When a determination is made to classify an asset or liability within Level 3 of the fair value hierarchy, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement. Because certain securities trade in less liquid or illiquid markets with limited or no pricing information, the determination of fair value for these securities is inherently more difficult. In addition to the unobservable inputs, Level 3 fair value investments may include observable components, which are components that are actively quoted or can be validated to market-based sources. 145 Our assets and liabilities measured and carried at fair value on a recurring basis, summarized according to the hierarchy previously described, are as follows (in millions): December 31, 2024 Level 1 Level 2 Level 3 NAV Fair Value Assets Cash and cash equivalents $ 2,264 $ — $ — $ — $ 2,264 Fixed maturity securities, available-for-sale: Asset-backed securities — 7,506 8,143 — 15,649 Commercial mortgage-backed securities — 5,131 — — 5,131 Corporates 41 17,496 2,941 — 20,478 Hybrids 35 546 — — 581 Municipals — 1,346 — — 1,346 Residential mortgage-backed securities — 2,785 3 — 2,788 U.S. Government 158 — — — 158 Foreign Governments — 182 4 — 186 Preferred securities 119 144 7 — 270 Equity securities 88 — — 57 145 Derivative investments — 789 3 — 792 Investment in unconsolidated affiliates — — 272 — 272 Other long-term investments — — 32 32 Short term investments 2,355 18 37 — 2,410 Loan receivable, included in Prepaid expenses and other assets — — 11 — 11 Reinsurance related embedded derivative, included in Prepaid expenses and other assets — 109 — — 109 Market risk benefits asset — — 189 — 189 Total financial assets at fair value $ 5,060 $ 36,052 $ 11,642 $ 57 $ 52,811 Liabilities Derivatives: Indexed annuities/ IUL embedded derivatives, included in Contractholder funds $ — $ — $ 5,220 $ — $ 5,220 Interest rate swaps, included in Accounts payable and accrued liabilities — 10 — — 10 Contingent consideration, included in Accounts payable and accrued liabilities — — 74 — 74 Market risk benefits liability — — 549 — 549 Total financial liabilities at fair value $ — $ 10 $ 5,843 $ — $ 5,853 146 December 31, 2023 Level 1 Level 2 Level 3 NAV Fair Value Assets Cash and cash equivalents $ 1,563 $ — $ — $ — $ 1,563 Fixed maturity securities, available-for-sale: Asset-backed securities — 7,212 7,122 — 14,334 Commercial mortgage-backed securities — 4,392 18 — 4,410 Corporates — 14,609 1,970 — 16,579 Hybrids 95 523 — — 618 Municipals — 1,518 49 — 1,567 Residential mortgage-backed securities — 2,421 3 — 2,424 U.S. Government 261 — — — 261 Foreign Governments — 210 16 — 226 Preferred securities 152 310 7 — 469 Equity securities 78 — — 59 137 Derivative investments — 740 57 — 797 Investment in unconsolidated affiliates — — 285 — 285 Other long-term investments — — 37 — 37 Short-term investments 1,444 8 — — 1,452 Reinsurance related embedded derivative, included in Prepaid expenses and other assets — 152 — — 152 Market risk benefits asset — — 88 — 88 Total financial assets at fair value $ 3,593 $ 32,095 $ 9,652 $ 59 $ 45,399 Liabilities Derivatives: Indexed annuities/ IUL embedded derivatives, included in Contractholder funds $ — $ — $ 4,258 $ — $ 4,258 Market risk benefits liability — — 403 — 403 Total financial liabilities at fair value $ — $ — $ 4,661 $ — $ 4,661 Valuation Methodologies Cash and Cash Equivalents The carrying amounts reported in the Consolidated Balance Sheets for these instruments approximate fair value. Fixed Maturity, Preferred and Equity Securities We measure the fair value of our securities based on assumptions used by market participants in pricing the security. The most appropriate valuation methodology is selected based on the specific characteristics of the fixed maturity, preferred or equity security, and we will then consistently apply the valuation methodology to measure the security’s fair value. Our fair value measurement is based on a market approach, which utilizes prices and other relevant information generated by market transactions involving identical or comparable securities. Sources of inputs to the market approach include third-party pricing services, independent broker quotations, or pricing matrices. We use observable and unobservable inputs in our valuation methodologies. Observable inputs include benchmark yields, reported trades, broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. In addition, market indicators and industry and economic events are monitored and further market data will be acquired when certain thresholds are met. For certain security types, additional inputs may be used, or some of the inputs described above may not be applicable. The significant input used in the fair value measurement of equity securities for which the market approach valuation technique is employed is yield for comparable securities. Increases or decreases in the yields would result in lower or higher, respectively, fair value measurements. For broker-quoted only securities, quotes 147 from market makers or broker-dealers are obtained from sources recognized to be market participants. We believe the broker quotes are prices at which trades could be executed based on historical trades executed at broker-quoted or slightly higher prices. We analyze the third-party valuation methodologies and related inputs to perform assessments to determine the appropriate level within the fair value hierarchy. However, we did not adjust prices received from third parties as of December 31, 2024 or 2023. Certain equity investments are measured using NAV as a practical expedient in determining fair value. Derivative Financial Instruments Our call options and put options (together referred to as “equity options”), futures contracts, and interest rate swaps can either be exchange traded or over the counter. Exchange traded derivatives typically fall within Level 1 of the fair value hierarchy if there is active trading activity. Two methods are used to value over-the-counter derivatives. When required inputs are available, certain derivatives are valued using valuation pricing models, which represent what we would expect to receive or pay at the balance sheet date if we cancelled or exercised the derivative or entered into offsetting positions. Valuation models require a variety of inputs, which include the use of market-observable inputs, including interest rate, yield curve volatilities, and other factors. These over-the-counter derivatives are typically classified within Level 2 of the fair value hierarchy as the majority trade in liquid markets, we can verify model inputs and model selection does not involve significant management judgment. When inputs aren’t available for valuation models, certain over-the-counter derivatives are valued using independent broker quotes, which are based on unobservable market data and classified within Level 3. Effective September 30, 2024, pricing for certain derivatives was obtained from internal models using substantially all market observable inputs, and those derivatives were transferred out of Level 3 to Level 2. The fair value of the reinsurance-related embedded derivatives in our funds withheld reinsurance agreements are estimated based upon the fair value of the assets supporting the funds withheld from reinsurance liabilities. The fair value of the assets is based on a quoted market price of similar assets (Level 2), and therefore the fair value of the embedded derivative is based on market-observable inputs and classified as Level 2. The fair value measurement of the indexed annuities/IUL embedded derivatives included in contractholder funds is determined through a combination of market observable information and significant unobservable inputs using the option budget method. The market observable inputs are the market value of option and treasury rates. The significant unobservable inputs are the budgeted option cost (i.e., the expected cost to purchase equity options in future periods to fund the equity indexed linked feature), surrender rates, mortality multiplier and non-performance spread. The mortality multiplier at December 31, 2024 and 2023 was applied to the 2012 Individual Annuity mortality tables. Increases or decreases in the market value of an option in isolation would result in a higher or lower, respectively, fair value measurement. Increases or decreases in treasury rates, mortality multiplier, surrender rates, or non-performance spread in isolation would result in a lower or higher fair value measurement, respectively. Generally, a change in any one unobservable input would not directly result in a change in any other unobservable input. Also refer to Management's Estimates in Note A - Business and Summary of Significant Accounting Policies regarding certain assumption updates. Investments in Unconsolidated affiliates We have elected the fair value option for certain investments in unconsolidated affiliates as we believe this better aligns them with other investments in unconsolidated affiliates that are measured using NAV as a practical expedient in determining fair value. Investments measured using the fair value option are included in Level 3 and the fair values of these investments are determined using a multiple of the affiliates’ EBITDA. The EBITDA is based on the affiliates’ financial information. The multiple is derived from market analysis of transactions involving comparable companies. The inputs are considered unobservable, as not all market participants have access to this data. 148 Other Long-term Investments We hold a fund-linked note, which provides for an additional payment at maturity based on the value of an embedded derivative based on the actual return of a dedicated return fund. Fair value of the embedded derivative is based on an unobservable input, the NAV of the fund at the balance sheet date. The embedded derivative is similar to an equity option on the NAV of the fund with a strike price of zero since we will not be required to make any additional payments at maturity of the fund-linked note in order to receive the NAV of the fund on the maturity date. A Black-Scholes model determines the NAV of the fund as the fair value of the equity option regardless of the values used for the other inputs to the option pricing model. The NAV of the fund is provided by the fund manager at the end of each calendar month and represents the value an investor would receive if it withdrew its investment on the balance sheet date. Therefore, the key unobservable input used in the Black-Scholes model is the value of the fund. As the value of the fund increases or decreases, the fair value of the embedded derivative will increase or decrease. See further discussion on the available-for-sale embedded derivative in Note D - Derivative Financial Instruments . The fair value of the credit-linked note is based on a weighted average of a broker quote and a discounted cash flow analysis. The discounted cash flow approach is based on the expected portfolio cash flows and amortization schedule reflecting investment expectations, adjusted for assumptions on the portfolio's default and recovery rates, and the note's discount rate. The fair value of the note is provided by the fund manager at the end of each quarter. Short-term Investments The carrying amounts reported in the Consolidated Balance Sheets for these instruments approximate fair value. Certain short-term investments are valued based on third-party pricing services or broker quotes and are classified as Level 2 or 3. Loan receivable Concurrent with the Roar purchase agreement, we executed a separate loan agreement with the sellers of Roar. The loan is collateralized by the sellers’ minority equity stake in Roar. The loan receivable is measured at fair value using a discounted cash flow model applied using a Monte Carlo simulation of estimated cash flows at each measurement period and for each simulated path relative to the estimated collateral value. The Monte Carlo simulation utilizes the outstanding principal balance, a risk-adjusted discount rate, and risk-free rates to discount the expected cash flows and compare to the estimated collateral value for each payment period and simulated path. The discounted cash flow approach applies a company-specific discount rate to future expected interest and payoff payments to calculate the estimated fair value based on the average outcome from the simulation. This loan receivable is included in Level 3 and the inputs are considered unobservable, as not all market participants have access to this data. Market Risk Benefits MRBs (inclusive of reinsured MRBs) are measured at fair value using an attributed fee measurement approach where attributed fees are explicit rider charges collectible from the policyholder (or paid to the reinsurer) used to cover the excess benefits. The fair value is calculated using a risk neutral valuation method and is based on current net amounts at risk, market data, internal and industry experience, and other factors. The balances are computed using assumptions including mortality, full and partial surrender, rider benefit utilization, risk-free rates including non-performance spread and risk margin, market value of options and economic scenarios. Policyholder behavior assumptions are reviewed at least annually, typically in the third quarter, for any revisions. Reinsured MRBs are valued using a methodology consistent with direct MRBs, with the exception of the non-performance spread which reflects the credit of the reinsurer. See further discussion on MRBs in Note G - Market Risk Benefits . 149 Contingent Consideration The contingent consideration is measured at fair value using a discounted cash flow model applied using a Monte Carlo simulation of estimated EBITDA at each measurement period and for each simulated path relative to contractual EBITDA milestones. The Monte Carlo simulation utilizes a risk-adjusted discount rate, volatility assumption, and risk-free rates to assess the probability Roar's EBITDA trajectory reaches required milestones for the earn out payments to be made. The discounted cash flow approach applies a company-specific discount rate based on F&G credit profile to future expected earn out payments to calculate the estimated fair value based on the average outcome from the simulation. See further discussion on the contingent consideration in Note N - Commitments and Contingencies. Quantitative information regarding significant unobservable inputs used for recurring Level 3 fair value measurements of financial instruments carried at fair value as of December 31, 2024 and 2023, excluding assets and liabilities for which significant quantitative unobservable inputs are not developed internally and not readily available to the Company (primarily those valued using broker quotes and certain third-party pricing services) are as follows (in millions): December 31, 2024 Fair Value Valuation Technique Unobservable Input(s) Range (Weighted average) Assets Fixed maturity securities, available-for-sale: Asset-backed securities $ 95 Third-Party Valuation Discount Rate 4.83 % - 7.15 % ( 6.33 %) Corporates 750 Third-Party Valuation Discount Rate 2.00 % - 22.53 % ( 6.76 %) Residential mortgage-backed securities 3 Third-Party Valuation Discount Rate 5.89 % - 5.89 % ( 5.89 %) Foreign governments 4 Third-Party Valuation Discount Rate 12.14 % - 12.14 % ( 12.14 %) Investment in unconsolidated affiliates 272 Market Comparable Company Analysis EBITDA Multiple 8.7 x - 23.6 x ( 14.6 x) Other long-term investments: Available-for-sale embedded derivative 32 Black Scholes Model Market Value of AnchorPath Fund 100.00 % Prepaid expenses and other assets: Loan receivable 11 Discounted Cash Flow Risk-Adjusted Discount Rate 7.22 % - 7.22 % ( 7.22 %) Collateral Volatility 35.00 % - 35.00 % ( 35.00 %) Market risk benefits asset 189 Discounted Cash Flow Mortality 80.00 % - 115.00 % ( 100.00 %) Surrender Rates 0.25 % - 30.00 % ( 5.05 %) Partial Withdrawal Rates 2.00 % - 24.39 % ( 2.48 %) Non-Performance Spread 0.48 % - 0.95 % ( 0.75 %) GMWB Utilization 50.00 % - 75.00 % ( 61.77 %) Total financial assets at fair value (a) $ 1,356 150 December 31, 2024 Fair Value Valuation Technique Unobservable Input(s) Range (Weighted average) Liabilities Derivatives: Indexed annuities/IUL embedded derivatives, included in Contractholder funds $ 5,220 Discounted Cash Flow Market Value of Option 0.00 % - 20.81 % ( 2.92 %) Mortality Multiplier 80.00 % - 115.00 % ( 100.00 %) Surrender Rates 0.25 % - 50.00 % ( 6.94 %) Partial Withdrawals 2.00 % - 35.71 % ( 2.72 %) Non-Performance Spread 0.48 % - 0.95 % ( 0.75 %) Option Cost 0.07 % - 5.70 % ( 2.68 %) Accounts payable and accrued liabilities: Contingent consideration 74 Discounted Cash Flow Risk-Adjusted Discount Rate 13.50 % - 13.50 % ( 13.50 %) EBITDA Volatility 35.00 % - 35.00 % ( 35.00 %) Counterparty Discount Rate 6.50 % - 6.50 % ( 6.50 %) Market risk benefits liability 549 Discounted Cash Flow Mortality 80.00 % - 115.00 % ( 100.00 %) Surrender Rates 0.25 % - 30.00 % ( 5.05 %) Partial Withdrawal Rates 2.00 % - 24.39 % ( 2.48 %) Non-Performance Spread 0.48 % - 0.95 % ( 0.75 %) GMWB Utilization 50.00 % - 75.00 % ( 61.77 %) Total financial liabilities at fair value $ 5,843 (a) Assets of $ 10,286 million for which significant quantitative unobservable inputs are not developed internally and not readily available to the Company (primarily those valued using broker quotes and certain third-party pricing services) are excluded from the respective totals in the table above. 151 December 31, 2023 Fair Value Valuation Technique Unobservable Input(s) Range (Weighted average) Assets Fixed maturity securities, available-for-sale: Asset-backed securities $ 57 Third-Party Valuation Discount Rate 5.09 % - 6.95 % ( 6.00 %) Corporates 787 Third-Party Valuation Discount Rate 0.00 % - 12.87 % ( 6.91 %) Municipals 32 Third-Party Valuation Discount Rate 6.25 % - 6.25 % ( 6.25 %) Residential mortgage-backed securities 3 Third-Party Valuation Discount Rate 5.46 % - 5.46 % ( 5.46 %) Foreign Governments 16 Third-Party Valuation Discount Rate 6.94 % - 7.68 % ( 7.45 %) Investment in unconsolidated affiliates 285 Market Comparable Company Analysis EBITDA Multiple 4.4 x - 31.8 x ( 23.2 x) Other long-term investments: Available-for-sale embedded derivative 28 Black Scholes Model Market Value of Fund 100.00 % Market risk benefits asset 88 Discounted Cash Flow Mortality 100.00 % - 100.00 % ( 100.00 %) Surrender Rates 0.25 % - 10.00 % ( 5.22 %) Partial Withdrawal Rates 0.00 % - 23.26 % ( 2.50 %) Non-Performance Spread 0.38 % - 1.10 % ( 0.96 %) GMWB Utilization 50.00 % - 60.00 % ( 50.81 %) Total financial assets at fair value (a) $ 1,296 Liabilities Derivatives: Indexed annuities/ IUL embedded derivatives, included in Contractholder funds $ 4,258 Discounted Cash Flow Market Value of Option 0.00 % - 18.93 % ( 2.63 %) Mortality Multiplier 100.00 % - 100.00 % ( 100.00 %) Surrender Rates 0.25 % - 70.00 % ( 6.83 %) Partial Withdrawals 2.00 % - 34.48 % ( 2.74 %) Non-Performance Spread 0.38 % - 1.10 % ( 0.96 %) Option Cost 0.07 % - 5.48 % ( 2.38 %) Market risk benefits liability 403 Discounted Cash Flow Mortality 100.00 % - 100.00 % ( 100.00 %) Surrender Rates 0.25 % - 10.00 % ( 5.22 %) Partial Withdrawal Rates 0.00 % - 23.26 % ( 2.50 %) Non-Performance Spread 0.38 % - 1.10 % ( 0.96 %) GMWB Utilization 50.00 % - 60.00 % ( 50.81 %) Total financial liabilities at fair value $ 4,661 (a) Assets of $ 8,356 million for which significant quantitative unobservable inputs are not developed internally and not readily available to the Company (primarily those valued using broker quotes and certain third-party pricing services) are excluded from the respective totals in the table above. 152 The following tables summarize changes to the Company’s financial instruments carried at fair value and classified within Level 3 of the fair value hierarchy for the years ended December 31, 2024 and 2023, respectively (in millions). The gains and losses below may include changes in fair value due in part to observable inputs that are a component of the valuation methodology. Year ended December 31, 2024 Balance at Beginning of Period Total Gains (Losses) for Assets and Losses for Liabilities Purchases Sales Settlements Net transfer In (Out) of Level 3 (a) Balance at End of Period Change in Unrealized Included in OCI Included in Earnings Included in AOCI Assets Fixed maturity securities available-for-sale: Asset-backed securities $ 7,122 $ 19 $ 128 $ 5,104 $ ( 2,825 ) $ ( 1,210 ) $ ( 195 ) $ 8,143 $ 130 Commercial mortgage-backed securities 18 — — 58 — — ( 76 ) — — Corporates 1,970 ( 2 ) 81 1,146 ( 97 ) ( 139 ) ( 18 ) 2,941 80 Municipals 49 — 1 — ( 50 ) — — — 1 Residential mortgage-backed securities 3 — — 1 — — ( 1 ) 3 — Foreign Governments 16 — ( 1 ) — — ( 11 ) — 4 ( 1 ) Preferred securities 7 — — — — — — 7 — Derivative investments 57 ( 50 ) 3 — — — ( 7 ) 3 1 Investment in unconsolidated affiliates (b) 285 79 — — — — ( 92 ) 272 — Other long-term investments: Available-for-sale embedded derivative 27 — 5 — — — — 32 5 Credit linked note 10 1 — — — ( 11 ) — — — Short term investments — — — 236 ( 190 ) ( 9 ) — 37 — Prepaid expenses and other assets: Loan receivable (c) — — — 11 — — — 11 — Subtotal assets at Level 3 fair value 9,564 $ 47 $ 217 $ 6,556 $ ( 3,162 ) $ ( 1,380 ) $ ( 389 ) 11,453 $ 216 Market risk benefits asset (d) 88 189 Total assets at Level 3 fair value $ 9,652 $ 11,642 Liabilities Derivatives: Indexed annuities/IUL embedded derivatives, included in Contractholder funds $ 4,258 $ 45 $ — $ 1,351 $ — $ ( 434 ) $ — $ 5,220 $ — Interest rate swaps — 28 — — — — ( 28 ) — — Accounts payable and accrued liabilities Contingent consideration (e) — 26 — 48 — — — 74 — Subtotal liabilities at Level 3 fair value 4,258 $ 99 $ — $ 1,399 $ — $ ( 434 ) $ ( 28 ) 5,294 — Market risk benefits liability (d) 403 549 Total liabilities at Level 3 fair value $ 4,661 $ 5,843 (a) The net transfers out of Level 3 during the year ended December 31, 2024 were exclusively to Level 2 with the exception of (b) below. (b) The transfer out of investments in unconsolidated affiliates reflects F&G’s majority acquisition of PALH on July 18, 2024. Refer to Note P - Acquisitions for details of the PALH majority acquisition. 153 (c) Purchases represent advances on the loan commitment to Roar. Refer to Note N - Commitments and Contingencies for further details. (d) Refer to Note G - Market Risk Benefits for roll forward activity of the net Market Risk Benefits Asset and Liability. (e) The initial contingent consideration recorded in the Roar transaction is included in purchases in the table above. Refer to Note P - Acquisitions for more information. Year ended December 31, 2023 Balance at Beginning of Period Total Gains (Losses) for Assets and Losses for Liabilities Purchases Sales Settlements Net transfer In (Out) of Level 3 (a) Balance at End of Period Change in Unrealized Included in OCI Included in Earnings Included in AOCI Assets Fixed maturity securities available-for-sale: Asset-backed securities $ 6,263 $ ( 53 ) $ 186 $ 1,830 $ ( 125 ) $ ( 738 ) $ ( 241 ) $ 7,122 $ 185 Commercial mortgage-backed securities 37 — 2 22 — — ( 43 ) 18 2 Corporates 1,427 ( 2 ) ( 21 ) 652 — ( 94 ) 8 1,970 ( 20 ) Municipals 29 — 20 — — — — 49 20 Residential mortgage-backed securities 302 1 7 32 — ( 9 ) ( 330 ) 3 7 Foreign Governments 16 — — — — — — 16 — Preferred securities — — 1 — — — 6 7 1 Derivative investments — 57 — — — — — 57 — Investment in unconsolidated affiliates 23 13 — 249 — — — 285 — Other long-term investments: Available-for-sale embedded derivative 23 — 4 — — — — 27 4 Credit linked note 15 — — — — ( 5 ) — 10 — Secured borrowing receivable 10 — — — — ( 10 ) — — — Short term investments — — — 204 ( 19 ) ( 185 ) — — — Subtotal assets at Level 3 fair value 8,145 $ 16 $ 199 $ 2,989 $ ( 144 ) $ ( 1,041 ) $ ( 600 ) 9,564 $ 199 Market risk benefits asset (b) 117 88 Total assets at Level 3 fair value $ 8,262 $ 9,652 Liabilities Derivatives: Indexed annuities/IUL embedded derivatives, included in Contractholder funds $ 3,115 $ 257 $ — $ 1,049 $ — $ ( 163 ) $ — $ 4,258 $ — Subtotal liabilities at Level 3 fair value 3,115 $ 257 $ — $ 1,049 $ — $ ( 163 ) $ — 4,258 $ — Market risk benefits liability (b) 282 403 Total liabilities at Level 3 fair value $ 3,397 $ 4,661 (a) The net transfers out of Level 3 during the year ended December 31, 2023 were exclusively to Level 2. (b) Refer to Note G - Market Risk Benefits for roll forward activity of the net Market Risk Benefits Asset and Liability. Valuation Methodologies and Associated Inputs for Financial Instruments Not Carried at Fair Value The following discussion outlines the methodologies and assumptions used to determine the fair value of our financial instruments not carried at fair value. Considerable judgment is required to develop these assumptions used to measure fair value. Accordingly, the estimates shown are not necessarily indicative of the amounts that would be realized in a one-time, current market exchange of all of our financial instruments. 154 Mortgage Loans The fair value of mortgage loans is established using a discounted cash flow method based on internal credit rating, maturity and future income. This yield-based approach is sourced from our third-party vendor. The internal ratings for mortgages in good standing are based on property type, location, market conditions, occupancy, debt service coverage, loan-to-value, quality of tenancy, borrower, and payment record. The inputs used to measure the fair value of our mortgage loans are classified as Level 3 within the fair value hierarchy. Investments in Unconsolidated affiliates The fair value of investments in unconsolidated affiliates is primarily determined using NAV as a practical expedient. As discussed in Note A - Business and Summary of Significant Accounting Policies, recognition of income and adjustments to the carrying amount are delayed due to the availability of the related financial statements, which are obtained from the general partner generally on a one to three-month delay. Policy Loans Policy loans are reported at the unpaid principal balance and are fully collateralized by the cash surrender value of underlying insurance policies. The carrying value of the policy loans approximates the fair value and are classified as Level 3 in the fair value hierarchy. Company Owned Life Insurance Company owned life insurance (“COLI”) is a life insurance program used to finance certain employee benefit expenses. The fair value of COLI is based on net realizable value, which is generally cash surrender value. COLI is classified as Level 3 within the fair value hierarchy. Investment Contracts Investment contracts include deferred annuities (indexed annuities and fixed rate annuities), IUL policies, funding agreements and PRT and immediate annuity contracts without life contingencies. The indexed annuities/ IUL embedded derivatives, included in contractholder funds, are excluded as they are carried at fair value. The fair value of the deferred annuities (indexed annuities and fixed rate annuities) and IUL contracts is based on their cash surrender value (i.e., the cost the Company would incur to extinguish the liability) as these contracts are generally issued without an annuitization date. The fair value of funding agreements and PRT and immediate annuity contracts without life contingencies is derived by calculating a new fair value interest rate using the updated yield curve and treasury spreads as of the respective reporting date. The Company is not required to, and has not, estimated the fair value of the liabilities under contracts that involve significant mortality or morbidity risks, as these liabilities fall within the definition of insurance contracts that are exceptions from financial instruments that require disclosures of fair value. Other FHLB common stock is carried at cost, which approximates fair value. The carrying amount of FHLB common stock represents the value it can be sold back to the FHLB and is classified as Level 2 within the hierarchy. Notes Payable The fair value of notes payable, with the exception of the Revolving Credit Facility, is based on quoted market prices of debt with similar credit risk and tenor. The inputs used to measure the fair value of these notes payable results in a Level 2 classification within the fair value hierarchy. 155 The carrying value of the revolving credit facility approximates fair value as the rates are comparable to those at which we could currently borrow under similar terms. As such, the fair value of the revolving credit facility was classified as a Level 2 measurement. At December 31, 2024 and 2023, the outstanding balance on the revolving credit facility was $ 0 and $ 365 million, respectively. The following tables provide the carrying value and estimated fair value of our financial instruments that are carried on the Consolidated Balance Sheets at amounts other than fair value, summarized according to the fair value hierarchy previously described (in millions). December 31, 2024 Level 1 Level 2 Level 3 NAV Total Estimated Fair Value Carrying Amount Assets FHLB common stock $ — $ 153 $ — $ — $ 153 $ 153 Commercial mortgage loans — — 2,404 — 2,404 2,705 Residential mortgage loans — — 2,916 — 2,916 3,221 Investments in unconsolidated affiliates — — 5 3,288 3,293 3,293 Policy loans — — 104 — 104 104 Company-owned life insurance — — 395 — 395 395 Total $ — $ 153 $ 5,824 $ 3,288 $ 9,265 $ 9,871 Liabilities Investment contracts, included in contractholder funds $ — $ — $ 46,339 $ — $ 46,339 $ 51,184 Notes payable — 2,228 — — 2,228 2,171 Total $ — $ 2,228 $ 46,339 $ — $ 48,567 $ 53,355 December 31, 2023 Level 1 Level 2 Level 3 NAV Total Estimated Fair Value Carrying Amount Assets FHLB common stock $ — $ 138 $ — $ — $ 138 $ 138 Commercial mortgage loans — — 2,253 — 2,253 2,538 Residential mortgage loans — — 2,545 — 2,545 2,798 Investments in unconsolidated affiliates — — 7 2,779 2,786 2,786 Policy loans — — 71 — 71 71 Company-owned life insurance — — 362 — 362 362 Total $ — $ 138 $ 5,238 $ 2,779 $ 8,155 $ 8,693 Liabilities Investment contracts, included in contractholder funds $ — $ — $ 40,229 $ — $ 40,229 $ 44,540 Notes payable — 1,777 — — 1,777 1,754 Total $ — $ 1,777 $ 40,229 $ — $ 42,006 $ 46,294 For investments for which NAV is used, we do not have any significant restrictions in our ability to liquidate our positions in these investments, other than obtaining general partner approval, nor do we believe it is probable a price less than NAV would be received in the event of a liquidation. We review the fair value hierarchy classifications each reporting period. Changes in the observability of the valuation attributes may result in a reclassification of certain financial assets or liabilities. Such reclassifications are reported as transfers in and out of Level 3, or between other levels, at the beginning fair value for the reporting period in which the changes occur. The transfers into and out of Level 3 were related to changes in the primary pricing source and changes in the observability of external information used in determining the fair value. 156 Note C - Investments Our investments in fixed maturity securities have been designated as AFS and are carried at fair value, net of allowance for expected credit losses, with unrealized gains and losses included within AOCI, net of deferred income taxes. Our preferred and equity securities investments are carried at fair value with unrealized gains and losses included in net earnings. The Company’s consolidated investments are summarized as follows (in millions): December 31, 2024 Amortized Cost Allowance for Expected Credit Losses Gross Unrealized Gains Gross Unrealized Losses Fair Value AFS securities Asset-backed securities $ 15,777 $ ( 13 ) $ 202 $ ( 317 ) $ 15,649 Commercial mortgage-backed securities 5,327 ( 49 ) 53 ( 200 ) 5,131 Corporates 23,177 — 103 ( 2,802 ) 20,478 Hybrids 604 — 6 ( 29 ) 581 Municipals 1,592 — 3 ( 249 ) 1,346 Residential mortgage-backed securities 2,861 — 32 ( 105 ) 2,788 U.S. Government 160 — 1 ( 3 ) 158 Foreign Governments 231 — — ( 45 ) 186 Total AFS securities $ 49,729 $ ( 62 ) $ 400 $ ( 3,750 ) $ 46,317 December 31, 2023 Amortized Cost Allowance for Expected Credit Losses Gross Unrealized Gains Gross Unrealized Losses Fair Value AFS securities Asset-backed securities $ 14,623 $ ( 11 ) $ 191 $ ( 469 ) $ 14,334 Commercial mortgage-backed securities 4,732 ( 22 ) 23 ( 323 ) 4,410 Corporates 18,780 — 178 ( 2,379 ) 16,579 Hybrids 668 — 3 ( 53 ) 618 Municipals 1,776 — 14 ( 223 ) 1,567 Residential mortgage-backed securities 2,501 ( 2 ) 29 ( 104 ) 2,424 U.S. Government 258 — 4 ( 1 ) 261 Foreign Governments 263 — 2 ( 39 ) 226 Total AFS securities $ 43,601 $ ( 35 ) $ 444 $ ( 3,591 ) $ 40,419 Securities held on deposit with various state regulatory authorities had a fair value of $ 866 million at December 31, 2024 and was immaterial at December 31, 2023. As of December 31, 2024 and 2023, the Company held $ 32 million and $ 47 million, respectively, of investments that were non-income producing for a period greater than twelve months. As of December 31, 2024 and 2023, the Company's accrued interest receivable balance, excluding accrued interest receivable balances related to mortgage loans discussed below under “ Mortgage Loans, ” was $ 465 million and $ 438 million , respectively. Accrued interest receivable is classified within Prepaid expenses and other assets within the Consolidated Balance Sheets. In accordance with our FHLB agreements, the investments supporting the funding agreement liabilities are pledged as collateral to secure the FHLB funding agreement liabilities and are not available to us for general purposes. The collateral investments had a fair value of $ 4,289 million and $ 4,345 million as of December 31, 2024 and 2023, respectively. 157 The amortized cost and fair value of fixed maturity securities by contractual maturities, as applicable, are shown below (in millions). Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. December 31, 2024 Amortized Cost Fair Value Corporates, Non-structured Hybrids, Municipal, Foreign and U.S. Government Securities: Due in one year or less $ 525 $ 524 Due after one year through five years 3,634 3,589 Due after five years through ten years 4,930 4,756 Due after ten years 16,675 13,880 Subtotal 25,764 22,749 Other securities, which provide for periodic payments: Asset-backed securities 15,777 15,649 Commercial mortgage-backed securities 5,327 5,131 Residential mortgage-backed securities 2,861 2,788 Subtotal 23,965 23,568 Total fixed maturity AFS securities $ 49,729 $ 46,317 Allowance for Current Expected Credit Loss We regularly review AFS securities for declines in fair value that we determine to be credit related. For our fixed maturity securities, we generally consider the following in determining whether our unrealized losses are credit related, and if so, the magnitude of the credit loss: • The extent to which the fair value is less than the amortized cost basis; • The reasons for the decline in value (credit event, currency or interest-rate related, including general credit spread widening); • The financial condition of and near-term prospects of the issuer (including issuer's current credit rating and the probability of full recovery of principal based upon the issuer's financial strength); • Current delinquencies and non-performing assets of underlying collateral; • Expected future default rates; • Collateral value by vintage, geographic region, industry concentration or property type; • Subordination levels or other credit enhancements as of the balance sheet date as compared to origination; and • Contractual and regulatory cash obligations and the issuer's plans to meet such obligations. We recognize an allowance for current expected credit losses on fixed maturity securities in an unrealized loss position when it is determined, using the factors discussed above, a component of the unrealized loss is related to credit. We measure the credit loss using a discounted cash flow model that utilizes the single best estimate cash flow and the recognized credit loss is limited to the total unrealized loss on the security (i.e., the fair value floor). Cash flows are discounted using the implicit yield of bonds at their time of purchase and the current book yield for asset and mortgage backed securities as well as variable rate securities. We recognize the expected credit losses in Recognized gains and (losses), net in the Consolidated Statements of Operations, with an offset for the amount of non-credit impairments recognized in AOCI. We do not measure a credit loss allowance on accrued investment income because we write-off accrued interest through Interest and investment income when collectability concerns arise. We consider the following in determining whether write-offs of a security’s amortized cost are necessary: • We believe amounts related to securities have become uncollectible; • We intend to sell a security; or • It is more likely than not that we will be required to sell a security prior to recovery. 158 If we intend to sell a fixed maturity security or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis and the fair value of the security is below amortized cost, we will write down the security to current fair value, with a corresponding charge, net of any amount previously recognized as an allowance for expected credit loss, to Recognized gains and (losses), net in the Consolidated Statements of Operations. If we do not intend to sell a fixed maturity security or it is more likely than not that we will not be required to sell a fixed maturity security before recovery of its amortized cost basis but believe amounts related to a security are uncollectible, an impairment is deemed to have occurred and the amortized cost is written down to the estimated recovery value with a corresponding charge, net of any amount previously recognized as an allowance for expected credit loss, to Recognized gains and (losses), net in the Consolidated Statements of Operations. The remainder of unrealized loss is held in AOCI in the Consolidated Statements of Equity. The activity in the allowance for expected credit losses of AFS securities aggregated by investment category was as follows (in millions): Year ended December 31, 2024 Additions Reductions Balance at Beginning of Period For credit losses on securities for which losses were not previously recorded (Additions) reductions in allowance recorded on previously impaired securities For securities sold during the period For securities intended/required to be sold prior to recovery of amortized cost basis Write offs charged against the allowance Recoveries of amounts previously written off Balance at End of Period AFS securities Asset-backed securities $ ( 11 ) $ ( 2 ) $ — $ — $ — $ — $ — $ ( 13 ) Commercial mortgage-backed securities ( 22 ) ( 8 ) ( 19 ) — — — — ( 49 ) Residential mortgage-backed securities ( 2 ) — 2 — — — — — Total AFS securities $ ( 35 ) $ ( 10 ) $ ( 17 ) $ — $ — $ — $ — $ ( 62 ) Year ended December 31, 2023 Additions Reductions Balance at Beginning of Period For credit losses on securities for which losses were not previously recorded (Additions) reductions in allowance recorded on previously impaired securities For securities sold during the period For securities intended/required to be sold prior to recovery of amortized cost basis Write offs charged against the allowance Recoveries of amounts previously written off Balance at End of Period AFS securities Asset-backed securities $ ( 8 ) $ ( 18 ) $ 15 $ — $ — $ — $ — $ ( 11 ) Commercial mortgage-backed securities ( 1 ) ( 22 ) 1 — — — — ( 22 ) Corporates ( 15 ) — — 15 — — — — Residential mortgage-backed securities ( 7 ) ( 7 ) 12 — — — — ( 2 ) Total AFS securities $ ( 31 ) $ ( 47 ) $ 28 $ 15 $ — $ — $ — $ ( 35 ) There were no purchases of purchased credit deteriorated AFS securities during the years ended December 31, 2024 and 2023. 159 The fair value and gross unrealized losses of AFS securities, excluding securities in an unrealized loss position with an allowance for expected credit loss, aggregated by investment category and duration of fair value below amortized cost as of December 31, 2024 and 2023 were as follows (dollars in millions): December 31, 2024 Less than 12 months 12 months or longer Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses AFS securities Asset-backed securities $ 1,164 $ ( 30 ) $ 2,637 $ ( 276 ) $ 3,801 $ ( 306 ) Commercial mortgage-backed securities 699 ( 10 ) 1,508 ( 175 ) 2,207 ( 185 ) Corporates 6,524 ( 202 ) 9,234 ( 2,600 ) 15,758 ( 2,802 ) Hybrids 105 ( 4 ) 380 ( 25 ) 485 ( 29 ) Municipals 261 ( 12 ) 966 ( 237 ) 1,227 ( 249 ) Residential mortgage-backed securities 898 ( 16 ) 459 ( 89 ) 1,357 ( 105 ) U.S. Government 93 ( 2 ) 10 ( 1 ) 103 ( 3 ) Foreign Government 51 ( 1 ) 128 ( 44 ) 179 ( 45 ) Total AFS securities $ 9,795 $ ( 277 ) $ 15,322 $ ( 3,447 ) $ 25,117 $ ( 3,724 ) Total number of AFS securities in an unrealized loss position less than twelve months 1,838 Total number of AFS securities in an unrealized loss position twelve months or longer 2,113 Total number of AFS securities in an unrealized loss position 3,951 December 31, 2023 Less than 12 months 12 months or longer Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses AFS securities Asset-backed securities $ 1,707 $ ( 56 ) $ 5,835 $ ( 404 ) $ 7,542 $ ( 460 ) Commercial mortgage-backed securities 798 ( 53 ) 1,916 ( 234 ) 2,714 ( 287 ) Corporates 2,273 ( 128 ) 9,779 ( 2,251 ) 12,052 ( 2,379 ) Hybrids 60 ( 2 ) 483 ( 51 ) 543 ( 53 ) Municipals 392 ( 48 ) 884 ( 174 ) 1,276 ( 222 ) Residential mortgage-backed securities 334 ( 5 ) 660 ( 89 ) 994 ( 94 ) U.S. Government 5 — 9 ( 1 ) 14 ( 1 ) Foreign Government 25 ( 1 ) 145 ( 38 ) 170 ( 39 ) Total AFS securities $ 5,594 $ ( 293 ) $ 19,711 $ ( 3,242 ) $ 25,305 $ ( 3,535 ) Total number of AFS securities in an unrealized loss position less than twelve months 927 Total number of AFS securities in an unrealized loss position twelve months or longer 2,602 Total number of AFS securities in an unrealized loss position 3,529 We determined the unrealized losses were caused by higher treasury rates compared to those at the time of the FNF acquisition or the purchase of the security if later. For securities in an unrealized loss position as of December 31, 2024, our allowance for expected credit loss was $ 62 million. We believe the unrealized loss position for which we have not recorded an allowance for expected credit loss as of December 31, 2024 was primarily attributable to interest rate increases, near-term illiquidity, and other macroeconomic uncertainties as opposed to issuer specific credit concerns. 160 Mortgage Loans Our mortgage loans are collateralized by commercial and residential properties. Commercial Mortgage Loans Commercial mortgage loans (“CMLs”) represented approximately 5 % of our total investments as of December 31, 2024 and 2023. The mortgage loans in our investment portfolio, are generally comprised of high quality commercial first lien and mezzanine real estate loans. Mortgage loans are primarily on income producing properties including industrial properties, retail buildings, multifamily properties and office buildings. We diversify our CML portfolio by geographic region and property type to attempt to reduce concentration risk. We continuously evaluate CMLs based on relevant current information to ensure properties are performing at a consistent and acceptable level to secure the related debt. The distribution of CMLs, gross of valuation allowances, by property type and geographic region is reflected in the following tables (dollars in millions): December 31, 2024 December 31, 2023 Gross Carrying Value % of Total Gross Carrying Value % of Total Property Type: Hotel $ 17 1 % $ 18 1 % Industrial 657 24 616 24 Mixed Use 11 — 11 — Multifamily 1,006 37 1,012 40 Office 349 13 316 13 Retail 98 4 102 4 Student Housing 83 3 83 3 Other 501 18 392 15 Total CMLs, gross of valuation allowance 2,722 100 % 2,550 100 % Allowance for expected credit loss ( 17 ) ( 12 ) Total CMLs, net of valuation allowance $ 2,705 $ 2,538 U.S. Region: East North Central $ 98 4 % $ 151 6 % East South Central 75 3 75 3 Middle Atlantic 354 13 354 14 Mountain 409 15 352 14 New England 164 6 168 6 Pacific 706 26 766 30 South Atlantic 683 25 563 22 West North Central 62 2 4 — West South Central 171 6 117 5 Total CMLs, gross of valuation allowance 2,722 100 % 2,550 100 % Allowance for expected credit loss ( 17 ) ( 12 ) Total CMLs, net of valuation allowance $ 2,705 $ 2,538 CMLs segregated by aging of the loans and charge offs (by year of origination), gross of valuation allowances, were as follows for the years ended December 31, 2024 and 2023 (in millions): 161 December 31, 2024 Amortized Cost by Origination Year 2024 2023 2022 2021 2020 Prior Total Current (less than 30 days past due) $ 273 $ 227 $ 290 $ 1,253 $ 469 $ 201 $ 2,713 30-89 days past due — — — — — — — 90 days or more past due — — — — — 9 9 Total CMLs $ 273 $ 227 $ 290 $ 1,253 $ 469 $ 210 $ 2,722 Charge offs $ — $ — $ — $ — $ — $ — $ — December 31, 2023 Amortized Cost by Origination Year 2023 2022 2021 2020 2019 Prior Total Current (less than 30 days past due) $ 213 $ 288 $ 1,256 $ 512 $ — $ 259 $ 2,528 30-89 days past due — — — — — — — 90 days or more past due — — — — — — — Total CMLs (a) $ 213 $ 288 $ 1,256 $ 512 $ — $ 259 $ 2,528 Charge offs $ — $ — $ — $ — $ — $ 3 $ 3 (a) Excludes loans under development with an amortized cost and estimated fair value of $ 22 million at December 31, 2023. LTV and DSC ratios are measures commonly used to assess the risk and quality of mortgage loans. The LTV ratio is expressed as a percentage of the amount of the loan relative to the value of the underlying property. A LTV ratio in excess of 100% indicates the unpaid loan amount exceeds the underlying collateral. The DSC ratio, based upon the most recently received financial statements, is expressed as a percentage of the amount of a property’s net income to its debt service payments. A DSC ratio of less than 1.00 indicates that a property’s operations do not generate sufficient income to cover debt payments. We normalize our DSC ratios to a 25 -year amortization period for purposes of our general loan allowance evaluation. The following tables present the recorded investment in CMLs by LTV and DSC ratio categories and estimated fair value by the indicated loan-to-value ratios, gross of valuation allowances at December 31, 2024 and 2023 (dollars in millions) : Debt-Service Coverage Ratios Total Amount % of Total Estimated Fair Value % of Total >1.25 1.00 - 1.25 <1.00 December 31, 2024 LTV Ratios: Less than 50.00% $ 490 $ 34 $ — $ 524 19 % $ 501 21 % 50.00% to 59.99% 803 112 12 927 34 826 34 60.00% to 74.99% 1,238 16 — 1,254 46 1,060 44 75.00% to 84.99% 4 4 9 17 1 17 1 CMLs $ 2,535 $ 166 $ 21 $ 2,722 100 % $ 2,404 100 % December 31, 2023 LTV Ratios: Less than 50.00% $ 519 $ 4 $ 10 $ 533 21 % $ 510 23 % 50.00% to 59.99% 764 — — 764 30 679 30 60.00% to 74.99% 1,160 56 — 1,216 48 1,028 46 75.00% to 84.99% — 6 9 15 1 14 1 CMLs (a) $ 2,443 $ 66 $ 19 $ 2,528 100 % $ 2,231 100 % (a) Excludes loans under development with an amortized cost and estimated fair value of $ 22 million at December 31, 2023. 162 December 31, 2024 Amortized Cost by Origination Year 2024 2023 2022 2021 2020 Prior Total LTV Ratios: Less than 50.00% $ 66 $ 99 $ 19 $ 74 $ 189 $ 77 $ 524 50.00% to 59.99% 112 53 149 321 159 133 927 60.00% to 74.99% 91 71 113 858 121 — 1,254 75.00% to 84.99% 4 4 9 — — — 17 Total CMLs $ 273 $ 227 $ 290 $ 1,253 $ 469 $ 210 2,722 DSCR Greater than 1.25x $ 140 $ 215 $ 278 $ 1,241 $ 469 $ 192 $ 2,535 1.00x - 1.25x 133 12 3 — — 18 166 Less than 1.00x — — 9 12 — — 21 Total CMLs $ 273 $ 227 $ 290 $ 1,253 $ 469 $ 210 $ 2,722 December 31, 2023 Amortized Cost by Origination Year 2023 2022 2021 2020 2019 Prior Total LTV Ratios: Less than 50.00% $ 85 $ 17 $ 77 $ 232 $ — $ 122 $ 533 50.00% to 59.99% 53 149 267 158 — 137 764 60.00% to 74.99% 69 113 912 122 — — 1,216 75.00% to 84.99% 6 9 — — — — 15 Total CMLs (a) $ 213 $ 288 $ 1,256 $ 512 $ — $ 259 $ 2,528 DSCR Greater than 1.25x $ 154 $ 276 $ 1,256 $ 512 $ — $ 245 $ 2,443 1.00x - 1.25x 59 3 — — — 4 66 Less than 1.00x — 9 — — — 10 19 Total CMLs (a) $ 213 $ 288 $ 1,256 $ 512 $ — $ 259 $ 2,528 (a) Excludes loans under development with an amortized cost and estimated fair value of $ 22 million at December 31, 2023. We recognize a mortgage loan as delinquent when payments on the loan are greater than 30 days past due. At December 31, 2024, we had one CML that was delinquent in principal or interest payments compared to none at December 31, 2023 as shown in the tables above. Residential Mortgage Loans Residential mortgage loans (“RMLs”) represented approximately 5 % of our total investments as of December 31, 2024 and 2023. Our RMLs are closed end, amortizing loans and 100 % of the properties are located in the United States. We diversify our RML portfolio by state to attempt to reduce concentration risk. The distribution of RMLs by state with highest-to-lowest concentration are reflected in the following tables, gross of valuation allowances (dollars in millions): December 31, 2024 U.S. States: Amortized Cost % of Total Florida $ 164 5 % All other states (a) 3,110 95 Total RMLs, gross of valuation allowance 3,274 100 % Allowance for expected credit loss ( 53 ) Total RMLs, net of valuation allowance $ 3,221 (a) The individual concentration of each state is less than 5% as of December 31, 2024. 163 December 31, 2023 U.S. States: Amortized Cost % of Total Florida $ 163 6 % New York 129 5 Texas 129 5 All other states (a) 2,431 84 Total RMLs, gross of valuation allowance 2,852 100 % Allowance for expected credit loss ( 54 ) Total RMLs, net of valuation allowance $ 2,798 (a) The individual concentration of each state is less than 5% as of December 31, 2023. RMLs have a primary credit quality indicator of either a performing or non-performing loan. We define non-performing residential mortgage loans as those that are 90 or more days past due or in non-accrual status, which is assessed monthly. The credit quality of RMLs was as follows (dollars in millions): December 31, 2024 December 31, 2023 Performance indicators: Amortized Cost % of Total Amortized Cost % of Total Performing $ 3,188 97 % $ 2,795 98 % Non-performing 86 3 57 2 Total RMLs, gross of valuation allowance 3,274 100 % 2,852 100 % Allowance for expected loan loss ( 53 ) ( 54 ) Total RMLs, net of valuation allowance $ 3,221 $ 2,798 There were no charge offs recorded for RMLs during the year ended December 31, 2024. RMLs segregated by aging of the loans (by year of origination) as of December 31, 2024 and 2023 were as follows, gross of valuation allowances (in millions): December 31, 2024 Amortized Cost by Origination Year 2024 2023 2022 2021 2020 Prior Total Current (less than 30 days past due) $ 610 $ 368 $ 911 $ 805 $ 162 $ 312 $ 3,168 30-89 days past due 1 6 4 6 1 3 21 90 days or more past due 3 2 13 29 13 25 85 Total RML mortgages $ 614 $ 376 $ 928 $ 840 $ 176 $ 340 $ 3,274 December 31, 2023 Amortized Cost by Origination Year 2023 2022 2021 2020 2019 Prior Total Current (less than 30 days past due) $ 373 $ 985 $ 854 $ 192 $ 183 $ 192 $ 2,779 30-89 days past due — 4 7 3 — 2 16 90 days or more past due — 6 16 13 21 1 57 Total RML mortgages $ 373 $ 995 $ 877 $ 208 $ 204 $ 195 $ 2,852 Non-accrual loans by amortized cost as of December 31, 2024 and 2023, were as follows (in millions): December 31, 2024 2023 Residential mortgage $ 85 $ 57 Commercial mortgage 9 — Total non-accrual mortgages $ 94 $ 57 Immaterial interest income was recognized on non-accrual financing receivables for the years ended December 31, 2024 and 2023. 164 It is our policy to cease to accrue interest on loans that are delinquent for 90 days or more. For loans less than 90 days delinquent, interest is accrued unless it is determined that the accrued interest is not collectible. If a loan becomes 90 days or more delinquent, it is our general policy to initiate foreclosure proceedings unless a workout arrangement to bring the loan current is in place. As of December 31, 2024 and 2023, we had $ 94 million and $ 57 million, respectively, of mortgage loans that were over 90 days past due. As of December 31, 2024 and 2023, we had $ 81 million and $ 41 million, respectively, of residential mortgage loans that were in the process of foreclosure. Loan Modifications Under certain circumstances, modifications are granted to mortgage loans. Generally, the types of concessions may include interest rate reduction, term extension, payment deferrals, principal forgiveness or a combination of these concessions. We had an immaterial amount of mortgage loans modified during the years ended December 31, 2024 and 2023. Allowance for Expected Credit Loss We estimate expected credit losses for our commercial and residential mortgage loan portfolios using a probability of default/loss given default model. Significant inputs to this model include, where applicable, the loans' current performance, underlying collateral type, location, contractual life, LTV, DSC and Debt to Income or FICO. The model projects losses using a two year reasonable and supportable forecast and then reverts over a three year period to market-wide historical loss experience. Changes in our allowance for expected credit losses on mortgage loans are recognized in Recognized gains and losses, net in the Consolidated Statements of Operations. The allowances for our mortgage loan portfolio are summarized as follows (in millions): Year Ended December 31, 2024 2023 Residential Mortgages Commercial Mortgages Total Residential Mortgages Commercial Mortgages Total Beginning Balance $ ( 54 ) $ ( 12 ) $ ( 66 ) $ ( 32 ) $ ( 10 ) $ ( 42 ) Provision (expense) benefit for loan losses 1 ( 5 ) ( 4 ) ( 22 ) ( 5 ) ( 27 ) Loans charged off — — — — 3 3 Ending Balance $ ( 53 ) $ ( 17 ) $ ( 70 ) $ ( 54 ) $ ( 12 ) $ ( 66 ) An allowance for expected credit loss is not measured on accrued interest income for commercial mortgage loans as we have a process to write-off interest on loans that enter into non-accrual status (90 days or more past due). Allowances for expected credit losses are measured on accrued interest income for residential mortgage loans and were immaterial as of December 31, 2024 and 2023. There were no purchases of purchased credit deteriorated mortgage loans during the years ended December 31, 2024 and 2023. As of December 31, 2024 and 2023, the accrued interest receivable balance on CMLs totaled $ 8 million and $ 7 million, respectively, and the accrued interest receivable on RMLs totaled $ 28 million and $ 24 million, respectively. Accrued interest receivable is classified within Prepaid expenses and other assets within the Consolidated Balance Sheets. 165 Interest and Investment Income The major sources of Interest and investment income reported on the Consolidated Statements of Operations were as follows (in millions): Year ended December 31, 2024 2023 2022 Fixed maturity securities, available-for-sale $ 2,181 $ 1,843 $ 1,431 Equity securities 21 20 17 Preferred securities 23 41 49 Mortgage loans 273 229 186 Invested cash and short-term investments 161 76 33 Limited partnerships 323 229 110 Other investments 32 27 20 Gross investment income 3,014 2,465 1,846 Investment expense ( 295 ) ( 254 ) ( 191 ) Interest and investment income $ 2,719 $ 2,211 $ 1,655 Interest and investment income is shown net of amounts attributable to certain funds withheld reinsurance agreements which is passed along to the reinsurer in accordance with the terms of these agreements. Interest and investment income attributable to these agreements, and thus excluded from the totals in the table above, was $ 636 million, $ 339 million and $ 109 million, for the years ended December 31, 2024, 2023 and 2022, respectively. Recognized Gains and (Losses), Net Details underlying Recognized gains and losses, net reported on the Consolidated Statements of Operations were as follows (in millions): Year ended December 31, 2024 2023 2022 Net realized (losses) gains on fixed maturity available-for-sale securities $ ( 8 ) $ ( 155 ) $ ( 241 ) Net realized/unrealized (losses) gains on equity securities (a) 11 18 ( 40 ) Net realized/unrealized (losses) gains on preferred securities (b) 6 2 ( 167 ) Realized (losses) gains on other invested assets 67 24 ( 13 ) Change in allowance for expected credit losses ( 34 ) ( 37 ) ( 34 ) Derivatives and embedded derivatives: Realized (losses) gains on certain derivative instruments 254 ( 211 ) ( 164 ) Unrealized (losses) gains on certain derivative instruments ( 184 ) 358 ( 693 ) Change in fair value of reinsurance related embedded derivatives ( 32 ) ( 128 ) 352 Change in fair value of other derivatives and embedded derivatives 4 5 ( 10 ) Realized (losses) gains on derivatives and embedded derivatives 42 24 ( 515 ) Recognized gains and losses, net $ 84 $ ( 124 ) $ ( 1,010 ) (a) Includes net valuation (losses) gains of $ 12 million, $ 18 million, and $( 40 ) million for the years ended December 31, 2024, 2023 and 2022, respectively. (b) Includes net valuation (losses) gains of $ 6 million, $ 73 million, and $( 159 ) million for the years ended December 31, 2024, 2023 and 2022, respectively. Recognized gains and (losses), net is shown net of amounts attributable to certain funds withheld reinsurance agreements which are passed along to the reinsurer in accordance with the terms of these agreements. Recognized gains and (losses) attributable to these agreements, and thus excluded from the totals in the table above, was $( 30 ) million, $( 123 ) million and $ 381 million for the years ended December 31, 2024, 2023 and 2022, respectively. The proceeds from the sale of fixed-maturity securities and the gross gains and losses associated with those transactions were as follows (in millions): 166 Year ended December 31, 2024 2023 2022 Proceeds $ 4,368 $ 2,590 $ 3,097 Gross gains 44 8 13 Gross losses ( 80 ) ( 134 ) ( 239 ) Unconsolidated Variable Interest Entities We own investments in VIEs that are not consolidated within our financial statements. A VIE is an entity that does not have sufficient equity to finance its own activities without additional financial support, where investors lack certain characteristics of a controlling financial interest, or where the entity is structured with non-substantive voting rights. VIEs are consolidated by their ‘primary beneficiary,’ a designation given to an entity that receives both the benefits from the VIE as well as the substantive power to make its key economic decisions. While we participate in the benefits from VIEs in which we invest, but do not consolidate, the substantive power to make the key economic decisions for each respective VIE resides with entities not under our common control. It is for this reason that we are not considered the primary beneficiary for the VIE investments that are not consolidated. We invest in various limited partnerships and limited liability companies primarily as a passive investor. These investments are primarily in credit funds with a bias towards current income, real assets, or private equity. Limited partnership and limited liability company interests are accounted for under the equity method and are included in Investments in unconsolidated affiliates on our Consolidated Balance Sheets. In addition, we invest in structured investments, which may be VIEs, but for which we are not the primary beneficiary. These structured investments typically invest in fixed income investments and are managed by third parties and include asset-backed securities, commercial mortgage-backed securities and residential mortgage-backed securities included in fixed maturity securities available for sale on our Consolidated Balance Sheets. Our maximum loss exposure with respect to these VIEs is limited to the investment carrying amounts reported in our Consolidated Balance Sheets for limited partnerships and the amortized costs of certain of our fixed maturity securities, in addition to any required unfunded commitments (also refer to Note N - Commitments and Contingencies ). The following table summarizes the carrying value and the maximum loss exposure of our unconsolidated VIEs as of December 31, 2024 and 2023 (in millions): December 31, 2024 2023 Carrying Value Maximum Loss Exposure Carrying Value Maximum Loss Exposure Investment in unconsolidated affiliates $ 3,565 $ 4,703 $ 3,071 $ 4,806 Fixed maturity securities 23,242 24,242 20,837 22,346 Total unconsolidated VIE investments $ 26,807 $ 28,945 $ 23,908 $ 27,152 Concentrations Our underlying investment concentrations that exceed 10% of shareholders equity as of December 31, 2024 and 2023 are as follows (in millions): December 31, 2024 2023 Blackstone Wave Asset Holdco (a) $ 710 $ 725 Blackstone Cooper Asset Holdco (a) 472 — Elba (b) (c) — 463 COLI (c) — 324 (a) Represents a special purpose vehicle that holds investments in numerous limited partnership investments whose underlying investments are further diversified by holding interest in multiple individual investments and industries. 167 (b) Represents special purpose vehicles that hold an underlying minority ownership interest in a single operating liquified natural gas export facility. (c) Investments did not exceed 10% of shareholder’s equity as of December 31, 2024. Note D - Derivative Financial Instruments The notional and carrying amounts of derivative instruments, including derivative instruments embedded in indexed annuities and IUL contracts, and reinsurance is as follows (in millions): December 31, 2024 December 31, 2023 Notional Amount Carrying Amount Notional Amount Carrying Amount Assets: Derivative investments: Equity options $ 29,594 $ 773 $ 27,263 $ 739 Interest rate swaps 2,340 16 2,705 57 Other derivative investments 157 3 137 1 Other long-term investments: Other embedded derivatives 32 28 Prepaid expenses and other assets: Reinsurance related embedded derivatives 109 152 Total $ 933 $ 977 Liabilities Contractholder funds: Indexed annuities/IUL embedded derivatives $ 5,220 $ 4,258 Accounts payable and accrued liabilities: Interest rate swaps $ 2,700 10 $ — — Total $ 5,230 $ 4,258 The change in fair value of derivative instruments included within Recognized gains and (losses), net, in the Consolidated Statements of Operations is as follows (in millions): Year ended December 31, 2024 2023 2022 Net investment gains (losses): Equity options $ 145 $ 92 $ ( 862 ) Interest rate swaps ( 103 ) 48 — Futures contracts 18 9 ( 7 ) Other derivative investments 10 ( 2 ) 12 Other embedded derivatives 4 5 ( 10 ) Reinsurance related embedded derivatives ( 32 ) ( 128 ) 352 Total net investment gains (losses) $ 42 $ 24 $ ( 515 ) Benefits and other changes in policy reserves: Indexed annuities/IUL embedded derivatives increase (decrease) $ 962 $ 1,143 $ ( 768 ) Additional Disclosures See descriptions of the fair value methodologies used for derivative financial instruments in Note B - Fair Value of Financial Instruments . 168 Indexed Annuities/IUL Embedded Derivative, Equity Options and Futures We have indexed annuities and IUL contracts that permit the holder to elect an interest rate return or an equity index linked component, where interest credited to the contracts is linked to the performance of various equity indices, such as the S&P 500 Index. This feature represents an embedded derivative under GAAP. The indexed annuities/IUL embedded derivatives are valued at fair value and included in the liability for contractholder funds in the Consolidated Balance Sheets with changes in fair value included as a component of Benefits and other changes in policy reserves in the Consolidated Statements of Operations. We purchase derivatives consisting of a combination of equity options and futures contracts (specifically for indexed annuity contracts) on the applicable market indices to fund the index credits due to indexed annuity/IUL contractholders. The equity options are one , two , three , five and six year options purchased to match the funding requirements of the underlying policies. On the respective anniversary dates of the indexed policies, the index used to compute the interest credit is reset and we purchase new equity options to fund the next index credit. We manage the cost of these purchases through the terms of our indexed annuities/IUL contracts, which permit us to change caps, spreads or participation rates, subject to guaranteed minimums, on each contract’s anniversary date. The change in the fair value of the equity options and futures contracts is generally designed to offset the portion of the change in the fair value of the indexed annuities/IUL embedded derivatives related to index performance through the current credit period. The equity options and futures contracts are marked to fair value with the change in fair value included as a component of Recognized gains and (losses), net, in the Consolidated Statements of Operations. The change in fair value of the equity options and futures contracts includes the gains and losses recognized at the expiration of the instrument term or upon early termination and the changes in fair value of open positions. Other market exposures are hedged periodically depending on market conditions and our risk tolerance. Our indexed annuities/IUL hedging strategy economically hedges the equity returns and exposes us to the risk that unhedged market exposures result in divergence between changes in the fair value of the liabilities and the hedging assets. We use a variety of techniques, including direct estimation of market sensitivities, to monitor this risk daily. We intend to continue to adjust the hedging strategy as market conditions and our risk tolerance changes. Interest Rate Swaps We utilize interest rate swaps to reduce market risks from interest rate changes on our earnings associated with our floating rate investments. With an interest rate swap, we agree with another party to exchange, at specified intervals, the difference between fixed-rate and floating-rate interest amounts tied to an agreed upon notional principal. The interest rate swaps are marked to fair value with the change in fair value, including accrued interest and related periodic cash flows received or paid, included as a component of Recognized gains and (losses), net, in the Consolidated Statements of Operations. Reinsurance Related Embedded Derivatives F&G cedes certain business on a coinsurance funds withheld basis. Investment results for the assets that support the coinsurances that are segregated within the funds withheld account are passed directly to the reinsurer pursuant to the contractual terms of the reinsurance agreement, which creates embedded derivatives considered to be total return swaps. These total return swaps are not clearly and closely related to the underlying reinsurance contract and thus require bifurcation. The fair value of the total return swaps is based on the change in fair value of the underlying assets held in the funds withheld account. These embedded derivatives are reported in Prepaid expenses and other assets if in a net gain position, or Accounts payable and accrued liabilities, if in a net loss position on the Consolidated Balance Sheets and the related gains or losses are reported in Recognized gains and (losses), net, on the Consolidated Statements of Operations. Credit Risk 169 We are exposed to credit loss in the event of non-performance by our counterparties and reflect assumptions regarding this non-performance risk in the fair value of our derivatives. The non-performance risk is the net counterparty exposure based on the fair value of the open contracts less collateral held. We maintain a policy of requiring all derivative contracts to be governed by an International Swaps and Derivatives Association (“ISDA”) Master Agreement. We manage credit risk related to non-performance by our counterparties by (i) entering into derivative transactions with creditworthy counterparties; (ii) obtaining collateral, such as cash and securities when appropriate; and (iii) establishing counterparty exposure limits, which are subject to periodic management review. Information regarding our exposure to credit loss on the derivative instruments we hold, excluding futures contracts, is presented below (in millions): Fair Value Collateral Net Credit Risk December 31, 2024 $ 782 $ 771 $ 34 December 31, 2023 796 775 39 Collateral Agreements We are required to maintain minimum ratings as a matter of routine practice as part of our over-the-counter derivative agreements on ISDA forms. Under some ISDA agreements, we have agreed to maintain certain financial strength ratings. A downgrade below these levels provides the counterparty under the agreement the right to terminate the open derivative contracts between the parties, at which time any amounts payable by us or the counterparty would be dependent on the market value of the underlying contracts. Our current rating does not allow any counterparty the right to terminate ISDA agreements. In certain transactions, both us and the counterparty have entered into a collateral support agreement requiring either party to post collateral when the net exposures exceed pre-determined thresholds. For all counterparties, except one , the threshold is set to zero . As of December 31, 2024 and 2023 counterparties posted collateral of $ 771 million and $ 775 million, respectively, of which $ 679 million and $ 588 million, respectively, is included in Cash and cash equivalents with an associated payable for this collateral included in Accounts payable and accrued liabilities on the Consolidated Balance Sheets. Accordingly, the maximum amount of loss due to credit risk that we would incur if parties to the derivatives failed completely to perform according to the terms of the contracts was $ 34 million at December 31, 2024 and $ 39 million at December 31, 2023. We are required to pay our counterparties the effective federal funds interest rate each day for cash collateral posted to us. Cash collateral is reinvested in overnight investment sweep products, which are included in Cash and cash equivalents on the Consolidated Balance Sheets, to reduce the interest cost. Changes in cash collateral are included in the Change in derivative collateral liabilities in the Consolidated Statements of Cash Flow. We held 527 and 439 futures contracts at December 31, 2024 and 2023, respectively. The fair value of the futures contracts represents the cumulative unsettled variation margin (open trade equity, net of cash settlements). We provide cash collateral to the counterparties for the initial and variation margin on the futures contracts, which is included in Cash and cash equivalents in the Consolidated Balance Sheets. The amount of cash collateral held by the counterparties for such contracts was $ 7 million and $ 4 million at December 31, 2024 and 2023, respectively. Note E - Reinsurance F&G reinsures portions of its policy risks with other insurance companies. The use of indemnity reinsurance does not discharge an insurer from liability on the insurance ceded. The insurer is required to pay in full the amount of its insurance liability regardless of whether it is entitled to or able to receive payment from the reinsurer. The portion of risks exceeding F&G's retention limit is reinsured. F&G primarily seeks reinsurance coverage in order to manage loss exposures, to enhance our capital position, to diversify risks and earnings, and to manage new business volume. F&G follows reinsurance accounting when the treaty adequately transfers insurance risk and any acquisition cost reimbursements reduce policy acquisition costs deferred and maintenance expense reimbursements 170 reduce direct expenses incurred. Otherwise, F&G follows deposit accounting if there is inadequate transfer of insurance risk or if the underlying policy for which risk is being transferred is an investment contract that does not contain insurance risk. Refer to Note A - Business and Summary of Significant Accounting Policies for more information over our accounting policy for reinsurance agreements. As of December 31, 2024, we had an immaterial amount of COR included in Prepaid expenses and other assets on the Consolidated Balance Sheets compared to none as of December 31, 2023. The effects of reinsurance on net premiums earned and net benefits incurred (benefits paid and reserve changes) for the years ended December 31, 2024, 2023, and 2022 respectively, were as follows (in millions): Year Ended December 31, 2024 2023 2022 Net Premiums Earned Net Benefits Incurred Net Premiums Earned Net Benefits Incurred Net Premiums Earned Net Benefits Incurred Direct $ 2,346 $ 3,987 $ 2,112 $ 3,728 $ 1,522 $ 3,640 Ceded ( 94 ) ( 196 ) ( 105 ) ( 175 ) ( 128 ) ( 2,514 ) Net $ 2,252 $ 3,791 $ 2,007 $ 3,553 $ 1,394 $ 1,126 Amounts payable or recoverable for reinsurance on paid and unpaid claims are not subject to periodic or maximum limits. No policies issued by F&G have been reinsured with any foreign company, which is controlled, either directly or indirectly, by a party not primarily engaged in the business of insurance. F&G has not entered into any reinsurance agreements in which the reinsurer may unilaterally cancel any reinsurance for reasons other than non-payment of premiums or other similar credit issues. Reinsurance Transactions The following summarizes significant changes to third-party reinsurance agreements for the years ended December 31, 2024 and 2023: Somerset: Effective July 1, 2024, F&G amended the existing flow reinsurance agreement with Somerset Reinsurance Ltd. (“Somerset”), a third-party reinsurer, to additionally cede the base contract benefits and GMWB riders attached under certain FIA policies on a coinsurance funds withheld quota share basis. Kubera: F&G has a reinsurance agreement with Kubera Insurance (SAC) Ltd. (“Kubera”), an unaffiliated reinsurer, to cede certain FIA statutory reserves on a coinsurance funds withheld quota share basis, net of applicable existing reinsurance. This agreement has been amended several times to include additional FIA policies, with the latest amendment effective December 1, 2024. Everlake and Somerset: F&G executed flow reinsurance agreements with Everlake Life Insurance Company (“Everlake”) and Somerset, third-party reinsurers, to cede certain MYGA business written effective September 1, 2023, and December 1, 2023, respectively, on a coinsurance quota share basis. Canada Life: Effective May 1, 2020, F&G entered into an indemnity reinsurance agreement with Canada Life Assurance Company (“Canada Life”) United States Branch, a third-party reinsurer, to reinsure FIA policies with GMWB riders. In accordance with the terms of this agreement, F&G cedes a quota share percentage of the net retention of guaranteed payments in excess of account value for GMWB. Effective December 31, 2023, we entered a Recapture and Termination Agreement with Canada Life whereby 100 % of the liabilities and obligations were recaptured. The following summarizes significant changes to third-party reinsurance agreements subsequent to the year ended December 31, 2024: Everlake Reinsurance Amendment 171 Effective January 1, 2025, F&G amended the existing flow reinsurance agreement with Everlake to cede future additional MYGA business for agreed upon periods to Everlake pursuant to an offer and acceptance process, rather than on a flow basis. The amendment included a cession of an inforce block of certain MYGA policies on a coinsurance quota share basis. The following summarizes our reinsurance recoverable (in millions): Parent Company/ Principal Reinsurers Reinsurance Recoverable (a) Agreement Type Products Covered Accounting December 31, 2024 December 31, 2023 Aspida Life Re Ltd. $ 7,844 $ 6,128 Coinsurance Funds Withheld Certain MYGA (b) Deposit Somerset (c) 2,822 716 Coinsurance Funds Withheld Certain MYGA (b) and deferred annuities Deposit Coinsurance Funds Withheld Certain FIA Reinsurance Everlake 1,168 509 Coinsurance Certain MYGA (b) (d) Deposit Wilton Reassurance Company 1,066 1,092 Coinsurance Block of traditional, IUL, and UL (e) Reinsurance Other (f) 489 536 Reinsurance recoverable, gross of allowance for credit losses 13,389 8,981 Allowance for expected credit loss ( 20 ) ( 21 ) Reinsurance recoverable, net of allowance for credit losses $ 13,369 $ 8,960 (a) Reinsurance recoverables do not include unearned ceded premiums that would be recovered in the event of early termination of certain traditional life policies. (b) The combined quota share flow reinsurance amongst all reinsurers for 2024 varied between 30 % and 90 %. As of December 31, 2024, the combined quota share flow reinsurance amongst all reinsurers was 90 %. (c) The balance represents the total reinsurance recoverable for all reinsurance agreements with Somerset. (d) Reinsurance recoverable is collateralized by assets placed in a statutory comfort trust by the reinsurer and maintained for our sole benefit. (e) Also includes certain FGL Insurance life insurance policies that are subject to redundant reserves, reported on a statutory basis, under Regulation XXX and Guideline AXXX. (f) Represents all other reinsurers, with no single reinsurer having a carrying value in excess of 5% of total reinsurance recoverable As of December 31, 2024 and December 31, 2023, F&G had a deposit asset of $ 11,039 million and $ 7,481 million, respectively, which is reported in the Reinsurance recoverable, net of allowance for credit losses on the Consolidated Balance Sheets. F&G incurred risk charge fees of $ 42 million, $ 39 million, and $ 36 million during the years ended December 31, 2024, 2023, and 2022, respectively, in relation to reinsurance agreements. Credit Losses F&G estimates expected credit losses on reinsurance recoverables using a probability of default/loss given default model. Significant inputs to the model include the reinsurer's credit risk, expected timing of recovery, industry-wide historical default experience, senior unsecured bond recovery rates, and credit enhancement features. The expected credit loss reserves were as follows (in millions): Year Ended December 31, 2024 2023 Balance at beginning of period $ ( 21 ) $ ( 10 ) Changes in the expected credit loss reserve 1 ( 11 ) Balance at end of period $ ( 20 ) $ ( 21 ) 172 Concentration of Reinsurance Risk As indicated above, the Company has a significant concentration of reinsurance risk with third party reinsurers, Aspida Life Re Ltd. (“Aspida Re”), Wilton Reassurance (“Wilton Re”), Somerset, and Everlake that could have a material impact on our financial position in the event that any of these reinsurers fails to perform its obligations under the various reinsurance treaties. We monitor the financial condition and financial strength of individual reinsurers using public ratings (refer to table below) and ratings reports of individual reinsurers to attempt to reduce the risk of default by such reinsurers. In addition, the risk of non-performance is further mitigated with various forms of collateral or collateral arrangements, including secured trusts, funds withheld accounts and irrevocable letters of credit. We believe that all amounts due from Aspida Re, Wilton Re, Somerset and Everlake for periodic treaty settlements, net of any applicable credit loss reserves, are collectible as of December 31, 2024. The following table presents financial strength ratings as of December 31, 2024: Parent Company/Principal Reinsurers Financial Strength Rating AM Best S&P Fitch Moody's Aspida Re A- — — — Somerset A- BBB+ — — Everlake A — — — Wilton Re A+ — A- — “—” indicates not rated Intercompany Reinsurance Agreements The Company executes various intercompany reinsurance agreements between its insurance subsidiaries, including off shore entities, for purposes of managing regulatory statutory capital and risk. Since these agreements are intercompany, the financial impacts are eliminated in the preparation of the Consolidated Financial Statements included within this Annual Report on Form 10-K. Some of these intercompany transactions are executed with wholly owned reinsurance subsidiaries, Corbeau Re, Inc. (“Corbeau Re”), Raven Reinsurance Company (“Raven Re”) and F&G Cayman Re (“Cayman Re”), to finance the portion of statutory reserves considered to be non-economic. The financing arrangements involve Fidelity & Guaranty Life Insurance Company reinsuring certain annuity products and their related rider benefits to the captives and the captives executing third-party financing facilities that are classified as capital for statutory purposes. The transactions with Raven Re and Cayman Re included the execution of letter of credits with Nomura Bank International plc (“NBI”) and Deutsche Bank AG, respectively, that are undrawn and have maximum borrowing capacities of $ 175 million and $ 400 million, respectively, as of December 31, 2024. The transaction with Corbeau Re included the execution of an excess of loss agreement (“XOL”) with Canada Life Barbados Branch that matures on December 31, 2043, and provides for coverage on losses up to $ 1,500 million as of December 31, 2024. With Corbeau Re, non-economic reserves were financed through the maturity date of the XOL and statutory reserves are recorded for all risks expected to be incurred after the maturity date of the XOL. The XOL is not accounted for as reinsurance as it does not satisfy the risk transfer requirements for GAAP; therefore, deposit accounting is applied. Note F - Intangibles The following table reconciles to Other intangible assets, net, on the Consolidated Balance Sheets as of December 31, 2024 and 2023 (in millions): 173 December 31, 2024 December 31, 2023 VOBA $ 1,349 $ 1,446 DAC 3,036 2,215 DSI 625 346 VODA 74 86 Computer software 76 65 Definite lived trademarks, tradenames, and other 131 41 Customer relationships and contracts 273 — Indefinite lived tradenames and other 8 8 Total Other intangible assets, net $ 5,572 $ 4,207 The following tables roll forward VOBA by product for the years ended December 31, 2024 and 2023 (in millions): Indexed Annuities Fixed Rate Annuities Immediate Annuities Universal Life Traditional Life Total Balance at January 1, 2024 $ 1,025 $ 27 $ 191 $ 134 $ 69 $ 1,446 Amortization ( 133 ) ( 5 ) ( 7 ) ( 8 ) ( 7 ) ( 160 ) Actuarial model updates and refinements (a) — — — — 63 63 Balance at December 31, 2024 $ 892 $ 22 $ 184 $ 126 $ 125 $ 1,349 (a) net of amortization of ($ 15 million). Indexed Annuities Fixed Rate Annuities Immediate Annuities Universal Life Traditional Life Total Balance at January 1, 2023 $ 1,166 $ 32 $ 201 $ 143 $ 73 $ 1,615 Amortization ( 141 ) ( 5 ) ( 10 ) ( 9 ) ( 4 ) ( 169 ) Balance at December 31, 2023 $ 1,025 $ 27 $ 191 $ 134 $ 69 $ 1,446 VOBA amortization expense of $ 175 million, $ 169 million, and $ 180 million, was recorded in Depreciation and amortization on the Consolidated Statements of Operations for the years ended December 31, 2024, 2023, and 2022, respectively. The following tables roll forward DAC by product for the years ended December 31, 2024 and 2023 (in millions): Indexed Annuities Fixed Rate Annuities Universal Life Total (a) Balance at January 1, 2024 $ 1,378 $ 288 $ 545 $ 2,211 Capitalization 652 174 274 1,100 Amortization ( 156 ) ( 86 ) ( 38 ) ( 280 ) Balance at December 31, 2024 $ 1,874 $ 376 $ 781 $ 3,031 Indexed Annuities Fixed Rate Annuities Universal Life Total (a) Balance at January 1, 2023 $ 971 $ 83 $ 348 $ 1,402 Capitalization 510 177 229 916 Amortization ( 103 ) ( 51 ) ( 32 ) ( 186 ) Reinsurance related adjustments — 79 — 79 Balance at December 31, 2023 $ 1,378 $ 288 $ 545 $ 2,211 (a) Excludes insignificant amounts of DAC related to FABN and PRT. 174 DAC amortization expense of $ 280 million, $ 186 million, and $ 99 million, was recorded in Depreciation and amortization on the Consolidated Statements of Operations for the year s ended December 31, 2024, 2023, and 2022, respectively, excluding insignificant amounts related to FABN and PRT. The following table presents a reconciliation of DAC to the table above which is reconciled to the Consolidated Balance Sheets as of December 31, 2024 and 2023 (in millions): December 31, 2024 December 31, 2023 Indexed Annuities $ 1,874 $ 1,378 Fixed Rate Annuities 376 288 Universal Life 781 545 Funding Agreements 4 4 PRT 1 — Total $ 3,036 $ 2,215 The following tables roll forward DSI for our indexed annuity products for the years ended December 31, 2024 and 2023 (in millions): Years Ended December 31, 2024 2023 Balance at January 1, $ 346 $ 200 Capitalization 319 168 Amortization ( 40 ) ( 22 ) Balance at December 31, $ 625 $ 346 DSI amortization expense of $ 40 million, $ 22 million, and $ 14 million, was recorded in Depreciation and amortization on the Consolidated Statements of Operations for the years ended December 31, 2024, 2023, and 2022, respectively. The cash flow assumptions used to amortize VOBA and DAC were consistent with the assumptions used to estimate the FPB for life contingent immediate annuities, and will be reviewed and unlocked, if applicable, in the same period as those balances. For nonparticipating traditional life contracts, the VOBA amortization is straight-line, without the use of cash flow assumptions. For indexed annuity contracts, the cash flow assumptions used to amortize VOBA, DAC, and DSI were consistent with the assumptions used to estimate the value of the embedded derivative and MRBs, and will be reviewed and unlocked, if applicable, in the same period as those balances. For fixed rate annuities and IUL the cash flow assumptions used to amortize VOBA, DAC and DSI reflect the Company’s best estimates for policyholder behavior, consistent with the development of assumptions for indexed annuities and immediate annuities. Refer to Note A - Business and Summary of Significant Accounting Policies for further information about accounting policies for amortization of VOBA, DAC and DSI. We review cash flow assumptions annually, generally in the third quarter. In 2024 and 2023, we undertook a review of all significant assumptions and revised several assumptions relating to our deferred annuity (indexed annuity and fixed rate annuity) and IUL products. For the year ended December 31, 2024, we updated assumptions including surrender rates, GMWB election timing, premium persistency, mortality improvement, and option budgets. For the year ended December 31, 2023, we updated assumptions including surrender rates, GMWB election timing, premium persistency, and option budgets. All updates to these assumptions brought us more in line with our company and overall industry experience since the prior assumption update. Definite and Indefinite Lived Other Intangible Assets 175 Other intangible assets as of December 31, 2024 and 2023 consist of the following (in millions): December 31, 2024 Cost Accumulated amortization Net carrying amount Weighted average useful life (years) Definite lived other intangible assets VODA $ 140 $ ( 66 ) $ 74 15 Computer software 114 ( 38 ) 76 2 to 10 Definite lived trademarks, tradenames, and other (a) 155 ( 24 ) 131 5 to 10 Customer relationship intangibles and contracts (a) 310 ( 37 ) 273 12 to 20 Indefinite lived other intangible assets Indefinite lived tradenames and other 8 N/A 8 Indefinite Total $ 562 (a) Includes intangible assets acquired with ROAR and PALH. Refer to Note P - Acquisitions for further details. December 31, 2023 Cost Accumulated amortization Net carrying amount Weighted average useful life (years) Definite lived other intangible assets VODA $ 140 $ ( 54 ) $ 86 15 Computer software 94 ( 29 ) 65 2 to 10 Definite lived trademarks, tradenames and other 54 ( 13 ) 41 10 Indefinite lived other intangible assets Indefinite lived tradenames and other 8 N/A 8 Indefinite Total $ 200 Total amortization expense for definite lived other intangible assets, was $ 69 million, $ 26 million and $ 25 million for the years ended December 31, 2024, 2023 and 2022, respectively. Within definite lived trademarks, tradenames, and other is an amount established to offset MRBs with no explicit rider charges, which had a balance of $ 94 million and $ 22 million as of December 31, 2024 and December 31, 2023, respectively. Amortization of $ 5 million, $ 1 million and $ 1 million was recorded in Depreciation and amortization on the Consolidated Statements of Operations for the years ended December 31, 2024, 2023, and 2022, respectively, and is included in total amortization expense noted above. We recorded no impairment expense related to computer software during the year ended December 31, 2024, compared to $ 13 million and $ 14 million for the years ended December 31, 2023 and 2022, respectively. The following table shows the estimated amortization expense in future fiscal periods for VOBA for the in-force liabilities, customer relationship intangibles and definite lived other intangible assets as of December 31, 2024 (in millions): VOBA Customer Relationship Intangibles Definite Lived Other Intangible Assets 2025 $ 145 $ 35 $ 41 2026 132 30 37 2027 121 26 35 2028 110 23 28 2029 100 20 25 Thereafter 741 139 115 Total $ 1,349 $ 273 $ 281 176 Note G - Market Risk Benefits The following table presents the balances of and changes in MRBs associated with indexed annuities and fixed rate annuities for the years ended December 31, 2024 and 2023 (in millions): December 31, 2024 December 31, 2023 Indexed annuities Fixed rate annuities Indexed annuities Fixed rate annuities Balance, beginning of period, net liability $ 314 $ 1 $ 164 $ 1 Balance, beginning of period, before effect of changes in the instrument-specific credit risk $ 209 $ 1 $ 102 $ 1 Issuances and benefit payments 109 — ( 10 ) — Attributed fees collected and interest accrual 147 — 131 — Actual policyholder behavior different from expected ( 5 ) — 27 — Changes in assumptions and other 24 — 29 — Effects of market related movements ( 162 ) — ( 70 ) — Balance, end of period, before effect of changes in the instrument-specific credit risk 322 1 209 1 Effect of changes in the instrument-specific credit risk 98 — 105 — Balance, end of period, net liability 420 1 314 1 Less: reinsured market risk benefits 61 — — — Balance, end of period, net of reinsurance $ 359 $ 1 $ 314 $ 1 Weighted-average attained age of policyholders weighted by total AV (years) 67.98 72.58 68.28 72.59 Net amount at risk $ 1,327 $ 2 $ 1,059 $ 2 The following table reconciles MRBs by amounts in an asset position and amounts in a liability position to the MRBs amounts in the Consolidated Balance Sheets (in millions): December 31, 2024 December 31, 2023 Direct Reinsured Net Direct Reinsured Net MRB asset Indexed annuities $ 128 $ 61 $ 189 $ 88 $ — $ 88 Fixed rate annuities — — — — — — Total MRB asset $ 128 $ 61 $ 189 $ 88 $ — $ 88 MRB liability Indexed annuities $ 548 $ — $ 548 $ 402 $ — $ 402 Fixed rate annuities 1 — 1 1 — 1 Total MRB liability $ 549 $ — $ 549 $ 403 $ — $ 403 2024 . The net MRB liability increased for the year ended December 31, 2024, primarily as a result of collection of attributed fees, interest accrual, MRB reserves for contracts issued within the period, and changes in actuarial assumptions. These increases were partially offset by the effects of market related movements, including the impacts of higher risk-free rates and increases in the equity market related projections. For the year ended December 31, 2024, notable changes made to the inputs to the fair value estimates of MRBs calculations included an increase in risk-free rates leading to a favorable change in the MRBs associated with indexed annuities and fixed rate annuities; increases in the equity market related projections resulted in a decrease in the net amount at risk associated with indexed annuities, leading to a favorable change in the value of the associated MRBs; and an increase in the rider benefit utilization assumption, leading to an unfavorable change in the value of the associated MRBs. 177 2023. The net MRB liability increased for the year ended December 31, 2023, primarily as a result of attributed fees collected, increases as a result of actual policyholder behavior different than expected and changes in assumptions as discussed below. These increases were partially offset by the effects of market related movements, including the impacts of higher risk-free rates and increases in the equity market related projections. For the year ended December 31, 2023, notable changes made to the inputs to the fair value estimates of MRBs calculations included a significant increase in risk-free rates leading to a favorable change in the MRBs associated with indexed annuities and fixed rate annuities; increases in the equity market related projections resulted in a decrease in the net amount at risk associated with indexed annuities, leading to a favorable change in the value of the associated MRBs; and F&G’s credit spread decreased, lead to a corresponding unfavorable change in the MRBs associated with both indexed annuities and fixed rate annuities. In 2024 and 2023, F&G undertook a review of all significant assumptions and revised several assumptions relating to our deferred annuities (indexed annuities and fixed rate annuities) with MRBs. For the year ended December 31, 2024, we updated assumptions including surrender rates, rider benefit election utilization, mortality improvement, and option budgets. For the year ended December 31, 2023, we updated assumptions including surrender rates, partial withdrawal rates, mortality improvement, and option budgets. All updates to these assumptions brought us more in line with our Company and overall industry experience since the prior assumption updates. These updates, in total, led to increases in the net MRB liability for the years ended December 31, 2024 and 2023. Note H - Income Taxes Income tax expense (benefit) on continuing operations consists of the following (in millions): Year Ended December 31, 2024 2023 2022 Current $ 65 $ 27 $ ( 31 ) Deferred 71 ( 4 ) 189 Total $ 136 $ 23 $ 158 Total income tax expense (benefit) was allocated as follows (in millions): Year Ended December 31, 2024 2023 2022 Taxes on net earnings from continuing operations $ 136 $ 23 $ 158 Other comprehensive income (loss): Changes in current discount rate - future policy benefits 59 ( 50 ) 203 Changes in instrument-specific credit risk-market benefits 1 ( 9 ) 18 Unrealized (loss) gain on investments and other financial instruments ( 41 ) 275 ( 1,186 ) Unrealized gain (loss) on foreign currency translation and cash flow hedging ( 1 ) 1 ( 1 ) Total income tax (benefit) expense allocated to other comprehensive income (loss) 18 217 ( 966 ) Total income taxes $ 154 $ 240 $ ( 808 ) 178 A reconciliation of the federal statutory rate to our effective tax rate is as follows: Year Ended December 31, 2024 2023 2022 Federal statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 0.3 ( 12.7 ) 0.1 Benefit for capital loss carryback — — ( 3.0 ) Officers Compensation 1.2 ( 11.2 ) 0.3 Stock compensation ( 0.8 ) 2.7 — Tax credits ( 1.6 ) 16.2 ( 1.1 ) Dividends received deduction ( 0.2 ) 7.9 ( 0.4 ) Valuation allowance for deferred tax assets ( 1.8 ) ( 100.1 ) 3.4 COLI ( 0.6 ) 13.2 ( 0.4 ) Non-deductible expenses and other, net — ( 3.2 ) — Effective tax rate 17.5 % ( 66.2 ) % 19.9 % For the year ended December 31, 2024, the Company’s effective tax rate was 17.5 %. The effective tax rate was positively impacted by favorable permanent adjustments, including low income housing tax credits (“LIHTC”), the dividends received deduction (“DRD”), and COLI, as well as the valuation allowance release on unrealized losses and capital loss carryforwards. For the year ended December 31, 2023, the Company’s effective tax rate was ( 66.2 )%. The effective tax rate was negatively impacted by the valuation allowance expense recorded on unrealized losses and capital loss carryforwards. For the year ended December 31, 2022, the Company’s effective tax rate was 19.9 %. The effective tax rate was positively impacted by favorable permanent adjustments, including LIHTC, DRD, and COLI. The effective tax rate was also impacted by the benefit of the capital loss carryback. This benefit is offset by the valuation allowance expense recorded on unrealized losses and capital loss carryforwards. 179 The significant components of deferred tax assets and liabilities consist of the following (in millions): December 31, 2024 2023 Deferred tax assets: Employee benefit accruals $ 29 $ 25 Net operating loss carryforwards 105 75 General business tax credits 9 43 Corporate Alternative Minimum Tax ("CAMT") Credit Carryforwards 155 36 Bermuda CIT NOL Carryforward 10 24 Investment securities 643 597 Capital loss carryover 19 38 Market risk benefit 56 61 Derivatives 18 — Life insurance and claim related adjustments 451 547 Funds held under reinsurance agreements 822 500 Other 13 5 Total gross deferred tax asset 2,330 1,951 Less: valuation allowance 58 85 Total deferred tax asset 2,272 1,866 Deferred Tax Liabilities: Amortization of goodwill and intangible assets ( 18 ) ( 25 ) Other ( 2 ) ( 5 ) Depreciation ( 11 ) ( 15 ) Partnerships ( 163 ) ( 127 ) Value of business acquired ( 283 ) ( 304 ) Derivatives — ( 3 ) Deferred acquisition costs ( 543 ) ( 361 ) Transition reserve on new reserve method ( 8 ) ( 17 ) Funds held under reinsurance agreements ( 945 ) ( 621 ) Total deferred tax liability ( 1,973 ) ( 1,478 ) Net deferred tax asset (liability) $ 299 $ 388 Our net deferred tax asset was $ 299 million as of December 31, 2024 and a net deferred tax asset of $ 388 million as of December 31, 2023. The significant changes in the deferred taxes are as follows: the deferred tax asset for investment securities increased by $ 46 million primarily due to unrealized capital losses on fixed maturities and the recognition of tax gains on commercial mortgage loans, which were carried at a zero tax basis as a result of an IRS Code Section 338(h)(10) election made on November 30, 2017. The deferred tax liability related to deferred acquisition costs increased by $ 182 million, which is consistent with the growth in sales in our U.S. life group. The life insurance reserves and claim related adjustments deferred tax asset decreased by $ 96 million primarily due to the tax reserves for the year increasing by more than the GAAP reserves. The reinsurance receivable deferred tax asset increased by $ 322 million, and the reinsurance receivable deferred tax liability increased by $ 324 million, both due to the increase in the Modco reinsurance. As of December 31, 2024, we have net operating losses (“NOLs”) on a pretax basis of $ 503 million, which are available to carryforward and offset future federal taxable income subject to the 80% taxable income limitation. A portion of these NOLs are subject to Internal Revenue Code Section 382 limitations, however, such limitations are in excess of the relevant carryforward balances. Therefore, the carryforwards are effectively unlimited. These losses do not expire. As of December 31, 2024 and 2023, we had $ 9 million and $ 43 million of general business tax credits, respectively, which expire between 2041 and 2044. None of the $ 9 million in tax credits are limited. As of December 31, 2024 and 2023, the Company also had $ 155 million and $ 36 million of CAMT credits. The CAMT credits are not limited by IRC Section 382, and have no expiration date. 180 As of December 31, 2024, the valuation allowance of $ 58 million consisted of a full valuation allowance of $ 2 million on the unrealized capital loss deferred tax assets for F&G Life Re Ltd. (“F&G Life Re”), F&G Cayman Re Ltd. (“F&G Cayman Re”), and the US Non-life Companies, a full valuation allowance of $ 10 million on the foreign deferred tax assets of F&G Life Re, a full valuation allowance of $ 1 million on the deferred capital loss carryforwards for the US Non-life Companies and F&G Cayman Re, and a partial valuation allowance of $ 45 million on the US Life Companies’ capital loss deferred tax assets. The Company makes certain investments in limited partnerships, which invest in affordable housing projects that qualify for the LIHTC. The Company’s investment in the funds is amortized through income tax expense on the Consolidated Statements of Operations using the proportional amortization method. The tax credits and other benefits recognized are included in the net change in income taxes on the Consolidated Statements of Cash Flows. The following table presents the impacts of the LIHTC investments included in income tax expense on the Consolidated Statements of Operations (in millions): For the Year Ended December 31, 2024 2023 2022 Tax credits and other benefits recognized $ ( 36 ) $ ( 27 ) $ ( 26 ) Tax credit amortization expense 26 22 18 Total $ ( 10 ) $ ( 5 ) $ ( 8 ) At December 31, 2024 and December 31, 2023, LIHTC investments included in Prepaid expenses and other assets on the Consolidated Balance Sheets totaled $ 135 million and $ 108 million , respectively. The U.S. Life insurance group is subject to a Tax Sharing Agreement within the members of the life insurance tax return group. The agreement provides for an allocation based on separate return calculations and allows for reimbursement of company tax benefits absorbed by other members of the group. The U.S. non-life group is subject to a Tax Sharing Agreement with its parent, FNF, with which it files a consolidated federal income tax return. The Company’s non-life group Tax Sharing Agreement allows for reimbursement of company tax benefits absorbed by FNF. If, during the year ended December 31, 2024, the Company had computed taxes using the separate return method, the pro-forma provision for income taxes would remain unchanged. The U.S. Federal income tax returns of the Company for years prior to 2020 are no longer subject to examination by the taxing authorities. The Company does no t have any unrecognized tax benefits (“UTBs”) at December 31, 2024 or December 31, 2023. In the event the Company has UTBs, interest and penalties related to uncertain tax positions would be recorded as part of income tax expense in the financial statements. The Company regularly assesses the likelihood of additional tax assessments by jurisdiction and, if necessary, adjusts its tax reserves based on new information or developments. The Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) was signed into law on August 16, 2022. Among other changes, the Inflation Reduction Act introduced a 15% CAMT on adjusted financial statement income and a 1% excise tax on treasury stock repurchases. These provisions were effective January 1, 2023. For purposes of calculating the adjusted financial statement income, the Company is included in the controlled group of FNF, its parent company. Though the Company is subject to the minimum tax, the Company does not expect to be in a perpetual CAMT position. The life companies will join the consolidated tax return group with FNF and file a life/non-life consolidated return once the five-year waiting period has completed in 2026, which should strengthen that position as FNF is not anticipating owing CAMT on its future returns. The Company has elected to consider the effects of CAMT separately in evaluating the need for a valuation allowance. For the year ended December 31, 2024, due to the reasons above, no valuation allowance is needed. For the year ended December 31, 2024, the Company was subject to CAMT, but there is no impact to total tax. A CAMT credit carryforward was created and is expected to be able to be utilized in future years. 181 The CIT Act of 2023 was passed in Bermuda on December 27, 2023. The CIT commenced on January 1, 2025 and applies a statutory rate of 15% to the taxable income or loss of Bermuda tax resident entities and permanent establishments. F&G Life Re, a 953(d) company with no or minimal US permanent tax differences, is not expected to owe any Bermuda CIT due to the foreign tax credit. The deferred tax asset recorded for the year ended December 31, 2024 of $ 10 million has a full valuation allowance. Since the CIT did not have any material impact to the financial statements, the deferred tax asset and offsetting valuation allowance were netted together in the rate reconciliation above. Note I - Contractholder Funds The following tables summarize balances of and changes in contractholder funds’ account balances (in millions): December 31, 2024 Indexed annuities Fixed rate annuities Universal Life FABN (b) FHLB (b) Balance, beginning of year $ 27,164 $ 13,443 $ 2,391 $ 2,613 $ 2,539 Issuances 6,649 5,125 208 600 1,804 Premiums received 120 1 495 — — Policy charges (a) ( 195 ) — ( 315 ) — — Surrenders and withdrawals ( 3,832 ) ( 1,479 ) ( 101 ) — — Benefit payments ( 495 ) ( 315 ) ( 18 ) ( 820 ) ( 1,606 ) Interest credited 821 667 157 71 117 Other 3 — — ( 1 ) ( 2 ) Balance, end of year 30,235 17,442 2,817 2,463 2,852 Embedded derivative adjustment (c) 219 — 79 — — Gross liability, end of period 30,454 17,442 2,896 2,463 2,852 Less: Reinsurance recoverable 861 11,009 877 — — Net liability, after reinsurance recoverable $ 29,593 $ 6,433 $ 2,019 $ 2,463 $ 2,852 Weighted-average crediting rate 2.90 % 4.42 % 6.20 % N/A N/A Net amount at risk (d) N/A N/A $ 74,279 N/A N/A Cash surrender value (e) $ 27,865 $ 16,266 $ 2,177 N/A N/A (a) Contracts included in the contractholder funds are generally charged a premium and/or monthly assessments on the basis of the account balance. (b) FABN and FHLB are considered funding agreements that are investment contracts which follow the interest method of accounting, and therefore are not subject to Accounting Standards Update (“ASU”) 2018-12 disclosure requirements. However, the Company has elected to present the liability for these agreements within the disaggregated roll forward as we believe it will provide meaningful information for users of the financials. (c) The embedded derivative adjustment reconciles the account balance to the gross GAAP liability and represents the combination of the host contract and the fair value of the embedded derivatives. (d) For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date. (e) These amounts are gross of reinsurance. 182 December 31, 2023 Indexed annuities Fixed rate annuities Universal Life FABN (b) FHLB (b) Balance, beginning of year $ 24,766 $ 9,358 $ 2,112 $ 2,613 $ 1,982 Issuances 4,722 5,061 199 — 1,256 Premiums received 103 1 382 — — Policy charges (a) ( 182 ) — ( 261 ) — — Surrenders and withdrawals ( 2,005 ) ( 1,142 ) ( 90 ) — — Benefit payments ( 526 ) ( 240 ) ( 27 ) ( 53 ) ( 763 ) Interest credited 270 405 76 54 64 Other 16 — — ( 1 ) — Balance, end of year 27,164 13,443 2,391 2,613 2,539 Embedded derivative adjustment (c) 243 — 84 — — Gross liability, end of period 27,407 13,443 2,475 2,613 2,539 Less: Reinsurance recoverable 17 7,520 894 — — Net liability, after reinsurance recoverable $ 27,390 $ 5,923 $ 1,581 $ 2,613 $ 2,539 Weighted-average crediting rate 1.40 % 4.85 % 3.44 % N/A N/A Net amount at risk (d) N/A N/A $ 60,389 N/A N/A Cash surrender value (e) $ 25,099 $ 12,505 $ 1,872 N/A N/A (a) Contracts included in the contractholder funds are generally charged a premium and/or monthly assessments on the basis of the account balance. (b) FABN and FHLB are considered funding agreements that are investment contracts which follow the interest method of accounting, and therefore are not subject to ASU 2018-12 disclosure requirements. However, the Company has elected to present the liability for these agreements within the disaggregated roll forward as we believe it will provide meaningful information for users of the financials. (c) The embedded derivative adjustment reconciles the account balance to the gross GAAP liability and represents the combination of the host contract and the fair value of the embedded derivatives. (d) For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date. (e) These amounts are gross of reinsurance. The following table reconciles contractholder funds’ account balances to the contractholder funds liability in the Consolidated Balance Sheets (in millions): December 31, 2024 2023 Indexed annuities $ 30,454 $ 27,407 Fixed rate annuities 17,442 13,443 Immediate annuities 286 311 Universal life 2,896 2,475 Traditional life 5 5 Funding Agreement-FABN 2,463 2,613 FHLB 2,852 2,539 PRT 6 5 Total $ 56,404 $ 48,798 Annually, typically in the third quarter, we review assumptions associated with reserves for policy benefits and product guarantees. During the third quarter of 2024 and for the year ended December 31, 2024, based on policyholder behavior, experience and interest rate movements, we reflected updates to surrender assumptions for recent and expected near term policyholder behavior, as well as updated certain indexed annuities assumptions used to calculate the fair value of the embedded derivative component within contractholder funds. These changes resulted in a decrease in total benefits and other changes in policy reserves of approximately $ 89 million for the year ended December 31, 2024. During the third quarter of 2023 and for the year ended December 31, 2023, based on increases in interest rates and pricing changes, we updated certain indexed annuities assumptions used to calculate the fair value of the embedded derivative component within contractholder funds and also aligned reserves to actual policyholder 183 behavior. These changes resulted in an increase in total benefits and other changes in policy reserves of approximately $ 73 million for the year ended December 31, 2023. The following tables present the account values by range of guaranteed minimum crediting rates and the related range of difference, in basis points, between rates being credited to policyholders and the respective guaranteed minimums (in millions): December 31, 2024 Range of guaranteed minimum crediting rate At Guaranteed Minimum 1 Basis Point- 50 Basis Points Above 51 Basis Points- 150 Basis Points Above Greater Than 150 Basis Points Above Total Indexed Annuities 0.00%-1.50% $ 23,540 $ 1,236 $ 492 $ 1,846 $ 27,114 1.51%-2.50% 875 1 684 1,242 2,802 Greater than 2.50% 303 2 — 14 319 Total $ 24,718 $ 1,239 $ 1,176 $ 3,102 $ 30,235 Fixed Rate Annuities 0.00%-1.50% $ 57 $ 20 $ 773 $ 14,407 $ 15,257 1.51%-2.50% 4 7 20 462 493 Greater than 2.50% 804 2 5 881 1,692 Total $ 865 $ 29 $ 798 $ 15,750 $ 17,442 Universal Life 0.00%-1.50% $ 2,421 $ 7 $ — $ 24 $ 2,452 1.51%-2.50% — — — — — Greater than 2.50% 364 — 1 — 365 Total $ 2,785 $ 7 $ 1 $ 24 $ 2,817 December 31, 2023 Range of guaranteed minimum crediting rate At Guaranteed Minimum 1 Basis Point- 50 Basis Points Above 51 Basis Points- 150 Basis Points Above Greater Than 150 Basis Points Above Total Indexed Annuities 0.00%-1.50% $ 22,392 $ 1,444 $ 526 $ 1,953 $ 26,315 1.51%-2.50% 196 1 24 250 471 Greater than 2.50% 377 1 — — 378 Total $ 22,965 $ 1,446 $ 550 $ 2,203 $ 27,164 Fixed Rate Annuities 0.00%-1.50% $ 23 $ 25 $ 1,532 $ 10,271 $ 11,851 1.51%-2.50% 5 8 23 453 489 Greater than 2.50% 893 2 4 204 1,103 Total $ 921 $ 35 $ 1,559 $ 10,928 $ 13,443 Universal Life 0.00%-1.50% $ 1,987 $ 5 $ — $ 21 $ 2,013 1.51%-2.50% — — — — — Greater than 2.50% 361 16 1 — 378 Total $ 2,348 $ 21 $ 1 $ 21 $ 2,391 184 Note J - Future Policy Benefits The following table summarizes balances and changes in the present value of expected net premiums and the present value of the expected FPB for nonparticipating traditional contracts (in millions): Traditional life December 31, 2024 December 31, 2023 Expected net premiums Balance, beginning of year $ 722 $ 797 Beginning balance at original discount rate 874 974 Effect of actual variances from expected experience ( 4 ) ( 1 ) Balance adjusted for variances from expectation 870 973 Interest accrual 17 19 Net premiums collected ( 107 ) ( 118 ) Ending Balance at original discount rate 780 874 Effect of changes in discount rate assumptions ( 149 ) ( 152 ) Balance, end of year $ 631 $ 722 Expected FPB Balance, beginning of year $ 2,071 $ 2,151 Beginning balance at original discount rate 2,492 2,665 Effect of actual variances from expected experience 44 ( 24 ) Balance adjusted for variances from expectation 2,536 2,641 Interest accrual 54 56 Benefits payments ( 222 ) ( 205 ) Ending Balance at original discount rate 2,368 2,492 Effect of changes in discount rate assumptions ( 435 ) ( 421 ) Balance, end of year $ 1,933 $ 2,071 Net liability for future policy benefits $ 1,302 $ 1,349 Less: Reinsurance recoverable 513 413 Net liability for future policy benefits, after reinsurance recoverable $ 789 $ 936 Weighted-average duration of liability for future policyholder benefits (years) 6.28 7.36 185 The following tables summarize balances and changes in the present value of the expected FPB for limited-payment contracts (in millions): PRT December 31, 2024 December 31, 2023 Balance, beginning of year $ 4,189 $ 2,165 Beginning balance at original discount rate 4,351 2,475 Effect of changes in cash flow assumptions ( 3 ) ( 9 ) Effect of actual variances from expected experience ( 11 ) ( 7 ) Balance adjusted for variances from expectation 4,337 2,459 Issuances 2,324 2,041 Interest accrual 240 109 Benefits payments ( 484 ) ( 258 ) Ending Balance at original discount rate 6,417 4,351 Effect of changes in discount rate assumptions ( 363 ) ( 162 ) Balance, end of year $ 6,054 $ 4,189 Net liability for future policy benefits, after reinsurance recoverable $ 6,054 $ 4,189 Weighted-average duration of liability for future policyholder benefits (years) 7.78 8.23 Immediate annuities December 31, 2024 December 31, 2023 Balance, beginning of year $ 1,415 $ 1,429 Beginning balance at original discount rate 1,788 1,858 Effect of changes in cash flow assumptions — — Effect of actual variances from expected experience ( 27 ) ( 15 ) Balance adjusted for variances from expectation 1,761 1,843 Issuances 30 22 Interest accrual 59 51 Benefits payments ( 118 ) ( 128 ) Ending Balance at original discount rate 1,732 $ 1,788 Effect of changes in discount rate assumptions ( 435 ) ( 373 ) Balance, end of year $ 1,297 $ 1,415 Net liability for future policy benefits $ 1,297 $ 1,415 Less: Reinsurance recoverable 109 116 Net liability for future policy benefits, after reinsurance recoverable $ 1,188 $ 1,299 Weighted-average duration of liability for future policyholder benefits (years) 12.63 12.47 186 The following tables summarize balances and changes in the liability for DPL for limited-payment contracts (in millions): December 31, 2024 December 31, 2023 Immediate annuities PRT Immediate annuities PRT Balance, beginning of year $ 87 $ 10 $ 69 $ 4 Effect of modeling changes — — 4 — Effect of changes in cash flow assumptions — ( 8 ) — 1 Effect of actual variances from expected experience 8 — 16 5 Balance adjusted for variances from expectation 95 2 89 10 Issuances 3 1 3 — Interest accrual 1 4 2 1 Amortization ( 9 ) ( 1 ) ( 7 ) ( 1 ) Balance, end of year $ 90 $ 6 $ 87 $ 10 The following table reconciles the net FPB to the FPB in the Consolidated Balance Sheets (in millions). The DPL for Immediate Annuities and PRT is presented together with the FPB in the Consolidated Balance Sheets and has been included as a reconciling item in the table below: December 31, 2024 2023 Traditional life $ 1,302 $ 1,349 Immediate annuities 1,297 1,415 PRT 6,054 4,189 Immediate annuities DPL 90 87 PRT DPL 6 10 Total $ 8,749 $ 7,050 The following table provides the amount of undiscounted and discounted expected gross premiums and expected future benefits and expenses for nonparticipating traditional and limited-payment contracts (in millions): Undiscounted Discounted December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Traditional life Expected future benefit payments $ 2,705 $ 2,935 $ 1,948 $ 2,075 Expected future gross premiums 914 1,082 681 789 Immediate annuities Expected future benefit payments $ 3,189 $ 3,291 $ 1,297 $ 1,413 Expected future gross premiums — — — — PRT Expected future benefit payments $ 10,038 $ 6,709 $ 6,054 $ 4,350 Expected future gross premiums — — — — 187 The following table summarizes the amount of revenue and interest related to nonparticipating traditional and limited-payment contracts recognized in the Consolidated Statements of Operations (in millions): Gross Premiums (a) Interest Expense (b) December 31, December 31, 2024 2023 2022 2024 2023 2022 Traditional life $ 111 $ 123 $ 137 $ 37 $ 37 $ 39 Immediate annuities 18 24 23 59 51 60 PRT 2,217 1,964 1,362 240 109 50 Total $ 2,346 $ 2,111 $ 1,522 $ 336 $ 197 $ 149 (a) Included in Life insurance premiums and other fees on the Consolidated Statements of Operations. (b) Included in Benefits and other changes in policy reserves (remeasurement gains (losses) (a)) on the Consolidated Statements of Operations. The following table presents the weighted-average interest rate: December 31, 2024 2023 2022 Traditional life Interest accretion rate 2.34 % 2.33 % 2.32 % Current discount rate 5.44 % 5.03 % 5.37 % Immediate annuities Interest accretion rate 3.17 % 3.14 % 3.07 % Current discount rate 5.45 % 4.98 % 5.21 % PRT Interest accretion rate 4.72 % 4.61 % 3.20 % Current discount rate 5.54 % 5.03 % 5.40 % The following tables summarize the actual experience and expected experience for mortality and lapses of the FPB: December 31, 2024 Traditional life Immediate annuities PRT Mortality Actual experience 1.4 % 2.7 % 2.7 % Expected experience 1.5 % 1.9 % 2.5 % Lapses Actual experience 0.1 % — % — % Expected experience 0.5 % — % — % December 31, 2023 Traditional life Immediate annuities PRT Mortality Actual experience 1.7 % 3.2 % 3.2 % Expected experience 1.4 % 1.8 % 2.3 % Lapses Actual experience — % — % — % Expected experience 0.3 % — % — % 188 December 31, 2022 Traditional life Immediate annuities PRT Mortality Actual experience 1.5 % 3.0 % 1.9 % Expected experience 1.3 % 1.9 % 2.5 % Lapses Actual experience — % — % — % Expected experience 0.3 % — % — % The following table provides additional information for periods in which a cohort has a net premium ratio (“NPR”) greater than 100% (and therefore capped at 100%) (dollars in millions): December 31, 2024 Cohort X Description NPR before capping 108 % Term with return of premium Non-NY Cohort Reserves before NPR capping $ 1,147 Term with return of premium Non-NY Cohort Reserves after NPR capping 1,174 Term with return of premium Non-NY Cohort Loss Expense 27 Term with return of premium Non-NY Cohort F&G realized actual-to-expected experience variances and made changes to assumptions during the years ended December 31, 2024 and 2023 as follows: Traditional life The traditional life line of business primarily consists of policies that were sold prior to 2010. As this line of business continues to age, benefit payments made from these contracts will be the primary driver of the emergence of reserves, decreasing the reserve balance. Significant assumption inputs to the calculation of the FPB for traditional life include mortality, lapses (including lapses due to nonpayment of premium and surrenders for cash surrender value), and discount rates (both accretion and current). We review the cash flow assumptions annually, typically in the third quarter. In 2024, F&G made an adjustment to the calculation to reflect additional actuarial precision, unrelated to the assumptions, driving an increase to the FPB liability. In 2023, F&G undertook a review of all significant assumptions and revised the lapse assumption, resulting in a slight decrease to the FPB. There have been no other significant changes. Market data that underlies current discount rates was updated in 2024 from that utilized in 2023 resulting in increased discount rates that drove a decrease to the FPB. Market data that underlies current discount rates was updated in 2023 from that utilized in 2022, resulting in decreased discount rates that drove a material increase to the FPB. Immediate annuities (life contingent) Significant assumption inputs to the calculation of the FPB for immediate annuities (life contingent) include mortality and discount rates (both accretion and current). We review the cash flow assumptions annually, typically in the third quarter. In 2024 and 2023, F&G undertook a review of the significant cash flow assumptions and did not make any changes to mortality. Market data that underlies current discount rates was updated in 2024 from that utilized in 2023 resulting in increased discount rates that drove a decrease to the FPB. Market data that underlies current discount rates was updated in 2023 from that utilized in 2022, resulting in decreased discount rates that drove a material increase to the FPB. 189 PRT (life contingent) The PRT line of business has issued a significant volume of contracts for both 2024 and 2023, which is the primary impact in increasing the reserve balance in each of those periods. Significant assumption inputs to the calculation of the FPB for PRT (life contingent) include mortality and discount rates (both accretion and current). Additionally, for PRT contracts with deferred payment streams, retirement age and elected payment form are significant assumptions. We review the cash flow assumptions annually, typically in the third quarter. In 2024 and 2023, F&G undertook a review of the significant cash flow assumptions and did not make any changes to mortality. Market data that underlies current discount rates was updated in 2024 from that utilized in 2023 resulting in increased discount rates that drove a decrease to the FPB. Market data that underlies current discount rates was updated in 2023 from that utilized in 2022, resulting in decreased discount rates that drove a material increase to the FPB. Premium deficiency testing F&G conducts annual premium deficiency testing for its long-duration contracts except for the FPB for nonparticipating traditional and limited-payment contracts. F&G also conducts annual premium deficiency testing for the VOBA of all long-duration contracts. Premium deficiency testing is performed by reviewing assumptions used to calculate the insurance liabilities and determining whether the sum of the existing contract liabilities and the present value of future gross premiums is sufficient to cover the present value of future benefits to be paid to or on behalf of policyholders and settlement costs and recover unamortized present value of future profits. Anticipated investment income, based on F&G’s experience, is considered when performing premium deficiency testing for long-duration contracts. During 2024, F&G did not pass premium deficiency testing for the traditional life block of business, related to the recoverability of VOBA. Due to that result, F&G began accruing a liability in the fourth quarter of 2024 that increases the amortization of traditional life VOBA. The liability balance was immaterial at December 31, 2024. During 2023, F&G was not required to establish any additional liabilities as a result of premium deficiency testing. Note K - Accounts Payable and Accrued Liabilities As of December 31, 2024 and 2023, the total URL balance of $ 401 million and $ 270 million, respectively, is included in Accounts payable and accrued liabilities on the Consolidated Balance Sheets. The following table presents a reconciliation of Accounts payable and accrued liabilities to the Consolidated Balance Sheets as of December 31, 2024 and 2023 (in millions): December 31, 2024 2023 Salaries and incentives $ 116 $ 99 Accrued benefits 67 60 URL 401 270 Trade accounts payable 147 297 Liability for policy and contract claims 102 92 Retained asset account 60 81 Remittances and items not allocated 224 284 Option collateral liabilities 679 588 Lease liability 10 11 Investment purchases payable 100 21 Contingent consideration 74 — Accrued interest on notes payable 31 23 Interest rate swaps 10 — Other accrued liabilities 198 185 Accounts payable and accrued liabilities $ 2,219 $ 2,011 190 The following tables roll forward URL for our universal life product for the years ended December 31, 2024 and 2023 (in millions): December 31, 2024 2023 Balance at January 1, $ 270 $ 166 Capitalization 151 119 Amortization ( 20 ) ( 15 ) Balance at December 31, $ 401 $ 270 For IUL the cash flow assumptions used to amortize URL reflect the Company’s best estimates for policyholder behavior. We review cash flow assumptions annually, generally in the third quarter. In 2024, F&G undertook a review of all significant assumptions, resulting in a revision to the IUL assumptions involving premium persistency and mortality improvement. In 2023, F&G undertook a review of all significant assumptions, resulting in revisions to IUL assumptions involving surrender rates, partial withdrawal rates, mortality improvement, premium persistency, and option budgets. Note L - Notes Payable Notes payable consists of the following (dollars in millions): December 31, 2024 2023 6.250 % F&G Notes, net of $ 8 and $ 0 of deferred issuance costs at December 31, 2024 and 2023, respectively $ 492 $ — 6.50 % F&G Notes, net of $ 5 and $ 0 of deferred issuance costs at December 31, 2024 and 2023, respectively 545 — 7.95 % F&G Notes, net of $ 9 and $ 9 of deferred issuance costs at December 31, 2024 and 2023, respectively 336 336 7.40 % F&G Notes, net of $ 3 and $ 5 of deferred issuance costs at December 31, 2024 and 2023, respectively 497 495 5.50 % F&G Notes, net of $ 1 and $ 11 of purchase premium at December 31, 2024 and 2023, respectively 301 561 Revolving Credit Facility - Short-term, net of deferred issuance costs of $ 0 and $ 3 at December 31, 2024 and 2023, respectively — 362 Total $ 2,171 $ 1,754 6.250 % F&G Notes - On October 4, 2024, F&G completed its public offering of $ 500 million aggregate principal amount of its 6.250 % Senior Notes due 2034. The 6.250 % F&G Notes were issued at 99.36 % of face value net of deferred issuance costs of approximately $ 8 million. The 6.250 % F&G Notes are guaranteed on an unsecured, unsubordinated basis by each of F&G’s subsidiaries that are guarantors of F&G’s obligations under its existing credit agreement. The 6.250 % F&G Notes mature on October 4, 2034, and become callable on July 4, 2034. Interest is payable semi-annually at a fixed rate of 6.250 %, and if the 6.250 % F&G Notes are downgraded, the interest rate payable is subject to adjustment from time to time per the terms of the indenture. A portion of the net proceeds were used to pay off the outstanding balance of $ 365 million on the Company’s revolving credit facility described below. F&G intends to use the remaining net proceeds of this offering for general corporate purposes, including the support of organic growth opportunities. 6.50 % F&G Senior Notes - On June 4, 2024, F&G completed its public offering of $ 550 million aggregate principal amount of its 6.50 % Senior Notes due 2029. The 6.50 % F&G Notes were issued at 99.74 % of face value net of deferred issuance costs of approximately $ 6 million. The 6.50 % F&G Notes are guaranteed on an unsecured, unsubordinated basis by each of F&G’s subsidiaries that are guarantors of F&G’s obligations under its existing credit agreement. The 6.50 % F&G Notes mature on June 4, 2029, and become callable on May 4, 2029. Interest is payable semi-annually at a fixed rate of 6.50 %, and, if the 6.50 % F&G Notes are downgraded, the interest rate payable is subject to adjustment from time to time per the terms of the indenture. F&G used a portion of the net proceeds from the 6.50 % F&G Notes offering to repay an aggregate principal amount of $ 250 million of the 5.50 % F&G Notes described below and intends to use the remaining net proceeds of this offering for general corporate purposes, which may include the repurchase, redemption or repayment at maturity of outstanding indebtedness. 7.95 % F&G Notes - On December 6, 2023, F&G issued $ 345 million of its 7.95 % Senior Notes due 2053 (the 191 “ 7.95 % F&G Notes”). The 7.95 % F&G Notes were issued at par, net of deferred issuance costs of approximately $ 9 million. The 7.95 % F&G Notes are senior unsecured, unsubordinated obligations of F&G and are guaranteed by each of F&G’s subsidiaries that are guarantors of F&G’s obligations under its existing credit agreement. The 7.95 % F&G Notes mature on December 15, 2053, and become callable on or after December 15, 2028. Interest is payable quarterly at a fixed rate of 7.95 %, and, if the 7.95 % F&G Notes are downgraded, the interest rate payable is subject to adjustment from time to time per the terms of the indenture. 7.40 % F&G Notes - On January 13, 2023, F&G issued $ 500 million of its 7.40 % F&G Notes due 2028 (the “ 7.40 % F&G Notes”). The 7.40 % F&G Notes were issued at par, net of deferred issuance costs of approximately $ 6 million. The 7.40 % F&G Notes are senior, unsecured unsubordinated obligations of F&G and are fully and unconditionally guaranteed on an unsecured, unsubordinated basis by each of F&G’s subsidiaries that are guarantors of F&G’s obligations under its existing credit agreement. The 7.40 % F&G Notes mature on January 13, 2028, and become callable on or after December 13, 2027. Interest is payable semi-annually at a fixed rate of 7.40 %, and if, the 7.40 % F&G Notes are downgraded, the interest rate payable is subject to adjustment from time to time per the terms of the indenture. 5.50 % F&G Notes - On April 20, 2018, FGLH, our indirect wholly owned subsidiary, completed a debt offering of $ 550 million aggregate principal amount of 5.50 % senior notes due May 1, 2025 at 99.5 % of face value for proceeds of $ 547 million. As a result of the FNF acquisition, a premium of $ 39 million was established for these notes and is being amortized over the remaining life of the debt through 2025. In conjunction with the acquisition, FNF became a guarantor of FGLH’s obligations under the 5.50 % F&G Notes and agreed to fully and unconditionally guarantee the 5.50 % F&G Notes, on a joint and several basis. A portion of the net proceeds of the 6.50 % F&G Notes were used for a $ 250 million cash tender offer of the 5.50 % F&G Notes in June 2024. Refer to Note A - Business and Summary of Significant Accounting Policies for a discussion of the redemption of the 5.50 % F&G Notes on February 1, 2025. Revolving Credit Facility - On November 22, 2022, we entered into a Credit Agreement with certain lenders (the “Lenders”) and Bank of America, N.A. as administrative agent, swing line lender and an issuing bank, pursuant to which the Lenders have made available an unsecured revolving credit facility in an aggregate principal amount of $ 550 million to be used for working capital and general corporate purposes. On February 21, 2023, we entered into an amendment with the Lenders to increase the available aggregate principal amount of the Credit Agreement by $ 115 million to $ 665 million. On February 16, 2024, we entered into an amendment with the Lenders to increase the available aggregate principal amount of the Credit Agreement by $ 85 million to $ 750 million, and the maturity date of the Credit Agreement was extended from November 22, 2025 to November 22, 2027. Pricing and advance rates remain unchanged. Financial covenants also remained essentially the same. Revolving loans under the Credit Agreement 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 The Secured Overnight Financing Rate (“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. In addition, we pay a facility fee of between 20.0 and 45.0 basis points on the entire facility, also depending on the non-credit-enhanced, senior unsecured long-term debt ratings, which is payable quarterly in arrears. The average variable interest rate on the revolving credit facility for the period the debt was outstanding in 2024 was 7.06 % compared to 7.11 % for the year ended December 31, 2023. F&G used a portion of the net proceeds from the 6.250 % F&G Notes offering to pay off the revolving credit facility in October 2024. As of December 31, 2024, no balance was outstanding on the revolving credit facility, and we had $ 750 million of remaining borrowing availability. FNF Credit Facility - On December 29, 2020, we entered into a revolving note agreement with FNF for up to $ 200 million capacity (the "FNF Credit Facility") to be used for working capital and other general corporate 192 purposes. No amounts were outstanding under this revolving note agreement as of December 31, 2024 or December 31, 2023. The FNF Credit Facility matures on October 29, 2025 or when the Revolving Credit Facility described above is terminated, whichever occurs first. Refer to Note A - Business and Summary of Significant Accounting Policies for a discussion related to the public offering of its $ 375 million aggregate principal amount of the 7.300 % F&G Junior Subordinated Notes completed on January 13, 2025. Covenants - The Credit Agreement imposes and the indentures governing the 6.250 % F&G Notes, 6.50 % F&G Senior Notes , 7.95 % F&G Notes, the 7.40 % F&G Notes and the 5.50 % F&G Notes impose certain operating and financial restrictions on F&G. The Credit Agreement imposes certain financial covenants on F&G, and as of December 31, 2024, we were in compliance with all covenants. Interest Expense - Amortization of deferred issuance costs and purchase premiums are recognized as a component of interest expense. Interest expense on F&G’s outstanding notes payable for the years ended December 31, 2024, 2023 and 2022 was as follows (in millions): Year ended December 31, 2024 2023 2022 6.250 % F&G Notes $ 8 $ — $ — 6.50 % F&G Notes 21 — — 7.95 % F&G Notes 28 1 — 7.40 % F&G Notes 38 37 — 5.50 % F&G Notes 14 22 22 Revolving Credit Facility 23 37 1 FNF Promissory Note (a) — — 6 Total $ 132 $ 97 $ 29 (a) In June 2022, the $ 400 million FNF Promissory Note was exchanged for F&G common stock, and the note was retired. Maturities - Gross principal maturities of notes payable at December 31, 2024 are as follows (in millions): 2025 $ 300 2026 — 2027 — 2028 500 2029 550 Thereafter 845 Total $ 2,195 Note M - Supplemental Cash Flow Information The following supplemental cash flow information is provided with respect to certain cash payment and non-cash investing and financing activities (in millions). Year ended December 31, 2024 2023 2022 Cash paid (refunded) for: Interest paid $ 127 $ 84 $ 34 Income taxes paid (refunded) 8 4 ( 72 ) Deferred sales inducements 319 168 87 Non-cash investing and financing activities: Investments received from pension risk transfer premiums $ 129 $ 464 $ — Change in proceeds of sales of investments available for sale receivable in period ( 79 ) 34 115 Change in purchases of investments available for sale payable in period 84 20 ( 10 ) 193 Refer to Note P -Acquisitions for information on the acquisitions of Roar and PALH including the assets acquired and liabilities and non-controlling interest assumed as of the respective acquisition dates. Note N - Commitments and Contingencies Contingent Consideration Under the terms of the purchase agreement for Roar, we have agreed to make cash payments of up to approximately $ 90 million over a three-year period upon the achievement by Roar of certain EBITDA milestones. The contingent consideration is recorded at fair value in Accounts payable and accrued liabilities on the Consolidated Balance Sheets. Refer to Note P - Acquisitions for more information on the Roar acquisition and refer to Note B - Fair Value of Financial Instruments for more information regarding the fair value of the contingent consideration. Legal and Regulatory Contingencies In the ordinary course of business, we are involved in various pending and threatened litigation matters related to our operations, some of which include claims for punitive or exemplary damages. Like other companies, our ordinary course litigation includes a number of class action and purported class action lawsuits, which make allegations related to aspects of our operations. We believe that no actions, other than the matters discussed below, if any, depart from customary litigation incidental to our business. We review lawsuits and other legal and regulatory matters (collectively “legal proceedings”) on an ongoing basis when making accrual and disclosure decisions. When assessing reasonably possible and probable outcomes, management bases its decision on its assessment of the ultimate outcome assuming all appeals have been exhausted. For legal proceedings in which it has been determined that a loss is both probable and reasonably estimable, a liability based on known facts and that represents our best estimate has been recorded. Our accrual for legal and regulatory matters was insignificant as of December 31, 2024 and 2023. We do not consider (i) the amounts we have currently recorded for all legal proceedings in which it has been determined that a loss is both probable and reasonably estimable and (ii) reasonably possible losses for all pending legal proceedings to be material to our financial statements either individually or in the aggregate. Actual losses may materially differ from the amounts recorded and the ultimate outcome of our pending legal proceedings is generally not yet determinable. While some of these matters could be material to our operating results or cash flows for any particular period if an unfavorable outcome results, at present we do not believe that the ultimate resolution of currently pending legal proceedings, either individually or in the aggregate, will have a material adverse effect on our financial condition. Fidelity & Guaranty Life Insurance Company (“FGL Insurance”) is a defendant in a lawsuit filed in U.S. District Court for the Southern District of Texas styled, Insurance Distribution Consulting, LLC v. Fidelity & Guaranty Life Insurance Company, Case No. 3:23-cv-00126. Plaintiff, which provides consulting services to independent marketing organizations (“IMO”), alleges FGL Insurance failed to pay commissions owed to Plaintiff and diverted commissions from one of Plaintiff’s IMO customers, Syncis, to another IMO, Freedom Equity Group, LLC (“Freedom Equity”). Further, Plaintiff alleges after FGL Insurance purportedly purchased a partial ownership interest in Syncis and Freedom Equity, Plaintiff offered to sell its interests in its contracts with Syncis but FGL Insurance declined, leading Plaintiff to allege a statutory violation of 42 U.S.C. §1981 for discrimination where Plaintiff’s sole member is a racial minority. Plaintiff claims its damages for breach of contract from FGL Insurance’s purported failure to pay commissions are more than $ 162 million and its damages from FGL Insurance’s declining to purchase Plaintiff’s interest in its contracts with Syncis are over $ 11 million. FGL Insurance denies the allegations and denies any contract or agreement existed with Plaintiff to pay commissions. Dispositive motions are due April 21, 2025, and the case is expected to be set for trial in the summer of 2025. FGL Insurance will vigorously contest the Plaintiff’s claims in the action. As this case continues to evolve, it is not possible to reasonably estimate the probability that Plaintiff will ultimately prevail on its claims or that FGL Insurance will be held liable for the dispute. At this time, FGL Insurance does not believe the lawsuit will have a material impact on its business, operations, or financial results. 194 On May 28, 2024, a stockholder derivative lawsuit styled, Roofers Local 149 Pension Fund v. Fidelity National Financial Inc., William P. Foley, F&G Annuities & Life Inc., C.A. No. 2024-0562-LWW, was filed in the Chancery Court of the State of Delaware against defendants FNF, in its capacity as F&G’s controlling stockholder, and William P. Foley, Executive Chairman of F&G and Chairman of FNF, alleging breach of fiduciary duty related to F&G’s January 11, 2024 sale of $ 250 million of 6.875 % Series A Mandatory Convertible Preferred Stock to FNF. Plaintiff alleges that, based upon the unfair process and unfair price, the preferred stock investment was advantageous to FNF and unfair to F&G. Plaintiff seeks to recover damages on behalf of F&G for the alleged unfair preferred stock investment and the adoption of certain corporate governance measures. On July 24, 2024, F&G filed its answer to plaintiff’s complaint, and the remaining defendants filed their motion to dismiss. On September 23, 2024, plaintiff voluntarily dismissed its action against William P. Foley, leaving FNF’s motion to dismiss pending with briefing completed on October 24, 2024. On February 4, 2025, FNF argued the motion to dismiss before the court. The defendants will vigorously contest the plaintiff’s claims in the action. F&G is a defendant in two putative class action lawsuits that allege some customers’ personally identifiable information was disclosed due to a vulnerability in the MOVEit file transfer software. F&G’s vendor, Pension Benefit Information, LLC (“PBI”), used the MOVEit software in the course of providing audit and address research services to F&G and many other corporate customers. Miller v. F&G, No. 4:23-cv-00326 (“Miller”), was filed against F&G in the Southern District of Iowa on August 31, 2023. Miller alleges that he is a F&G customer whose personally identifiable information was disclosed in the MOVEit incident and brings common law tort and implied contract claims. Plaintiff seeks injunctive relief and damages. Cooper v. Progress Software Corp., No. 1:23-cv-12067 (“Cooper”), was filed against F&G and five other defendants in the District of Massachusetts on September 7, 2023. Cooper also alleges that he is a F&G customer whose personally identifiable information was disclosed and brings similar common law tort claims and alleges claims as a purported third-party beneficiary of an alleged contract. Plaintiff seeks declaratory and injunctive relief and damages. Well over 150 similar lawsuits have been filed against other entities impacted by the MOVEit incident including a number of such lawsuits related to PBI’s use of MOVEit. On October 4, 2023, the U.S. Judicial Panel on Multidistrict Litigation created a multidistrict litigation (“MDL”) pursuant to 28 U.S.C. § 1407 to handle all litigation brought by individuals whose information was potentially compromised in connection with the alleged MOVEit vulnerability. Both Miller and Cooper have been transferred to the MDL and are proceeding under MDL Case No. 1:23-md-03083-ADB-PGL. Plaintiffs filed amendments to their complaints, and the Defendants filed their omnibus motion to dismiss for lack of Article III standing on July 23, 2024. The case is proceeding under a modified bellwether structure to decide critical issues and facilitate reciprocal discovery. At this time, F&G does not believe the incident will have a material impact on its business, operations, or financial results. From time to time, we receive inquiries and requests for information from state insurance departments, attorneys general and other regulatory agencies about various matters relating to our business. Sometimes these take the form of civil investigative demands or subpoenas. We cooperate with all such inquiries, and we have responded to or are currently responding to inquiries from multiple governmental agencies. From time to time, we are assessed fines for violations of regulations or other matters or enter into settlements with such authorities, which may require us to pay fines or claims or take other actions. We do not anticipate such fines and settlements, either individually or in the aggregate, will have a material adverse effect on our business, operations or financial condition. 195 Commitments We have unfunded commitments as of December 31, 2024 based upon the timing of when investments and agreements are executed or signed compared to when the actual investments and agreements are funded or closed. Some investments require that funding occur over a period of months or years. A summary of unfunded commitments by commitment type as of December 31, 2024 is included below (in millions): December 31, 2024 Commitment Type Unconsolidated VIEs: Limited partnerships $ 1,138 Whole loans 278 Fixed maturity securities, ABS 338 Direct Lending 1,618 Other fixed maturity securities, AFS 70 Commercial mortgage loans 116 Residential mortgage loans 35 Other assets 162 Other invested assets 134 Total $ 3,889 Concurrent with the Roar purchase agreement, we executed a separate loan agreement with the sellers of Roar for us to lend up to $ 40 million. The loan matures on August 5, 2027. The principal balance outstanding as of December 31, 2024 was $ 11 million and is included in Prepaid expenses and other assets on the Consolidated Balance Sheets. Changes in fair value are reported within Recognized gains and losses, net in the Consolidated Statements of Operations. Interest income is recorded in Interest and investment income in the Consolidated Statements of Operations and recognized when earned. The remainder of the unfunded loan commitment is included in the unfunded commitments table above in the “Other assets” line item. Refer to Note P - Acquisitions for more information on the Roar acquisition, and refer to Note B - Fair Value of Financial Instruments for information regarding the fair value calculation of this loan receivable. See Note A - Business and Summary of Significant Accounting Policies , for discussion of funding agreements that have been issued pursuant to the FABN Program as well as to the FHLB that are included in Contractholder funds. The Company leases office space under operating leases. The largest leases expire in 2030. Rent expense and minimum rental commitments under all leases are immaterial. F&G has a reinsurance agreement with Kubera to cede certain FIA statutory reserves on a coinsurance funds withheld basis, net of applicable existing reinsurance. To enhance Kubera's ability to pay its obligations under the amended reinsurance agreement, effective October 31, 2021, F&G entered into a Variable Note Purchase Agreement (the “NPA”), whereby F&G agreed to fund a note to Kubera to be used to ultimately settle with F&G, with principal increases up to a maximum amount of $ 300 million, to the extent a potential funding shortfall (treaty assets are less than the total funding requirement) is projected relative to the business ceded to Kubera from F&G as part of the amended reinsurance agreement. The potential funding shortfall will be determined quarterly and, among other items, is impacted by the market value of the assets in the funds withheld account related to the reinsurance agreement and Kubera's capital as calculated on a Bermuda regulatory basis. The NPA matures on November 30, 2071. Based on the current level of the treaty assets and projections that these policies will be profitable over the lifetime of the agreement, we do not expect significant fundings to occur under the NPA. As of December 31, 2024 and 2023, the amount funded under the NPA was insignificant. Note O - Insurance Subsidiary Financial Information and Regulatory Matters 196 Our U.S. insurance subsidiaries, FGL Insurance, FGL NY Insurance, Raven Re and Corbeau Re file financial statements with state insurance regulatory authorities and, except for Raven Re, with the National Association of Insurance Commissioners (“NAIC”) that are prepared in accordance with Statutory Accounting Principles (“SAP”) prescribed or permitted by such authorities, which may vary materially from GAAP. Prescribed SAP includes the Accounting Practices and Procedures Manual of the NAIC as well as state laws, regulations and administrative rules. Permitted SAP encompasses all accounting practices not so prescribed but approved by state regulators. The principal differences between SAP financial statements and financial statements prepared in accordance with GAAP are that SAP financial statements do not reflect VOBA, DAC, and DSI, some bond portfolios may be carried at amortized cost, assets and liabilities are presented net of reinsurance, contractholder liabilities are generally valued using more conservative assumptions and certain assets are non-admitted. Accordingly, SAP operating results and SAP capital and surplus may differ substantially from amounts reported in the GAAP basis financial statements for comparable items. Our non-U.S. insurance subsidiaries, F&G Life Re (Bermuda) and F&G Cayman Re (Cayman Islands) file financial statements with their respective regulators. U.S. Companies Our principal insurance subsidiaries' statutory financial statements are based on a December 31 year end. Statutory net income and statutory capital and surplus of our wholly owned U.S. regulated insurance subsidiaries were as follows (in millions): Subsidiary (state of domicile) (a) FGL Insurance (IA) FGL NY Insurance (NY) Raven Re (VT) Corbeau Re (VT) Statutory Net income (loss): Year ended December 31, 2024 $ 150 $ 8 $ 54 $ ( 458 ) Year ended December 31, 2023 ( 462 ) 5 60 ( 644 ) Year ended December 31, 2022 ( 243 ) ( 15 ) ( 111 ) — Statutory Capital and Surplus: December 31, 2024 $ 1,654 $ 97 $ 168 $ 178 December 31, 2023 2,009 86 140 171 (a) FGL NY Insurance, Raven Re and Corbeau Re are subsidiaries of FGL Insurance, and the columns should not be added together. Corbeau Re was incorporated on September 1, 2023. Regulation - U.S. Companies FGL Insurance, FGL NY Insurance, Raven Re and Corbeau Re’s respective statutory capital and surplus satisfy the applicable minimum regulatory requirements. To enhance the regulation of insurers’ solvency, the NAIC adopted a model law to implement risk-based capital (“RBC”) requirements for life, health and property and casualty insurance companies. All states have adopted the NAIC’s model law or a substantially similar law. RBC is used to evaluate the adequacy of capital and surplus maintained by an insurance company in relation to risks associated with: (i) asset risk, (ii) insurance risk, (iii) interest rate risk, and (iv) business risk. As of the most recent annual statutory financial statements filed with insurance regulators, the RBC ratios for each of our U.S. Insurance Companies exceeded the minimum RBC requirements. Dividends The insurance laws of Iowa and New York regulate the amount of dividends that may be paid in any year by FGL Insurance and FGL NY Insurance, respectively. FGL Insurance dividends are paid as declared by its Board of Directors. Pursuant to Iowa insurance law, any proposed payment of a dividend is classified as an “extraordinary dividend” if it, together with the aggregate fair market value of other dividends or distributions made during the preceding twelve months, exceeds the greater of (i) 197 10% of capital and surplus as of the preceding December 31 or (ii) net gain from operations before realized capital gains or losses for twelve month period ending December 31 of the preceding year. No extraordinary dividends may be paid without prior approval of the IID. In addition, no ordinary dividends may be paid except from the earned profits arising from FGL Insurance’s business, which does not include contributed capital or contributed surplus. FGL Insurance did not pay dividends to its parent, Fidelity & Guaranty Life Holdings, Inc. (“FGLH”), for the years ended December 31, 2024, 2023, and 2022. Pursuant to the limitations described above, it is estimated that FGL Insurance’s maximum ordinary dividend capacity for 2025 is $ 0 . Each year, FGL NY Insurance may pay a certain limited amount of ordinary dividends or other distributions without being required to obtain the prior consent of the New York State Department of Financial Services (“NYDFS”). However, to pay any dividends or distributions in a calendar year immediately following a calendar year in which the FGL NY’s net gain from operations, not including realized capital gains, was negative, approval from the NY Superintendent is required. FGL NY Insurance has historically not paid dividends. Based on the limitations described above, it’s estimated that the maximum amount of ordinary dividends FGL NY Insurance will be permitted to distribute during 2025 is approximately $ 10 million. Raven Re and Corbeau Re dividends are paid as declared by their Board of Directors. Under the laws of the State of Vermont, no captive insurance company may pay a dividend out of, or other distribution with respect to, capital or surplus, without prior approval. Based on the limitations described above, no dividends may be paid in 2025 by either Raven Re or Corbeau Re without prior regulatory approval. Prescribed and permitted practices FGL Insurance - FGL Insurance applies Iowa-prescribed accounting practices prescribed by Iowa Administrative Code (“ IAC “) Chapter 97, “ Accounting for Certain Derivative Instruments Used to Hedge the Growth in Interest Credited for Indexed Insurance Products and Accounting for the Indexed Insurance Products Reserve, ” for its indexed annuities and IUL products. Under these alternative accounting practices, the equity option derivative instruments that hedge the growth in interest credited on index products are accounted for at amortized cost with the corresponding amortization recorded as a decrease to net investment income and indexed annuity reserves are calculated based on Standard Valuation Law and Actuarial Guideline XXXV assuming the market value of the equity options associated with the current index term is zero regardless of the observable market value for such options. In addition, based on a permitted practice received from the IID, FGL Insurance carries one of its limited partnership interests which qualifies for accounting under SSAP No. 48, “Investments in Joint Ventures, Partnerships and Limited Liability Companies,” on a net asset value per share basis. This is a departure from SSAP No. 48 which requires such investments to be carried based on the investees underlying GAAP equity (prior to any impairment considerations). This limited partnership investment was redeemed as of December 31, 2024. In addition, the financial statements of Raven Re and Corbeau Re include certain permitted practices approved by the Vermont Department of Financial Regulations. Without these permitted practices, the carry value of these two entities would be zero . The prescribed and permitted practices resulted in increases to statutory capital and surplus of $ 454 million and $ 194 million at December 31, 2024 and 2023, respectively. FGL Insurance’s statutory carrying value of Raven Re reflects the effect of permitted practices Raven Re received to treat the available amount of a letter of credit as an admitted asset, which increased Raven Re’s statutory capital and surplus by $ 175 million and $ 200 million at December 31, 2024 and 2023, respectively. In addition, FGL Insurance’s statutory carrying value of Corbeau Re reflects the effect of permitted practices Corbeau Re received to treat the excess of loss as an admitted asset, which increased Corbeau Re’s statutory capital and surplus by $ 1,230 198 million and $ 765 million at December 31, 2024 and 2023, respectively. Refer to Note E - Reinsurance for a discussion of the XOL and letter of credit. Raven Re - Raven Re is also permitted to follow Iowa prescribed statutory accounting practice for its reserves on reinsurance assumed from FGL Insurance and also has approval to include as an admitted asset the value of a letter of credit serving as collateral for reinsurance credit taken by FGL Insurance. Without such permitted statutory accounting practices, Raven Re’s statutory capital and surplus (deficit) would be $( 13 ) million and $( 89 ) million as of December 31, 2024 and 2023, respectively, and its risk-based capital would fall below the minimum regulatory requirements. The letter of credit facility is collateralized by NAIC 1 rated debt securities. If the permitted practice was revoked, the letter of credit could be replaced by the collateral assets with Nomura’s consent (refer to discussion of letter of credit in Note E- Reinsurance ). FGL Insurance’s statutory carrying value of Raven Re was $ 168 million and $ 140 million at December 31, 2024 and 2023, respectively. Corbeau Re - Corbeau Re has four permitted practices pursuant to Vermont Statute, Title 8, Chapter 141 – (8 V.S.A. § 6048k(a)(2), whereby the Vermont Department authorizes the Company to (i) account for the amount equal to the excess of loss amount (“XOL Asset”) as an asset on its statutory financial statements; (ii) calculate the reserves with respect to the Retirement Pro Contracts in accordance with the following reserving methodology: the reserves are calculated as the present value of reinsured benefits when account value equals zero less the present value of reinsurance premiums from the winning integrated stream, floored at zero and capped as necessary to keep the net statutory reserve at the net cash surrender value. For benefits associated with all other contracts (“the GMWB Riders”), the reserves are calculated as the statutory reserves for the entire contract (i.e., the base contracts plus the GMWB Riders) minus the statutory reserves for the base contracts only (“Reserve Calculation Permitted Practice”); (iii) calculate its company action level risk-based capital as defined in Section 8301(13)(A) and, calculated using the risk-based capital factors and formulas prescribed by the NAIC, applying a factor of 0.62% to the XOL Asset Value; and (iv) annually perform a total company solvency analysis in lieu of cash flow testing and actuarial opinion and memorandum under Section 2010-2 of the Vermont Administrative Code. In addition, Corbeau Re assumes reserves that are equal to the reserves ceded by FGL Insurance which includes application of IAC Insurance 191, Chapter 97, “ Accounting for Certain Derivative Instruments Used to Hedge the Growth in Interest Credited for Indexed Insurance Products and Accounting for the Indexed Insurance Products Reserve .” Without such permitted statutory accounting practices, the Company’s statutory capital and surplus (deficit) would be $( 1,052 ) million and $( 594 ) million as of December 31, 2024 and 2023, respectively, and its risk-based capital would fall below the minimum regulatory requirements. FGL Insurance’s statutory carrying value of Corbeau Re was $ 178 million and $ 171 million at December 31, 2024 and 2023, respectively. FGL NY Insurance - As of December 31, 2024 and 2023, FGL NY Insurance did not follow any prescribed or permitted statutory accounting practices that differ from the NAIC's statutory accounting practices. Non-U.S. Companies Our non-U.S. insurance subsidiaries, F&G Cayman Re and F&G Life Re, file financial statements with their respective regulators. For the annual period ended December 31, 2023, F&G Cayman Re began to file financial statements that are prepared in accordance with SAP prescribed or permitted by such authorities, which may vary materially from GAAP. Accordingly, SAP operating results and SAP capital and surplus may differ substantially from amounts reported in the GAAP basis financial statements for comparable items. F&G Cayman Re has two permitted practices which have been approved by the Cayman Islands Monetary Authority (“CIMA”). F&G Cayman Re has a permitted practice approved by CIMA to include, as an admitted asset, the value of the letters of credit (“LOCs”) acquired to support reinsurance transactions. Also, F&G Cayman Re has a permitted practice, approved by CIMA, for PRT reinsurance transactions to use U.S. statutory book value adjusted for best estimate reserve calculations (consistent with GAAP prior to ASU 2018-12, Financial Services-Insurance (Topic 944), Targeted Improvements to the Accounting for Long-Duration Contracts). These reserve calculations will be subject to annual assumption reviews consistent with other GAAP liability balances. If F&G Cayman Re had not been permitted to calculate PRT assumed reserves using best estimate reserve calculations or include the value of the LOCs as an admitted asset, statutory surplus would be $( 64 ) million and $ 102 million as of December 31, 199 2024 and December 31, 2023, respectively. Without such permitted statutory accounting practices, F&G Cayman Re’s risk-based capital would fall below the minimum regulatory requirements as of December 31, 2024 and December 31, 2023. F&G Life Re files financial statements based on GAAP. Net income and capital and surplus of our wholly owned Cayman Islands and Bermuda regulated insurance subsidiaries under SAP and GAAP, respectively, were as follows (in millions): Subsidiary (country of domicile) F&G Cayman Re (Cayman Islands) F&G Life Re (Bermuda) Statutory Net income (loss): Year ended December 31, 2024 $ ( 11 ) $ 139 Year ended December 31, 2023 133 151 Year ended December 31, 2022 71 ( 339 ) Statutory Capital and Surplus (Deficit): December 31, 2024 $ 734 $ 123 December 31, 2023 543 11 Regulation - Bermuda F&G Life Re is a Bermuda exempted company incorporated under the Companies Act 1981, as amended (the “Bermuda Companies Act”) and registered as a Class E insurer under the Insurance Act 1978, as amended, and its related regulations (the “Bermuda Insurance Act”). F&G Life Re is regulated by the Bermuda Monetary Authority (“BMA”). In addition to the requirements under the Bermuda Companies Act (as discussed below), the Bermuda Insurance Act limits the maximum amount of annual dividends and distributions that may be paid or distributed by F&G Life Re without prior regulatory approval. F&G Life Re is prohibited from declaring or paying a dividend if it fails to meet its minimum solvency margin, or ECR, or if the declaration or payment of such dividend would cause such breach. If F&G Life Re were to fail to meet its minimum solvency margin on the last day of any financial year, it would be prohibited from declaring or paying any dividends during the next financial year without the approval of the BMA. In addition, as a Class E insurer, F&G Life Re must not declare or pay a dividend to any person other than a policyholder unless the value of the assets of such insurer, as certified by the insurer’s approved actuary, exceeds its liabilities (as so certified) by the greater of its margin of solvency or ECR. In the event a dividend complies with the above, F&G Life Re must ensure the amount of any such dividend does not exceed that excess. Furthermore, as a Class E insurer, F&G Life Re must not declare or pay a dividend in any financial year which would exceed 25% of its total statutory capital and surplus, as set out in its previous year’s Bermuda statutory financial statements, unless at least seven days before payment of such dividend F&G Life Re files with the BMA an affidavit signed by at least two directors of F&G Life Re and its principal representative under the Bermuda Insurance Act stating that, in the opinion of those signing, declaration of such dividend has not caused the insurer to fail to meet its relevant margins. The Bermuda Companies Act also limits F&G Life Re’s ability to pay dividends and make distributions to its shareholders. F&G Life Re is not permitted to declare or pay a dividend, or make a distribution out of its contributed surplus, if it is, or would after the payment be, unable to pay its liabilities as they become due or if the realizable value of its assets would be less than its liabilities. F&G Life Re’s ability to pay dividends in 2025 is subject to the limitations described above. 200 Regulation - Cayman Islands F&G Cayman Re is a Cayman Islands exempted company incorporated under the Companies Act, as amended (2023 Revision) and licensed as a Class D insurer in the Cayman Islands under the Insurance Act, 2010 as amended and its related regulation (the “Cayman Islands Insurance Act”). F&G Cayman Re is regulated by CIMA. F&G Cayman Re dividends are paid as declared by its Board of Directors. The dividends will be in accordance with CIMA regulatory requirements and contractual obligations and any dividends require approval by CIMA. F&G Cayman Re can only request approval for dividends if (i) the ending capital, including considerations for future business plans, will maintain a surplus over the CIMA approved and permitted target modified RBC, and (ii) contractual language pursuant to the PRT reinsurance agreement requiring a US RBC above specified target is met. As of the most recent annual financial statement filed with CIMA, the RBC ratios for F&G Cayman Re exceeded these minimum requirements. Pursuant to the limitations described above, no dividends may be paid in 2025 by F&G Cayman Re without prior regulatory approval. The prescribed and permitted statutory accounting practices have no impact on our audited Consolidated Financial Statements, which are prepared in accordance with GAAP. Note P — Acquisitions Owned Distribution - Acquisition of Roar Joint Venture, LLC On January 2, 2024, F&G acquired a 70 % majority ownership stake in the equity of Roar Joint Venture, LLC (“Roar”). Roar wholesales life insurance and annuity products to banks and broker-dealers through a network of agents. Under the terms of the purchase agreement, the Company has agreed to make cash payments of up to approximately $ 90 million over a three-year period upon the achievement of certain EBITDA milestones of Roar. The initial purchase price is as follows (in millions): Cash paid for 70 % majority interest of Roar shares $ 269 Less: Cash acquired net of non-controlling interests 1 Net cash paid for 70 % majority interest of Roar 268 Initial fair value of contingent consideration 48 Total initial consideration $ 316 The following table summarizes the fair value amounts recognized for the assets acquired and liabilities assumed as of the acquisition date (in millions): Fair value as of January 2, 2024 Goodwill $ 268 Prepaid expenses and other assets 3 Other intangible assets 183 Total assets acquired 454 Accounts payable and accrued liabilities 2 Total liabilities assumed 2 Non-controlling interests (fair value determined using income approach) 136 Total liabilities assumed and non-controlling interests 138 Net assets acquired $ 316 201 The gross carrying value and weighted average estimated useful lives of Other intangible assets acquired in the Roar acquisition consist of the following (dollars in millions): Gross Carrying Value Estimated Useful Life (in years) Other intangible assets: Customer relationships $ 179 12 Definite lived trademarks, tradenames, and other 4 10 Total Other intangible assets $ 183 Goodwill consists primarily of intangible assets that do not qualify for separate recognition, such as the assembled workforce and synergies between the entities. The total amount of goodwill recorded is expected to be deductible for tax purposes. Roar’s revenues of $ 78 million and net earnings attributable to F&G common shareholders of $ 6 million are included in the Consolidated Statements of Operations for the year ended December 31, 2024. Unaudited Supplemental Pro-Forma Financial Results For comparative purposes, selected unaudited pro-forma consolidated results of operations of F&G for the year ended December 31, 2023 are presented below (in millions). Unaudited pro-forma results presented assume the acquisition of Roar occurred as of January 1, 2023 and are not intended to represent or be indicative of actual or future results of operations. Pro-forma results for the year ended December 31, 2024 are not included because there is no material variance from actual results due to the timing of the acquisition. Year ended December 31, 2023 Total revenues $ 4,561 Net earnings (loss) attributable to F&G common shareholders ( 94 ) Amounts reflect certain pro forma adjustments to revenue and net earnings (loss) attributable to F&G common shareholders that were directly attributable to the acquisition, primarily reflecting the elimination of intercompany activity between the entities. Owned Distribution - Acquisition of PALH, LLC On July 18, 2024, F&G acquired a 100 % ownership stake in the equity of PALH, LLC (“PALH”). PALH markets and sells life insurance and annuity products of various insurance carriers to individuals through a network of agents. Prior to the acquisition date, PALH owned a 70 % ownership stake in an operating company of which F&G owned 30 % equity. Immediately before the acquisition date, the fair value of F&G’s minority stake in the operating company was approximately $ 92 million, derived from the transaction value. The transaction value contemplates measures such as EBITDA margin, revenue growth over time periods and growth opportunities. This remeasurement resulted in a realized gain of $ 2 million recorded in Recognized gains and (losses), net in the Consolidated Statements of Operations during the year ended December 31, 2024 . The initial purchase price is as follows (in millions): Cash consideration $ 215 Less: Cash acquired 1 Net cash paid 214 Settlement of prepaid asset 8 Acquisition date fair value of previously held interests 92 Total consideration $ 314 202 The following table summarizes the fair value amounts recognized for the assets acquired and liabilities assumed as of the acquisition date (in millions): Fair value as of July 18, 2024 Goodwill $ 162 Prepaid expenses and other assets 5 Other intangible assets 149 Total assets acquired 316 Accounts payable and accrued liabilities 2 Total liabilities assumed 2 Net assets acquired $ 314 The gross carrying value and weighted average estimated useful lives of Other intangible assets acquired in the PALH acquisition consist of the following (dollars in millions): Gross Carrying Value Estimated Useful Life (in years) Other intangible assets: Customer relationships $ 131 20 Definite lived trademarks, tradenames, and other 18 5 to 10 Total Other intangible assets $ 149 Goodwill consists primarily of intangible assets that do not qualify for separate recognition, such as the assembled workforce and synergies between the entities. A portion of the total amount of goodwill recorded is expected to be deductible for tax purposes. PALH’s revenues and net loss attributable to F&G common shareholders of $ 3 million and $ 6 million, respectively, are included in the Consolidated Statements of Operations for the year ended December 31, 2024. Unaudited Supplemental Pro-Forma Financial Results For comparative purposes, selected unaudited pro-forma consolidated results of operations of F&G for the years ended December 31, 2024 and 2023 are presented below (in millions). Unaudited pro-forma results presented assume the acquisition of PALH occurred as of January 1, 2023 and are not intended to represent or be indicative of actual or future results of operations. Year ended December 31, 2024 2023 Total revenues $ 5,746 $ 4,504 Net earnings (loss) attributable to F&G common shareholders 616 ( 69 ) Amounts reflect certain pro forma adjustments to revenue and net earnings (loss) attributable to F&G common shareholders that were directly attributable to the acquisition, primarily reflecting the elimination of intercompany activity between the entities. Note Q - Related Party Transactions The Company has determined that related parties would fall into the following categories; (i) affiliates of the entity, (ii) entities for which investments in their equity securities would be required to be accounted for by the equity method by the investing entity, (iii) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management, (iv) principal owners ( greater than 10% equity stake) of the entity and members of their immediate families, (v) management (including FNF’s Board of Directors, Chief Executive Officer, and other persons responsible for achieving the objectives of the entity and who have the 203 authority to establish policies and make decisions) of the entity and other members of their immediate families, (vi) other parties with which the entity may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests (vii) other parties that can significantly influence management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate business, (viii) attorney in fact of a reciprocal reporting entity or any affiliate of the attorney in fact, and (ix) a U.S. manager of a U.S. branch or any affiliate of the U.S. manager of a U.S. branch. The Company has determined that FNF as well as FNF's directors and officers (along with their immediate family members) are related parties. FNF Separation Agreement F&G has entered into the Separation Agreement with FNF to provide for, among other things, the principal corporate transactions required to effect the separation and distribution, certain conditions to the separation and distribution and provisions governing our relationship with FNF with respect to and resulting from the separation and distribution. Refer to “ Risk Factors - Risks Related to the Separation and Distribution and our Status as a subsidiary of FNF” in this Annual Report on Form 10-K for additional information on the separation. Notes Payable For a description of our financing arrangements with FNF see Note L - Notes Payable to the Consolidated Financial Statements included in this Annual Report on Form 10-K. Governance Because FNF owns approximately 85 % of the shares of outstanding F&G common stock, we are a controlled company within the meaning of the corporate governance standards of the NYSE. A controlled company does not need its board of directors to have a majority of independent directors or to form an independent compensation committee or nominating and corporate governance committee. Refer to “ Risk Factors - Risks Related to the Separation and Distribution and our Status as a subsidiary of FNF” in this Annual Report on Form 10-K for additional information on management and governance. FNF $ 250 million Preferred Stock Investment Refer to Note U - Equity for a discussion of the $ 250 million preferred stock investment from FNF. Tax Sharing Agreement Refer to Note H - Income Taxes for a discussion of the tax matters agreement between FNF and the Company. Stock Split On June 24, 2022, a stock split in a ratio of 105,000 for 1 previously approved by the F&G board of directors became effective. FNF, as the sole shareholder, received, in the form of a dividend, 104,999 additional shares of common stock for each share of common stock held. Corporate Services Agreement FNF has entered into a Corporate Services Agreement with F&G, which we refer to as the Corporate Services Agreement. Pursuant to such agreement, FNF will provide F&G with certain corporate services, including internal 204 audit services, litigation and dispute management services, compliance services, corporate and transactional support services, SEC & reporting services, insurance and risk management services, human resources support services and real estate services. The Corporate Services Agreement terminates after the date upon which all corporate services or transition assistance have been terminated or upon the mutual agreement of the parties. F&G may terminate corporate services by providing 90 days written notice to FNF. Reverse Corporate Services Agreement F&G has entered into a Reverse Corporate Services Agreement with FNF. Pursuant to such agreement, F&G will provide FNF with certain services, including employee services. The Reverse Corporate Services Agreement terminates after the date upon which all corporate services or transition assistance has been terminated or upon the mutual agreement of the parties. FNF may terminate corporate services by providing 90 days written notice to F&G. Shared Services For the three-year period ended December 31, 2024, FNF provided certain operational support services for F&G including tax, insurance, legal, risk management, information technology, employee benefits and accounting. Expenses incurred by F&G for all services were insignificant for the years ended December 31, 2024, 2023 and 2022. Owned Distribution Investments On January 2, 2024, F&G acquired a 70 % majority ownership stake in the equity of Roar resulting in the consolidation of Roar in F&G’s financial statements. Under the terms of the purchase agreement, the Company has agreed to make cash payments of up to approximately $ 90 million over a three year period upon the achievement by Roar of certain EBITDA milestones. Refer to Note A - Business and Summary of Significant Accounting Policies - Principles of Consolidation and Basis of Presentation for discussions of contingent consideration and non-controlling interests and to Consolidated Statements of Equity for activity with non-controlling interests. Concurrent with the Roar purchase agreement, we executed a separate loan agreement with the sellers of Roar for us to lend up to $ 40 million. The principal balance outstanding as of December 31, 2024 was $ 11 million. Refer to Note B - Fair Value of Financial Instruments for information regarding the fair value calculation of this loan receivable. Refer to Note N - Commitments and Contingencies for more information regarding this loan commitment. Refer to Note P - Acquisitions for more information on the Roar acquisition. On July 18, 2024, F&G acquired a 100 % ownership stake in the equity of PALH. Prior to the acquisition date, PALH owned a 70 % ownership stake in an operating company of which F&G owned 30 % equity. In 2023, we purchased a 40 % minority ownership stake in DCMT and a 49 % minority ownership stake in Syncis. We have elected the fair value option to account for these investments and have included them in Investments in unconsolidated affiliates on the Consolidated Balance Sheets. For the years ended December 31, 2024, 2023 and 2022, we expensed approximately $ 119 million, $ 154 million, and $ 74 million in commissions on sales through our funded unconsolidated owned distribution investments and their affiliates. Acquisition expenses are deferred and amortized in Depreciation and amortization on the Consolidated Statements of Operations. Other Investments In 2023, we purchased a 30 % minority ownership stake in Quility. We have elected the fair value option to account for this investment and have included Quility in Investments in unconsolidated affiliates on the 205 Consolidated Balance Sheets. Commissions expensed on sales through Quility were insignificant for the years ended December 31, 2024 and 2023. The Company has a 10 % ownership stake in Specialty Lending Company LLC with a 50 % voting interest. Specialty Lending is a specialty finance company focused on consumer credit. Specialty Lending is accounted for using the equity method of accounting and is included in Investments in unconsolidated affiliates on the Consolidated Balance Sheets. Refer to Note A - Business and Summary of Significant Accounting Policies - Investments in Unconsolidated Affiliates for more information regarding the accounting for Investments in unconsolidated affiliates. Note R - Employee Benefit Plans FNF Stock Purchase Plan During the year ended December 31, 2022, our eligible employees could voluntarily participate in FNF's employee stock purchase plan (“ESPP”) sponsored by FNF. Company matching contributions are funded one year after employee contributions are made pursuant to the ESPP. We provided FNF an insignificant amount with respect to our matching contributions to the ESPP in the year ended December 31, 2022. Effective January 1, 2023, our employees were no longer eligible to participate in the ESPP. F&G Stock Purchase Plan On January 1, 2023, the Company adopted an Employee Stock Purchase Plan (“F&G ESPP”), enabling employees to purchase the Company stock in an amount between 3 % and 15 % of their base salary and certain commissions. Based on employee contributions the Company will match either 33.3 % or 50 % one year after initial employee contributions are made pursuant to the F&G ESPP. Our matching expense related to the F&G ESPP was immaterial for the years ended December 31, 2024 and December 31, 2023. 401(k) Plan During the three-year period ended December 31, 2024, we offered our employees the opportunity to participate in our 401(k) plan (the “401(k) Plan”), a qualified voluntary contributory savings plan that is available to substantially all of our employees. Eligible employees may contribute up to 75 % of their pre-tax annual compensation, up to the amount allowed pursuant to the Internal Revenue Code. We make an employer match on the 401(k) Plan of $ 1.00 on each $1.00 contributed up to the first 5 % of eligible earnings contributed to the 401(k) Plan by employees. We may also make discretionary non-elective contributions to the 401(k) Plan for eligible employees, and any such contributions are subject to approval by the Board of Directors for each plan year. The employer match and discretionary non-elective contributions are credited based on the participant's individual investment elections in the 401(k) Plan and recorded in personnel costs in the Consolidated Statements of Operations. The employer match was $ 8 million, $ 7 million, and $ 5 million for the years ended December 31, 2024, 2023, and 2022, respectively. Discretionary non-elective contributions were immaterial for the years ended December 31, 2024, 2023, and 2022, respectively. Stock-Based Compensation We account for stock-based compensation plans in accordance with GAAP on share-based payments, which requires that compensation cost relating to share-based payments be recognized in the consolidated financial statements based on the fair value of each award. Using the fair value method of accounting, compensation cost is measured based on the fair value of the award at the grant date and recognized over the service period. A forfeiture rate, derived from historical experience, is used in the calculation of total stock-based compensation expense. Total 206 stock-based compensation costs recorded in personnel costs in the Consolidated Statements of Operations for the years ended December 31, 2024, 2023 , and 2022 wer e $ 29 million, $ 23 million and $ 12 million, respectively. F&G’s income tax expense for the years ended December 31, 2024, 2023 and 2022 included an immaterial amount of tax benefit related to the vesting and forfeiture of share-based payments. 2022 F&G Omnibus Incentive Plan On December 1, 2022, we established the F&G Annuities & Life, Inc. 2022 Omnibus Incentive Plan (the “2022 F&G Omnibus Plan”), authorizing the issuance of up to 6 million shares of F&G common stock, subject to the terms of the 2022 F&G Omnibus Plan. The 2022 F&G Omnibus Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units and performance shares, performance units, other cash and stock-based awards and dividend equivalents. As of December 31, 2024, there were 1,801,618 shares of restricted stock outstanding under the 2022 F&G Omnibus Plan. Awards granted are approved by the Compensation Committee of the Board of Directors. Awards vest over a 3-year period and have a performance restricti on that must be met for shares awarded to vest. If the performance restriction is not satisfied during the measurement period, all of the shares that do not satisfy the performance criteria will be forfeited to the Company for no consideration. F&G restricted stock transactions under the 2022 F&G Omnibus Plan during the years ended December 31, 2024, 2023, and 2022 are as follows: 2024 2023 2022 Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Outstanding January 1, 1,784,142 $ 30.88 1,409,904 $ 21.80 — $ — Granted 829,899 46.05 876,736 40.28 1,411,369 21.80 Canceled ( 118,063 ) 29.04 ( 48,900 ) 21.80 ( 1,465 ) 21.80 Vested ( 694,360 ) 29.17 ( 453,598 ) 21.80 — — Balance at December 31, 1,801,618 $ 38.65 1,784,142 $ 30.88 1,409,904 $ 21.80 Fair value of restricted stock awards and units is based on the grant date value of the underlying stock derived from quoted market prices. The total fair value of restricted stock awards granted in the years ended December 31, 2024, 2023, and 2022 was $ 38 million, $ 35 million, and $ 31 million, respectively. There were 694,360 , 453,598 , and 0 restricted stock awards which vested in the years ended December 31, 2024, 2023, and 2022, respectively. Net earnings (loss) reflects stock-based compensation expense amounts of $ 28 million, $ 19 million, and $ 1 million for the years ended December 31, 2024, 2023, and 2022, respectively, which are recorded in personnel costs i n the Consolidated Statements of Operations. For the period ended December 31, 2024, the total unrecognized compensation costs related to non-vested restricted stock grants pursuant to the 2022 F&G Omnibus Plan are $ 51 million, which is expected to be recognized in pre-tax income over a weighted average period of 2.54 years. FGL Incentive Plan and 2020 F&G Omnibus Incentive Plan We have outstanding restricted stock grants and stock options under the FGL Holdings 2017 Omnibus Incentive Plan, as amended and restated (the “2020 F&G Omnibus Plan”), which was assumed by FNF. The outstanding awards and options are settled by issuance of FNF common stock. All of the outstanding options are vested and expire at various dates through August 2026. As of December 31, 2024, there were no shares of restricted stock and 100,000 stock options outstanding under the 2020 F&G Omnibus Plan. 207 Stock option transactions under the 2020 F&G Omnibus Plan during the years ended December 31, 2024 , 2023, 2022 are as follows: 2024 2023 2022 Options Weighted Average Exercise Price Options Weighted Average Exercise Price Options Weighted Average Exercise Price Balance at January 1, 643,623 $ 38.80 1,172,607 $ 35.15 1,527,936 $ 35.97 Granted — — — — — — Exercised ( 543,623 ) 38.74 ( 502,414 ) 30.31 ( 352,614 ) 38.79 Canceled — — ( 26,570 ) 38.07 ( 2,715 ) 28.00 Balance at December 31, 100,000 $ 39.10 643,623 $ 38.80 1,172,607 $ 35.15 There were 100,000 , 643,623 , and 1,172,607 exercisable stock options under the 2020 F&G Omnibus Plan at the year ended December 31, 2024, 2023, and 2022, respectively. The following table summarizes information related to stock options outstanding and exercisable as of December 31, 2024: Options Outstanding Options Exercisable Range of Exercise Prices Number of Options Weighted Average Remaining Contractual Life Weighted Average Exercise Price Intrinsic Value Number of Options Weighted Average Remaining Contractual Life Weighted Average Exercise Price Intrinsic Value (In years) (In millions) (In years) (In millions) $ 0.00 - $ 39.10 100,000 0.97 $ 39.10 $ 2 100,000 0.97 $ 39.10 $ 2 100,000 $ 2 100,000 $ 2 Option awards are measured at fair value on the grant date using the Black Scholes Option Pricing Model. The intrinsic value of options exercised was $ 9 million and $ 8 million for the years ended December 31, 2024 and December 31, 2023, respectively, and insignificant for the year ended December 31, 2022. Restricted stock transactions under the 2020 F&G Omnibus Plan during the years ended December 31, 2024 , 2023, and 2022 are as follows: 2024 2023 2022 Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Balance at January 1, 181,479 $ 41.08 501,548 $ 42.31 718.641 $ 40.24 Granted — — — — — — Canceled ( 13,082 ) 48.28 ( 15,965 ) 45.63 ( 78,551 ) 37.79 Vested ( 168,397 ) 40.53 ( 304,104 ) 42.87 ( 138,542 ) 34.11 Balance at December 31, — $ — 181,479 $ 41.08 501,548 $ 42.31 There were no restricted stock awards granted under the 2020 F&G Omnibus Plan in the years ended December 31, 2024, 2023 and 2022. The total fair value of restricted stock awards that vested in the years ended December 31, 2024, 2023, and 2022 was $ 7 million, $ 13 million and $ 5 million, respectively. Net earnings (loss) reflects stock-based compensation expense amounts of $ 1 million, $ 3 million and $ 12 million for the years ended December 31, 2024, 2023 and 2022, respectively, which are included in p ersonnel costs in the Consolidated Statements of Operations. 208 At December 31, 2024, there were no unrecognized compensation cost related to restricted stock grants pursuant to the FGL Incentive Plan and the 2020 F&G Omnibus Plan. Non-Qualified Deferred Compensation Plan We have established the F&G Annuities & Life, Inc. Deferred Compensation Plan (the “Deferred Compensation Plan”), which allows eligible employees and directors to make voluntary contributions to the Deferred Compensation Plan. Employer contributions to the Deferred Compensation Plan are discretionary. For the years ended December 31, 2024, 2023 and 2022, we did not make any discretionary contributions. At December 31, 2024 and 2023, the total liability for the Deferred Compensation Plan was $ 13 million and $ 11 million, respectively. Note S - Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share (dollars and shares in millions except per share data): Year Ended December 31, 2024 2023 2022 Net earnings (loss) $ 642 $ ( 58 ) $ 635 Less: Non-controlling interests 3 — — Net earnings (loss) attributable to F&G 639 ( 58 ) 635 Less: Preferred stock dividend 17 — — Net earnings (loss) attributable to F&G common shareholders $ 622 $ ( 58 ) $ 635 Weighted-average common shares outstanding - basic 125 124 115 Dilutive effect of unvested restricted stock 1 — — Dilutive effect of mandatory convertible preferred stock 5 — — Weighted-average shares outstanding - diluted 131 124 115 Net earnings (loss) per share attributable to F&G common shareholders Basic - net $ 4.98 $ ( 0.47 ) $ 5.52 Diluted - net $ 4.88 $ ( 0.47 ) $ 5.52 Under applicable accounting guidance, companies in a loss position are required to use basic weighted average common shares outstanding in the calculation of diluted loss per share. Therefore, as a result of our net loss for the year ended December 31, 2023, we were required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share, as the inclusion of 593 thousand restricted shares would have been antidilutive to the calculation. If we had not incurred a net loss for the year ended December 31, 2023, dilutive potential common shares would have been 125 million. Restricted stock, options or other instruments, which provide the ability to acquire shares of our common stock that are antidilutive are excluded from the computation of diluted earnings per share. For the years ended December 31, 2024, 2023, and 2022 the diluted earnings per share calculation excluded the weighted average effect of 122 thousand, 111 thousand and 120 thousand restricted stock units, respectively, issued under the 2022 F&G Omnibus Plan due to their antidilutive effect. On June 24, 2022, a stock split in a ratio of 105,000 for 1 previously approved by the F&G board of directors became effective. Earnings per share has been retrospectively adjusted to reflect as if the split occurred as of June 1, 2020, in accordance with GAAP. 209 Note T - Recent Accounting Pronouncements Adopted Pronouncements In March 2023, the FASB issued ASU 2023-02, Accounting for Investments in Tax Credit Structure Using the Proportional Amortization Method (a consensus of the Emerging Issues Task Force). The amendments in this update permit reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. We adopted this standard on January 1, 2024, as required, and there was no material impact to our Consolidated Financial Statements. Refer to Note H - Income Taxes for further information. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense categories that are regularly provided to the CODM and included in each reported measure of a segment’s profit or loss. In addition, the amendments enhance interim disclosure requirements that are currently required annually, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, and contain other disclosure requirements. Additionally, the amendments require that entities with a single reportable segment must now provide all the disclosures previously required under Topic 280. The amendments in this update are incremental to the current requirements of Topic 280 and do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. We adopted this standard using the retrospective approach for all periods presented as required. Refer to Note V - Segment Information for additional information. Pronouncements Not Yet Adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update enhance the transparency of the income tax disclosures by expanding on the disclosures required annually. The amendments require entities to disclose in their rate reconciliation table additional categories of information about federal, state, and foreign income taxes, in addition to providing details about the reconciling items in some categories if above a quantitative threshold. Additionally, the amendments require annual disclosure of income taxes paid (net of refunds received) disaggregated by jurisdiction based on a quantitative threshold. The amendments in this update are effective for public business entities for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments should be applied on a prospective basis, and retrospective application is permitted. We do not currently expect to early adopt this standard and are in the process of assessing its impact on our disclosures upon adoption. In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in this update enhance transparency of certain expense captions by disclosing more granular information of specific expenses within those captions such as personnel costs, depreciation, and amortization. The amendments also require disclosure of qualitative description of amounts remaining in relevant expense captions that are not separately disaggregated. The amendments in this update are effective for all public companies for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments should be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to all prior periods presented in the financial statements. We do not expect to early adopt this standard and are in the process of assessing its impact on our disclosures upon adoption. 210 Note U - Equity Common Stock The total number of common stock shares we are authorized to issue is 500,000,000 , par value $ 0.001 per share. We intend to announce the record date and payment date for each common stock dividend, subject to quarterly review and approval by our Board of Directors and any required regulatory approvals, following completion of the relevant fiscal quarter and with payment in the third month of each subsequent quarter, based on our view of the prevailing and prospective macroeconomic conditions, regulatory landscape and business performance. Changes in common shares outstanding during the years ended December 31, 2024, 2023 , and 2022 were as follows: For the Year Ended December 31, 2024 2023 2022 Shares outstanding at January 1, 126,332,142 126,409,904 105,000,000 Shares issued (a) 717,241 824,998 21,409,904 Shares repurchased (b) ( 256,539 ) ( 902,760 ) — Shares outstanding at December 31, 126,792,844 126,332,142 126,409,904 (a) 2022 includes 20,000,000 shares in an exchange agreement with FNF pursuant to which F&G transferred shares of its common stock to FNF in exchange for the $ 400 million FNF Promissory Note, after which the note was retired. (b) Includes shares of common stock withheld with respect to tax withholding obligations associated with the vesting of share-based compensation awards under our 2020 F&G Omnibus Plan and 2022 F&G Omnibus Plan. Share Repurchases On March 21, 2023, our Board of Directors approved the three-year stock repurchase program, which was amended on November 7, 2023, to authorize the aggregate repurchase of $ 50 million of F&G common stock. The Company believes the share repurchase program is an efficient means of returning cash to shareholders when we consider the shares to be undervalued. No shares were purchased pursuant to the program during the year ended December 31, 2024. During the year ended December 31, 2023, the Company purchased approximately 869,000 shares pursuant to the program, for a total cost of approximately $ 18 million with an average cost per share of $ 21.07 . At December 31, 2024 and 2023, the total remaining authorization of F&G common stock that may be repurchased was approximately $ 32 million. Purchases may be made from time to time by the Company in the open market at prevailing market prices or through privately negotiated transactions or accelerated share repurchase transactions through November 6, 2026. All purchases are held as treasury stock. The extent to which the Company repurchases its shares, and the timing of such purchases, will depend upon a variety of factors, including market conditions, regulatory requirements and other considerations, as determined by the Company. Preferred Stock The total number of preferred stock shares we are authorized to issue is 25,000,000 , par value $ 0.001 per share. Refer to Note A - Business and Summary of Significant Accounting Policie s to the Consolidated Financial Statements for details of the issuance of 5,000,000 shares of FNF Preferred Stock on January 12, 2024. Preferred stock dividends of approximately $ 17 million were declared during the year ended December 31, 2024 . Subject to certain exceptions, so long as any share of FNF Preferred Stock remains outstanding, no dividend or distribution will be declared or paid on shares of the Company’s Common Stock, or any other class or series of stock ranking junior to the FNF Preferred Stock, and no Common Stock or any other class or series of stock ranking junior to or on parity with the FNF Preferred Stock will be purchased, redeemed, or otherwise acquired for consideration 211 by the Company or any of its subsidiaries unless, in each case, all accumulated and unpaid dividends for all preceding dividend periods have been declared and paid in cash, shares of Common Stock or a combination thereof, or a sufficient sum of cash or number of shares of Common Stock has been set aside for the payment of such dividends, on all outstanding shares of FNF Preferred Stock. In addition, when dividends on shares of the FNF Preferred Stock (i) have not been declared and paid in full on any dividend payment date (or, in the case of any parity stock having dividend payment dates different from such dividend payment dates, on a dividend payment date falling within a regular dividend period related to such dividend payment date), or (ii) have been declared but a sum of cash or number of shares of Common Stock sufficient for payment thereof has not been set aside for the benefit of the holders thereof on the applicable regular record date, no dividends may be declared or paid on any parity stock unless dividends are declared on the shares of FNF Preferred Stock such that the respective amounts of such dividends declared on the shares of FNF Preferred Stock and such shares of parity stock shall be allocated pro rata among the holders of the shares of FNF Preferred Stock and the holders of any shares of parity stock then outstanding. Unless converted earlier in accordance with the terms of the Certificate of Designations, each share of the FNF Preferred Stock will automatically convert on the mandatory conversion date, which is expected to be January 15, 2027, into between 0.9456 shares and 1.1111 shares of Common Stock, in each case, subject to customary anti-dilution adjustments described in the Certificate of Designations. The number of shares of Common Stock issuable upon conversion will be determined based on the average volume weighted average price per share of Common Stock over the 20 consecutive trading day period beginning on, and including, the 21st scheduled trading day immediately prior to January 15, 2027. Dividends on the FNF Preferred Stock will be payable on a cumulative basis when, as and if declared by the Company’s board of directors, or an authorized committee thereof, at an annual rate of 6.875 % on the liquidation preference of $ 50.00 per share of FNF Preferred Stock, and may be paid in cash or, subject to certain limitations, in shares of Common Stock or, subject to certain limitations, any combination of cash and shares of Common Stock. If declared, dividends on the FNF Preferred Stock will be payable quarterly on January 15, April 15, July 15 and October 15 of each year to, and including, January 15, 2027, commencing on April 15, 2024. With respect to any decision to declare or pay dividends, the board of directors or an authorized committee thereof, as the case may be, shall be required to act in accordance with the recommendation of a committee (whether or not formally constituted) consisting of all of the independent and disinterested directors at any time sitting on the board of directors. Holders of the FNF Preferred Stock will have the option to convert all or any portion of their shares of FNF Preferred Stock at any time prior to the mandatory conversion date. Early conversions that are not made in connection with a Fundamental Change (as defined in Certificate of Designations) will be settled at the minimum conversion rate of 0.9456 shares of Common Stock per share of the FNF Preferred Stock (subject to anti-dilution adjustments). In addition, the conversion rate applicable to any such early conversion may in certain circumstances be increased to compensate holders of the FNF Preferred Stock for certain unpaid accumulated dividends. If a Fundamental Change occurs on or prior to January 15, 2027, then holders of the FNF Preferred Stock will be entitled to convert all or any portion of their FNF Preferred Stock at the Fundamental Change Conversion Rate (as defined in the Certificate of Designations) for a specified period of time and to also receive an amount to compensate them for certain unpaid accumulated dividends and any remaining future scheduled dividend payments. The FNF Preferred Stock will not be subject to redemption at the Company’s option. Upon the Company’s voluntary or involuntary liquidation, winding-up or dissolution, each holder of the FNF Preferred Stock will be entitled to receive a liquidation preference in the amount of $ 50.00 per share of FNF Preferred Stock, plus an amount equal to accumulated and unpaid dividends on such shares, whether or not declared, to, but excluding, the date fixed for liquidation, winding-up or dissolution, to be paid out of the Company’s assets legally available for distribution to its stockholders after satisfaction of debt and other liabilities owed to the Company’s creditors and holders of shares of its stock ranking senior to the FNF Preferred Stock and before any payment or distribution is made to holders of any stock ranking junior to the FNF Preferred Stock, including, without limitation, Common Stock. 212 Dividends The following table shows the quarterly common stock dividends declared during the years ended December 31, 2024, 2023 , and 2022: Year ended December 31, 2024 2023 2022 First quarter $ 0.21 $ 0.20 $ — Second quarter 0.21 0.20 — Third quarter 0.21 0.20 — Fourth quarter 0.22 0.21 0.20 Total $ 0.85 $ 0.81 $ 0.20 On February 20, 2025, our Board of Directors declared a quarterly cash dividend of $ 0.22 per share, payable on March 31, 2025, to F&G common shareholders of record as of March 17, 2025. On February 20, 2025, our Board of Directors also declared a quarterly cash dividend of $ 0.8594 per share on the FNF Preferred Stock for the period from January 15, 2025 to and excluding April 15, 2025, to be paid on April 15, 2025, to FNF Preferred Stock shareholders of record as of April 1, 2025. Accumulated other comprehensive income (loss) Changes in the balance of Accumulated other comprehensive income (loss) for the years ended December 31, 2024, 2023 and 2022, by component are as follows (in millions). Year Ended December 31, 2024 Unrealized gain (loss) on investments and other financial instruments, net (excluding investments in unconsolidated affiliates) Change in current discount rate - future policy benefits Change in instrument- specific credit risk - market risk benefits Foreign Currency Translation Total Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2023 $ ( 2,479 ) $ 574 $ ( 83 ) $ ( 2 ) $ ( 1,990 ) Reclassification adjustments included in net earnings (a) 6 — 1 7 Other comprehensive income (loss) before tax, net of reclassifications ( 207 ) 283 6 ( 6 ) 76 Deferred income tax (expense) benefit 43 ( 59 ) ( 1 ) 1 ( 16 ) Balance at December 31, 2024 $ ( 2,637 ) $ 798 $ ( 78 ) $ ( 6 ) $ ( 1,923 ) Year Ended December 31, 2023 Unrealized gain (loss) on investments and other financial instruments, net (excluding investments in unconsolidated affiliates) Change in current discount rate - future policy benefits Change in instrument- specific credit risk - market risk benefits Foreign Currency Translation Total Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2022 $ ( 3,528 ) $ 763 $ ( 49 ) $ ( 4 ) $ ( 2,818 ) Reclassification adjustments included in net earnings (a) 130 — — — 130 Other comprehensive income (loss) before tax, net of reclassifications 1,159 ( 239 ) ( 43 ) 3 880 Deferred income tax (expense) benefit ( 240 ) 50 9 ( 1 ) ( 182 ) Balance at December 31, 2023 $ ( 2,479 ) $ 574 $ ( 83 ) $ ( 2 ) $ ( 1,990 ) 213 Year Ended December 31, 2022 Unrealized gain (loss) on investments and other financial instruments, net (excluding investments in unconsolidated affiliates) Change in current discount rate - future policy benefits Change in instrument- specific credit risk - market risk benefits Foreign Currency Translation Total Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2021 $ 949 $ ( 1 ) $ ( 116 ) $ 1 $ 833 Reclassification adjustments included in net earnings (a) 212 — — — 212 Other comprehensive income (loss) before tax, net of reclassifications ( 5,931 ) 967 85 ( 6 ) ( 4,885 ) Deferred income tax (expense) benefit 1,242 ( 203 ) ( 18 ) 1 1,022 Balance at December 31, 2022 $ ( 3,528 ) $ 763 $ ( 49 ) $ ( 4 ) $ ( 2,818 ) (a) Net of income tax expense of $ 2 million, $ 35 million and $ 56 million for the year ended December 31, 2024, 2023, and 2022, respectively. 214 Note V - Segment Information F&G has one reportable segment, which reflects the manner by which our CODM, the Chief Executive Officer of F&G, views and manages the business. F&G’s CODM uses the consolidated net earnings (loss) as reported on the Consolidated Statements of Operations to evaluate F&G’s results and measure profitability and performance. The measure of segment assets is reported on the Consolidated Balance Sheets as total consolidated assets. Summarized financial information concerning our single reportable segment is shown in the following table (in millions). Year Ended December 31, 2024 2023 2022 Revenues: Life-contingent pension risk transfer premiums $ 2,217 $ 1,964 $ 1,362 Traditional life insurance and life-contingent immediate annuity premiums 35 43 33 Surrender charges 268 103 58 Policyholder fees and other income 340 303 251 Life insurance premiums and other fees 2,860 2,413 1,704 Owned distribution revenues 81 — — Revenues from external customers 2,941 2,413 1,704 Interest and investment income 2,719 2,211 1,655 Recognized gains and losses, net 84 ( 124 ) ( 1,010 ) Total revenues 5,744 4,500 2,349 Significant expenses (a): Benefits and other changes in policy reserves 3,791 3,553 1,126 Personnel costs 296 232 157 Other operating expenses 203 146 102 Total significant expenses: 4,290 3,931 1,385 Other segment items Market risk benefit (gains) losses ( 25 ) 95 ( 182 ) Depreciation and amortization 569 412 324 Interest expense 132 97 29 Total other segment items: 676 604 171 Total expenses 4,966 4,535 1,556 Earnings (loss) before income taxes 778 ( 35 ) 793 Income tax (benefit) expense 136 23 158 Net earnings (loss) $ 642 $ ( 58 ) $ 635 (a) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures None.