Fidelity National Financial, Inc. 10-K

Item 8. Financial Statements and Supplementary Data FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES INDEX TO FINANCIAL INFORMATION Page Number Report of Independent Registered Public Accounting Firm on Effectiveness of Internal Control over Financial Reporting (Ernst & Young, LLP, Jacksonville, FL, Auditor Firm ID : 42 ) 87 Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements (Ernst & Young, LLP, Jacksonville, FL, Auditor Firm ID : 42 ) 88 Consolidated Balance Sheets as of December 31, 202 2 and 20 21 92 Consolidated Statements of Earnings for the years ended December 31, 202 2 , 202 1 , and 20 20 93 Consolidated Statements of Comprehensive Earnings for the years ended December 31, 202 2 , 202 1 , and 20 20 94 Consolidated Statements of Equity for the years ended December 31, 202 2 , 202 1 , and 20 20 95 Consolidated Statements of Cash Flows for the years ended December 31, 202 2 , 202 1 , and 20 20 96 Notes to Consolidated Financial Statements 99 86 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of Fidelity National Financial, Inc. Opinion on Internal Control over Financial Reporting We have audited Fidelity National Financial, Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2022, 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, Fidelity National Financial, Inc. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria. 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, 2022 and 2021, the related consolidated statements of earnings, comprehensive earnings, equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedules listed in the Index at Item 15(a)(2) and our report dated February 27, 2023 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 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 Jacksonville, Florida February 27, 2023 87 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of Fidelity National Financial, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Fidelity National Financial, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of earnings, comprehensive earnings, equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedules listed in the Index at Item 15(a)(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, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, 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, 2022, 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 27, 2023 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 Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters 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 matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Loss Provision Rate Assumption related to the Reserve for Title Claim Losses Description of the Matter The Company’s reserve for title claim losses totaled $1.8 billion as of December 31, 2022. As discussed in Note A to the consolidated financial statements, the reserve for title claim losses includes known claims as well as losses that have been incurred but not yet reported, net of recoupments. The Company establishes reserves for claims which are incurred but not reported at the time premium revenue is recognized based on estimated loss provision rates. There is significant uncertainty inherent in determining the loss provision rates. Auditing the Company’s reserve for title claim losses was complex because of the highly judgmental nature of the determination of the loss provision rates used in the valuation of the reserve for title claim losses. The significant judgment was primarily due to the sensitivity of management’s estimate to claim loss history, industry trends, current legal environment, and geographic considerations. 88 Table of Contents 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 loss provision rates and the recorded reserve for title claim losses. These controls included, among others, the review and approval process management has in place for the development of the loss provision rates and the estimation of the reserve for title claim losses. To evaluate the judgment used by management in determining the loss provision rates, among other procedures, we considered claim loss history, industry trends, current legal environment and geographic considerations, and how management assessed these factors in the current period as compared to prior periods. We involved actuarial professionals with specialized skills and industry knowledge, who assisted in performing an evaluation of the Company’s current year loss provision rates compared with those used in prior periods, as well as a review of loss development experience for prior years. We also independently calculated a range of reasonable reserve estimates which we compared to management’s recorded reserve for title claim losses. Value of Business Acquired (VOBA), Deferred Acquisition Costs (DAC), Deferred Sales Inducements (DSI) and secondary guarantee liabilities Description of the Matter At December 31, 2022 VOBA, DAC, and DSI reported within other intangible assets, net totaled $3.7 billion and contractholder funds totaled $41.2 billion, a portion of which related to indexed universal life (IUL)-type and Investment-type contracts with secondary guarantees. As discussed in Note A to the consolidated financial statements, VOBA, DAC, and DSI are generally amortized over the lives of the policies in relation to the emergence of actual gross profits (AGPs) and estimated gross profits (EGPs). Secondary guarantee liabilities on IUL-type products or Investment-type contracts are calculated by multiplying the benefit ratio by the cumulative assessments recorded from contract inception through the balance sheet date less the cumulative secondary guarantee benefit payments plus interest. The benefit ratio is the ratio of the present value of secondary guarantees to the present value of the assessments used to provide the secondary guarantees. The assessments are calculated using the same assumptions used in VOBA, DAC, and DSI EGPs. There is significant uncertainty inherent in calculating EGPs and assessments as the calculation is sensitive to management’s best estimate of assumptions such as earned rate, budgeted option costs, surrender rates, mortality, and guaranteed minimum withdrawal benefit (GMWB) utilization. Changes in assumptions, including the Company’s earned rate, budgeted option costs, surrender rates, mortality, and GMWB utilization can have a significant impact on the pattern of EGPs of the underlying business and as a result the amortization of VOBA, DAC and DSI balances. Management’s assumptions are adjusted, also known as unlocking, based on actual policyholder behavior and market experience and projecting for expected trends. The unlocking results in amortization being recalculated using the new assumptions for estimated gross profits, resulting either in additional or less cumulative amortization expense. Additionally, if experience or assumption changes result in a new benefit ratio, the secondary guarantee liabilities are adjusted to reflect the changes in a manner similar to the unlocking of VOBA, DAC, and DSI. Auditing the valuation of the Company’s VOBA, DAC, and DSI that are amortized in relation to the emergence of AGPs/EGPs and valuation of secondary guarantee liabilities on IUL-type products or Investment-type contracts was complex because of the highly judgmental nature of the methods used and determination of the assumptions applied to determine the EGPs and assessments. The high degree of judgment was primarily due to the sensitivity of the EGPs and assessments to the methods used and assumptions applied which have a significant effect on the valuation of VOBA, DAC, DSI and secondary guarantee liabilities on IUL-type products or Investment-type contracts. 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 the VOBA, DAC, DSI, and contractholder funds estimation processes. These controls included, among others, the review and approval process management has in place for the development of the significant assumptions described above. To evaluate the judgment used by management in determining the EGPs and assessments, among other procedures, we involved actuarial specialists and evaluated the methodology applied by management in determining the EGPs and assessments with those used in prior periods. To evaluate the significant assumptions used by management, we compared policyholder behavior assumptions that we identified as being higher risk to prior actual experience, observable market data or management’s estimates of prospective changes in these assumptions. We performed an independent recalculation of EGPs and secondary guarantee liabilities for a sample of product cohorts, which we compared to the actuarial model used by management. 89 Table of Contents Valuation of Investments in Securities Description of the Matter The Company’s fair value of fixed maturity securities totaled $33.1 billion as of December 31, 2022. The fair value of a subset of these securities, including asset backed securities and bonds, is based on non-binding broker quotes as described in Note D to the consolidated financial statements. The lack of visibility into assumptions used in non-binding broker quotes is a significant unobservable input, which creates greater subjectivity when determining the fair values. Auditing the fair value of the securities valued by brokers was especially challenging because determining the fair value is complex and highly judgmental and involves using inputs and assumptions that are not directly observable in the market. How we Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of management’s valuation process for broker-quoted securities. These controls included management’s evaluation of the broker-quoted values compared to an independently calculated range of values. To test the fair value of the securities, we utilized the support of our valuation specialists which included, among other procedures, independently calculating a reasonable range of fair values for a sample of securities based on independently obtained information or available transaction data for similar securities. We compared these ranges to management’s estimates of fair value for the selected securities. Assumptions related to Fixed Indexed Annuity Embedded Derivative Liability Description of the Matter As of December 31, 2022, the fair value of the Company’s fixed indexed annuity embedded derivative liability totaled $3.1 billion. Certain of the Company’s fixed indexed annuity 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 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 Note D to the consolidated financial statements. Auditing the valuation of the Company’s fixed indexed annuity embedded derivative was complex because of the highly judgmental nature of the determination of the assumptions required to determine the fair value of the embedded derivative. In particular, the fair value was sensitive to the significant assumptions used to determine future policy growth including the mortality, surrender rates, partial withdrawals, GMWB utilization, non-performance spread, and option cost. There is significant uncertainty inherent in determining the mortality, surrender rates, partial withdrawals, GMWB utilization, non-performance spread and option cost assumptions. 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. 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, among other procedures, we involved actuarial specialists and evaluated the methodology applied by management in determining the fair value 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 policyholder behavior assumptions to prior actual experience and management’s estimate of prospective changes in the assumptions. In addition, we compared the nonperformance spread and option costs assumptions to observable market data. We performed an independent recalculation of the embedded derivative for a sample of products for comparison with the actuarial model used by management. 90 Table of Contents /s/ Ernst & Young LLP We have served as the Company's auditor since 2017. Jacksonville, Florida February 27, 2023 91 Table of Contents FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in millions, except share data) December 31, 2022 December 31, 2021 ASSETS Investments: Fixed maturity securities available for sale, at fair value, at December 31, 2022 and December 31, 2021, at an amortized cost of $ 37,708 and $ 30,705 , respectively, net of allowance for credit losses of $ 39 and $ 8 , respectively, and includes pledged fixed maturity securities of $ 448 and $ 460 , respectively, related to secured trust deposits $ 33,095 $ 31,990 Preferred securities, at fair value 903 1,401 Equity securities, at fair value 678 1,263 Derivative investments 244 816 Mortgage loans, net of allowance for credit losses of $ 42 and $ 31 at December 31, 2022 and 2021, respectively. 4,554 3,749 Investments in unconsolidated affiliates 2,614 2,486 Other long-term investments 692 579 Short-term investments, at December 31, 2022 and December 31, 2021 includes pledged short-term investments of $ 6 and $ 1 , respectively, related to secured trust deposits 2,590 491 Total investments 45,370 42,775 Cash and cash equivalents, at December 31, 2022 and 2021 includes $ 242 and $ 480 , respectively, of pledged cash related to secured trust deposits 2,286 4,360 Trade and notes receivables, net of allowance of $ 33 and $ 32 at December 31, 2022 and 2021, respectively 467 557 Reinsurance recoverable, net of allowance for credit losses of $ 10 and $ 20 at December 31, 2022 and 2021, respectively 5,588 3,738 Goodwill 4,642 4,539 Prepaid expenses and other assets 2,231 1,203 Lease assets 376 376 Other intangible assets, net 4,034 2,557 Title plants 416 400 Property and equipment, net 179 185 Total assets $ 65,589 $ 60,690 LIABILITIES AND EQUITY Liabilities: Contractholder funds $ 41,233 $ 35,525 Future policy benefits 5,923 4,732 Accounts payable and accrued liabilities 2,352 2,696 Notes payable 3,238 3,096 Reserve for title claim losses 1,810 1,883 Funds withheld for reinsurance liabilities 3,703 1,676 Secured trust deposits 862 934 Lease liabilities 418 414 Income taxes payable — 72 Deferred tax liability 71 205 Total liabilities 59,610 51,233 Equity: FNF common stock, $ 0.0001 par value; authorized 600,000,000 shares as of December 31, 2022 and 2021, respectively; outstanding of 272,309,890 and 283,778,574 as of December 31, 2022 and 2021, respectively, and issued of 327,757,349 and 325,486,429 as of December 31, 2022 and 2021, respectively — — Preferred stock, $ 0.0001 par value; authorized 50,000,000 shares; issued and outstanding, none — — Additional paid-in capital 5,876 5,811 Retained earnings 4,714 4,369 Accumulated other comprehensive earnings ( 2,862 ) 779 Less: Treasury stock, 55,447,459 shares and 41,707,855 shares as of December 31, 2022 and 2021, respectively, at cost ( 2,109 ) ( 1,545 ) Total Fidelity National Financial, Inc. shareholders’ equity 5,619 9,414 Non-controlling interests 360 43 Total equity 5,979 9,457 Total liabilities and equity $ 65,589 $ 60,690 See accompanying Notes to Consolidated Financial Statements 92 Table of Contents FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars in millions, except per share data) Year Ended December 31, 2022 2021 2020 Revenues: Direct title insurance premiums $ 2,858 $ 3,571 $ 2,699 Agency title insurance premiums 3,976 4,982 3,599 Escrow, title-related and other fees 4,324 4,795 3,092 Interest and investment income 1,891 1,961 900 Recognized gains and losses, net ( 1,493 ) 334 488 Total revenues 11,556 15,643 10,778 Expenses: Personnel costs 3,192 3,528 2,951 Agent commissions 3,064 3,821 2,749 Other operating expenses 1,721 1,929 1,759 Benefits and other changes in policy reserves 1,125 2,138 866 Depreciation and amortization 496 645 296 Provision for title claim losses 308 385 283 Interest expense 115 114 90 Total expenses 10,021 12,560 8,994 Earnings from continuing operations before income taxes and equity in earnings of unconsolidated affiliates 1,535 3,083 1,784 Income tax expense 398 713 322 Earnings before equity in earnings of unconsolidated affiliates 1,137 2,370 1,462 Equity in earnings of unconsolidated affiliates 15 64 15 Net earnings from continuing operations 1,152 2,434 1,477 Net earnings (loss) from discontinued operations, net of tax — 8 ( 25 ) Net earnings 1,152 2,442 1,452 Less: Net earnings attributable to non-controlling interests 16 20 25 Net earnings attributable to Fidelity National Financial, Inc. common shareholders $ 1,136 $ 2,422 $ 1,427 Earnings per share Basic Net earnings from continuing operations attributable to FNF common shareholders $ 4.13 $ 8.47 $ 5.11 Net earnings (loss) from discontinued operations attributable to FNF common shareholders — 0.03 ( 0.09 ) Net earnings per share attributable to FNF common shareholders, basic $ 4.13 $ 8.50 $ 5.02 Diluted Net earnings from continuing operations attributable to FNF common shareholders $ 4.10 $ 8.41 $ 5.08 Net earnings (loss) from discontinued operations attributable to FNF common shareholders — 0.03 ( 0.09 ) Net earnings per share attributable to FNF common shareholders, diluted $ 4.10 $ 8.44 $ 4.99 Weighted average shares outstanding FNF common stock, basic basis 275 285 284 Weighted average shares outstanding FNF common stock, diluted basis 277 287 286 See accompanying Notes to Consolidated Financial Statements 93 Table of Contents FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (In millions) Year Ended December 31, 2022 2021 2020 Net earnings $ 1,152 $ 2,442 $ 1,452 Other comprehensive earnings: Unrealized (loss) gain on investments and other financial instruments, net of adjustments to intangible assets and unearned revenue (excluding investments in unconsolidated affiliates) (1) ( 3,839 ) ( 413 ) 1,310 Unrealized gain on investments in unconsolidated affiliates (2) 9 22 3 Unrealized (loss) gain on foreign currency translation (3) ( 18 ) ( 7 ) 10 Reclassification adjustments for change in unrealized gains and losses included in net earnings (4) 173 ( 123 ) ( 73 ) Change in reinsurance liabilities held at fair value resulting from a change in the instrument-specific credit risk (5) — 3 ( 3 ) Other comprehensive earnings attributable to non-controlling interest (6) 29 — — Minimum pension liability adjustment (7) 5 ( 7 ) 14 Other comprehensive (loss) earnings ( 3,641 ) ( 525 ) 1,261 Comprehensive (loss) earnings ( 2,489 ) 1,917 2,713 Less: Comprehensive earnings attributable to non-controlling interests 16 20 25 Comprehensive (loss) earnings attributable to Fidelity National Financial, Inc. common shareholders $ ( 2,505 ) $ 1,897 $ 2,688 (1) Net of income tax (benefit) expense of $( 1,010 ) million, $( 113 ) million, and $ 350 million for the years ended December 31, 2022, 2021, and 2020, respectively. (2) Net of income tax expense of $ 3 million, $ 7 million, and $ 1 million for the years ended December 31, 2022, 2021, and 2020, respectively. (3) Net of income tax (benefit) expense of $( 4 ) million, $ 0 million, and $ 1 million for the years ended December 31, 2022, 2021, and 2020, respectively. (4) Net of income tax expense (benefit) of $ 60 million, $( 33 ) million and $( 18 ) million for the years ended December 31, 2022, 2021 and 2020, respectively. (5) Net of income tax expense (benefit) of $ 1 million and $( 1 ) million for the years ended December 31, 2021, and 2020, respectively. (6) Net of income tax expense of $ 8 million for the year ended December 31, 2022. (7) Net of income tax expense (benefit) of $ 2 million, $( 2 ) million and $ 4 million for the years ended December 31, 2022, 2021, and 2020, respectively. See accompanying Notes to Consolidated Financial Statements 94 Table of Contents FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (In millions, except per share data) Fidelity National Financial, Inc. Common Shareholders Accumulated FNF Other Redeemable Common Additional Comprehensive Treasury Non- Non- Stock Paid-in Retained Earnings Stock controlling Total controlling Shares $ Capital Earnings (Loss) Shares $ Interests Equity Interests Balance, January 1, 2020 292 $ — $ 4,581 $ 1,356 $ 43 17 $ ( 598 ) $ ( 17 ) 5,365 $ 344 Exercise of stock options 3 — 62 — — — — — 62 F&G Acquisition 25 — 827 — — 7 ( 217 ) — 610 Purchase of ServiceLink noncontrolling interest — — 211 — — — — 47 258 ( 344 ) Issuance of restricted stock 2 — — — — — — — — — Treasury stock repurchased — — — — — 7 ( 244 ) — ( 244 ) — Other comprehensive earnings - unrealized gain on investments and other financial instruments — — — — 1,310 — — — 1,310 — Other comprehensive earnings - unrealized gain on investments in unconsolidated affiliates — — — — 3 — — — 3 — Other comprehensive earnings - unrealized gain on foreign currency translation — — — — 10 — — — 10 — Other comprehensive earnings - minimum pension liability adjustment — — — — 14 — — — 14 Reclassification adjustments for change in unrealized gains and losses included in net earnings — — — — ( 73 ) — — — ( 73 ) — Stock-based compensation — — 39 — — — — — 39 — Dividends declared — — — ( 389 ) — — — — ( 389 ) — Shares withheld for taxes and in treasury — — — — — — ( 8 ) — ( 8 ) — Change in reinsurance liabilities held at fair value resulting from change in instrument-specific credit risk ( 3 ) ( 3 ) Subsidiary dividends declared to non-controlling interests — — — — — — — ( 14 ) ( 14 ) — Net earnings — — — 1,427 — — — 25 1,452 — Balance, December 31, 2020 322 $ — $ 5,720 $ 2,394 $ 1,304 31 $ ( 1,067 ) $ 41 $ 8,392 $ — Exercise of stock options 2 — 50 — — — — — 50 — Treasury stock repurchased — — — — — 10 ( 461 ) — ( 461 ) — Issuance of restricted stock 1 — — — — — — — — — Purchase of incremental share in consolidated subsidiaries — — — — — — — 1 1 Other comprehensive earnings — unrealized gain on investments and other financial instruments — — — — ( 413 ) — — — ( 413 ) — Other comprehensive earnings — unrealized gain on investments in unconsolidated affiliates — — — — 22 — — — 22 — Other comprehensive earnings — unrealized gain on foreign currency translation — — — — ( 7 ) — — — ( 7 ) — Other comprehensive earnings - minimum pension liability adjustment — — — — ( 7 ) — — — ( 7 ) — Reclassification adjustments for change in unrealized gains and losses included in net earnings — — — — ( 123 ) — — — ( 123 ) — Stock-based compensation — — 41 — — — — — 41 — Dividends declared — — — ( 447 ) — — — — ( 447 ) — Shares withheld for taxes and in treasury — — — — — 1 ( 17 ) — ( 17 ) — Change in reinsurance liabilities held at fair value resulting from change in instrument-specific credit risk — — — — 3 — — — 3 — Subsidiary dividends declared to non-controlling interests — — — — — — — ( 19 ) ( 19 ) — Net earnings — — — 2,422 — — — 20 2,442 — Balance, December 31, 2021 $ 325 $ — $ 5,811 $ 4,369 $ 779 42 $ ( 1,545 ) $ 43 $ 9,457 $ — See accompanying Notes to Consolidated Financial Statements 95 Table of Contents FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (CONTINUED) (In millions, except per share data) Fidelity National Financial, Inc. Common Shareholders Accumulated FNF Other Common Additional Comprehensive Treasury Non- Stock Paid-in Retained Earnings Stock controlling Total Shares $ Capital Earnings (Loss) Shares $ Interests Equity Balance, January 1, 2022 325 $ — $ 5,811 $ 4,369 $ 779 42 $ ( 1,545 ) $ 43 $ 9,457 Exercise of stock options 2 — 39 — — — — — 39 Non-controlling interest associated with current period acquisitions 45 45 Treasury stock repurchased — — — — — 13 ( 549 ) — ( 549 ) Issuance of restricted stock 1 — — — — — — — — Purchase of incremental share in consolidated subsidiaries — — ( 3 ) — — — — ( 12 ) ( 15 ) Other comprehensive earnings - unrealized loss on investments and other financial instruments — — — — ( 3,839 ) — — — ( 3,839 ) Other comprehensive earnings - unrealized gain on investments in unconsolidated affiliates — — — — 9 — — — 9 Other comprehensive earnings - unrealized loss on foreign currency translation — — — — ( 18 ) — — — ( 18 ) Other comprehensive earnings - minimum pension liability adjustment — — — — 5 — — — 5 Reclassification adjustments for change in unrealized gains and losses included in net earnings — — — — 173 — — — 173 Stock-based compensation — — 48 — — — — 1 49 Dividends declared — — — ( 490 ) — — — — ( 490 ) Shares withheld for taxes and in treasury — — — — — — ( 15 ) — ( 15 ) Distribution of 15 % of the common stock of F&G — — ( 19 ) ( 301 ) — — — 320 — Other comprehensive earnings attributable to non-controlling interest — — — — 29 — — ( 29 ) Subsidiary dividends declared to non-controlling interests — — — — — — — ( 24 ) ( 24 ) Net earnings — — — 1,136 — — — 16 1,152 Balance, December 31, 2022 328 $ — $ 5,876 $ 4,714 $ ( 2,862 ) 55 $ ( 2,109 ) $ 360 $ 5,979 See accompanying Notes to Consolidated Financial Statements 96 Table of Contents FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) For the Year Ended December 31, 2022 2021 2020 Cash Flows From Operating Activities: Net earnings $ 1,152 $ 2,442 $ 1,452 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 496 645 296 Equity in earnings of unconsolidated affiliates ( 15 ) ( 64 ) ( 15 ) Loss (gain) on sales of investments and other assets and asset impairments, net 533 ( 588 ) 80 Loss on sale of businesses — 14 9 Interest credited/index credits to contractholder account balances ( 542 ) 805 750 Deferred policy acquisition costs and deferred sales inducements ( 814 ) ( 675 ) ( 266 ) Charges assessed to contractholders for mortality and administration ( 212 ) ( 180 ) ( 100 ) Non-cash lease costs 142 139 150 Operating lease payments ( 154 ) ( 150 ) ( 152 ) Distributions from unconsolidated affiliates, return on investment 151 106 — Stock-based compensation cost 49 43 39 Change in NAV of limited partnerships, net ( 109 ) ( 589 ) — Change in valuation of derivatives, equity and preferred securities, net 947 253 ( 568 ) Changes in assets and liabilities, net of effects from acquisitions: Change in reinsurance recoverable 149 4 40 Change in future policy benefits 1,191 634 ( 92 ) Change in funds withheld from reinsurers 2,056 850 ( 15 ) Net decrease (increase) in trade receivables 178 ( 120 ) ( 83 ) Net (decrease) increase in reserve for title claim losses ( 73 ) 260 114 Net change in income taxes 25 ( 18 ) 24 Net change in other assets and other liabilities ( 795 ) 279 ( 85 ) Net cash provided by operating activities 4,355 4,090 1,578 Cash Flows From Investing Activities: Proceeds from sales, calls and maturities of investment securities 6,340 9,796 3,592 Fundings of notes receivable ( 99 ) — — Additions to property and equipment and capitalized software ( 138 ) ( 131 ) ( 110 ) Purchases of investment securities ( 13,148 ) ( 16,014 ) ( 4,959 ) Net (purchases of) proceeds from sales and maturities of short-term investment securities ( 2,571 ) 266 145 F&G acquisition — — ( 1,076 ) Other acquisitions/disposals, net of cash acquired ( 180 ) ( 100 ) 158 Additional investments in unconsolidated affiliates ( 1,077 ) ( 1,746 ) ( 327 ) Distributions from unconsolidated affiliates, return of investment 335 491 241 Net other investing activities 14 ( 11 ) 5 Net cash used in investing activities ( 10,524 ) ( 7,449 ) ( 2,331 ) 97 Table of Contents FIDELITY NATIONAL FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (In millions) For the Year Ended December 31, Cash Flows From Financing Activities: 2022 2021 2020 Borrowings 550 — 1,000 Debt offering — 449 1,246 Debt costs/equity issuance additions — ( 6 ) ( 22 ) Debt service payments ( 404 ) — ( 1,000 ) Dividends paid ( 489 ) ( 446 ) ( 389 ) Subsidiary dividends paid to non-controlling interest shareholders ( 20 ) ( 19 ) ( 14 ) Exercise of stock options 39 48 62 Net change in secured trust deposits ( 72 ) 224 ( 80 ) Purchase of additional share in consolidated subsidiaries ( 15 ) — ( 90 ) Payment of contingent consideration for prior period acquisitions ( 7 ) ( 5 ) ( 13 ) Payment for shares withheld for taxes and in treasury ( 15 ) ( 17 ) ( 8 ) Contractholder account deposits 8,531 8,166 2,967 Contractholder account withdrawals ( 3,450 ) ( 2,931 ) ( 1,327 ) Purchases of treasury stock ( 553 ) ( 463 ) ( 236 ) Net cash provided by financing activities 4,095 5,000 2,096 Net (decrease) increase in cash and cash equivalents ( 2,074 ) 1,641 1,343 Cash and cash equivalents at beginning of period 4,360 2,719 1,376 Cash and cash equivalents at end of period $ 2,286 $ 4,360 $ 2,719 See accompanying Notes to Consolidated Financial Statements 98 Table of Contents FIDELITY NATIONAL FINANCIAL, 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 Fidelity National Financial, Inc. and its subsidiaries (collectively, “we,” “us,” “our,” the "Company" or “FNF”), which have been followed in preparing the accompanying Consolidated Financial Statement s. Description of the Business We are a leading provider of (i) title insurance, escrow and other title-related services, including trust activities, trustee sales guarantees, recordings and reconveyances and home warranty products, (ii) technology and transaction services to the real estate and mortgage industries and (iii) annuity and life insurance products. FNF is one of the nation’s largest title insurance companies operating through its title insurance underwriters - Fidelity National Title Insurance Company ("FNTIC"), Chicago Title Insurance Company ("Chicago Title"), Commonwealth Land Title Insurance Company ("Commonwealth Title"), Alamo Title Insurance and National Title Insurance of New York Inc. - which collectively issue more title insurance policies than any other title company in the United States. Through our subsidiary, ServiceLink Holdings, LLC ("ServiceLink"), we provide mortgage transaction services, including title-related services and facilitation of production and management of mortgage loans. We are also a leading provider of insurance solutions serving retail annuity and life customers and institutional clients through our majority owned subsidiary, F&G Annuities & Life ("F&G"). For information about our reportable segments refe r to Note J Seg ment Information . Recent Developments 7.40 % F&G Senior Notes On January 13, 2023, F&G completed its issuance and sale of $ 500 million aggregate amount of its 7.40 % Senior Notes due 2028 (the " 7.40 % F&G Notes"), pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. The 7.40 % F&G Notes are the senior unsecured, unsubordinated obligations of F&G and are guaranteed on an unsecured, unsubordinated basis by each of F&G's subsidiaries that are guarantors of its obligations under the F&G Credit Agreement (the “Guarantors”). F&G intends to use the net proceeds from the offering of the 7.40 % F&G Notes for general corporate purposes, including to support the growth of assets under management and for F&G's future liquidity requirements. The interest rate payable on the 7.40 % F&G Notes will be subject to adjustment from time to time if either S&P or Fitch (or a substitute rating agency therefor) downgrades (or downgrades and subsequently upgrades) the credit ratings assigned to the 7.40 % F&G Notes. Acquisition of TitlePoint On January 1, 2023, we completed our previously announced acquisition of TitlePoint for $ 225 million in cash, subject to a customary working capital adjustment. TitlePoint enables searches for detailed property information, images of documents and maps from hundreds of counties across the U.S and is a leader in the science of real estate property research technology. F&G Distribution On December 1, 2022, we completed our previously announced separation and distribution of approximately 15 % of the common stock of F&G (the "F&G Distribution"). Following the F&G Distribution, we retained control of F&G through our approximate 85 % ownership stake. The F&G Distribution was accomplished by the distribution of 68 shares of common stock, par value $ 0.001 per share, of F&G for every 1,000 shares of common stock, par value $ 0.0001 per share, of FNF (“FNF Common Stock”) as a dividend to each holder of shares of FNF Common Stock as of the close of business on November 22, 2022, the record date for the Distribution. As a result of the F&G Distribution, F&G is a separate, publicly traded company and its businesses, assets and liabilities are expected to primarily consist of those related to F&G’s business as a provider of insurance solutions serving retail annuity and life customers and institutional clients. Through F&G’s insurance subsidiaries, including Fidelity & Guaranty Life Insurance Company and Fidelity & Guaranty Life Insurance Company of New York, F&G intends continue to market a broad portfolio of deferred annuities (fixed indexed annuities and multi-year guarantee annuities or other fixed rate annuities), immediate annuities, indexed universal life insurance, funding agreements (through funding agreement-backed notes issuances and the Federal Home Loan Bank of Atlanta) and pension risk transfer solutions. All of FNF’s core title insurance, real estate, technology and mortgage related businesses, assets and liabilities that are not held by F&G remain with FNF. F&G Credit Facility On November 22, 2022, F&G entered into a Credit Agreement (the "F&G Credit Agreement") with certain lenders (the "Lenders") and Bank of America, N.A. as administrative agent (the "Administrative Agent"), swing line lender and an issuing 99 Table of Contents bank, pursuant to which F&G has an available unsecured revolving credit facility (the "F&G Credit Facility") in an aggregate principal amount of $ 550 million to be used for working capital and general corporate purposes. As of December 31, 2022, the F&G Credit Facility was fully drawn with $ 550 million outstanding, offset by approximately $ 3 million of unamortized debt issuance costs. A net partial paydown of $ 35 million was made on January 6, 2023 and, on February 21, 2023, F&G entered into an amendment (the "First Amendment") to the F&G Credit Agreement (the "Amended F&G Credit Agreement"). The First Amendment increased the aggregate principal amount of commitments under the F&G Credit Facility by $ 115 million to $ 665 million. For further information related to the F&G Credit Facility, refer to Note G Notes Payable . Repayment of 5.50 % Senior Notes On September 1, 2022, we repaid the remaining $ 400 million in outstanding principal amount of our 5.50 % Senior Notes due September 2022. Acquisition of AllFirst Title Insurance Agency ("AllFirst") On August 9, 2022, we acquired approximately 74 % of the outstanding equity of AllFirst for approximately $ 130 million in cash consideration. On December 19, 2022, we purchased an additional 6 % of the outstanding equity of AllFirst for approximately $ 10 million in cash consideration. AllFirst and its portfolio brands, FirsTitle, Excel Title Group, Allegiance Title Company, Guaranty Title, Smith Brothers Abstract, Aggieland Title Company, and Guaranty Title New Mexico provide title examination, title plant, abstract, and settlement services for residential, commercial, farm and ranch sales, and energy projects in 121 counties throughout Texas, Oklahoma, New Mexico, and Arkansas. For further information related to the acquisition of AllFirst, refer to Note B Acquisitions. Note Receivable from Cannae In November 2017, in conjunction with the split-off of our former portfolio company investments into a separate company, Cannae Holdings, Inc. ("Cannae"), we issued to Cannae a revolver note, which we and Cannae amended and restated on May 12, 2022 (as amended and restated, the "Cannae Revolver"). The Cannae Revolver in the aggregate principal amount of up to $ 100 million accrues interest quarterly at the Adjusted Term SOFR Rate, as defined in the Amended and Restated Revolver Note, plus 450 basis points and matures on November 17, 2025. The maturity date is automatically extended for additional five-year terms unless notice of non-renewal is otherwise provided by either FNF or Cannae, in their sole discretion. During the year ended December 31, 2022, Cannae borrowed approximately $ 85 million under the Cannae Revolver. We account for the Cannae Revolver as a financing receivable. Interest income is recorded ratably in periods in which principal is outstanding. Uncollectible financing receivables are written off or impaired when, based on all available information, it is probable that a loss has occurred. Principles of Consolidation and Basis of Presentation The accompanying Consolidated Financial Statements are prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and include our accounts as well as our wholly-owned and majority-owned subsidiaries. All intercompany profits, transactions and balances have been eliminated. In our title segment, our investments in unconsolidated subsidiaries and affiliates are accounted for using the equity method until such time that they become wholly or majority-owned. Earnings attributable to noncontrolling interests recorded on the Consolidated Statements of Earnings represents the portion of a majority-owned subsidiary's net earnings or loss that is owned by noncontrolling shareholders of the subsidiary. Noncontrolling interest recorded on the Consolidated Balance Sheets represents the portion of equity in a consolidated subsidiary owned by noncontrolling shareholders. 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 E Investments for additional information on our investments in VIEs. I nvestments 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 100 Table of Contents expected credit losses, with unrealized gains and losses included within accumulated other comprehensive income (loss) ("AOCI"), net of associated adjustments for deferred acquisition costs ("DAC"), value of business acquired ("VOBA"), deferred sales inducements ("DSI"), unearned revenue ("UREV"), Statement of Position 03-1, “ Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts ,” ("SOP 03-1") reserves, and deferred income taxes. Fair values for fixed maturity securities are principally a function of current market conditions and are valued based on quoted prices in markets that are not active or model inputs that are observable or unobservable. We recognize investment income on fixed maturities based on the 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. In our title segment, realized gains and losses on sales of our fixed maturity securitie s are determined on the basis of the cost of the specific investments sold and are credited or charged to income on a trade date basis. Our F&G segment uses FIFO cost basis and generally records 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 accompanying Consolidated Statements of Earnings. 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 E Investments. Preferred and Equity Securities Equity and prefer red securities held are carried at fair value as of the balance sheet dates. The fair values of our equity and preferred securities are based on quoted prices in active markets, or are valued based on quoted prices in markets that are not active or model inputs that are observable or unobservable or based on net asset value (“NAV”) . 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 accompanying Consolidated Statements of Earnings. Recognized gains and losses on sales of our preferred and equity securities 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 accompanying Consolidated Statements of Earnings. Derivative Financial Instruments In our F&G segment, we hedge certain portions of our exposure to product related equity market risk by entering into derivative transactions (primarily call options). All such derivative instruments are recognized as either assets or liabilities in the accompanying Consolidated Balance Sheets at fair value. The changes in fair value are reported within Recognized gains and losses, net in the accompanying Consolidated Statements of Earnings. We purchase financial instruments and issue products 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. The embedded derivative is carried at fair value, which is determined through a combination of market observable inputs such as market value of option and interest swap rates and unobservable inputs such as the mortality multiplier, surrender and withdrawal rates and non-performance spread. The changes in fair value are reported within Benefits and other changes in policy reserves in the accompanying Consolidated Statements of Earnings. See a description of the fair value methodology used in Note D Fair Value of Financial Instruments . Reinsurance Related Embedded Derivatives As discussed in Note O F&G Reinsurance , F&G entered into reinsurance agreements with Kubera Insurance (SAC) Ltd. ("Kubera"), effective December 31, 2018, and ASPIDA Life Re Ltd ("Aspida Re"), effective January 1, 2021, and amended in August 2021 and September 2022, to cede a quota share of certain deferred annuity and multi-year guaranteed annuities ("MYGA") and deferred annuity "), respectively, GAAP and statutory reserves on a coinsurance funds withheld basis, net of applicable existing reinsurance. Effective October 31, 2021, the Kubera agreement was novated from Kubera to Somerset Reinsurance Ltd. ("Somerset"), a certified third-party reinsurer. Funds withheld arrangements allow the Company to retain legal ownership of assets backing reinsurance arrangements until they are earned by the reinsurer while passing credit risk associated with the assets in the funds withheld account to the reinsurer. These arrangements create embedded derivatives considered to be total return swaps with contractual returns that are attributable to the assets and liabilities associated with the reinsurance arrangement. The fair value of the total return swap is based on the change in fair value of the underlying assets held in the funds withheld portfolio. Investment results for the assets that support the coinsurance with funds withheld reinsurance arrangement, including gains and losses from sales, are passed directly to the reinsurer pursuant to contractual terms of the reinsurance arrangement. These total return swaps are not clearly and closely related to the underlying reinsurance contract and thus require bifurcation. The reinsurance related embedded derivative is 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 (losses) on the Consolidated Statements of Earnings. 101 Table of Contents 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 E 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. Loan commitment fees are deferred and amortized on an effective yield basis over the term of the loan. Interest income, amortization of premiums and discounts, prepayment fees, and loan commitment fees are reported in Interest and investment income in the accompanying Consolidated Statements of Earnings. 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. Investments in Unconsolidated Affiliates In our F&G segment, we primarily account for our investments in unconsolidated affiliates (primarily limited partnerships) using the equity method, where the cost is initially recorded as an investment in the entity. Adjustments to the carrying amount reflect our pro rata ownership percentage of the operating results as indicated by NAV in the limited partnership financial statements. Income from investments in unconsolidated affiliates is included within Interest and investment income in the accompanying Consolidated Statements of Earnings. 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. Management meets quarterly with the general partner 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 current quarter valuation and investment income. In our title business we account for our Investments in unconsolidated affiliates using the equity method of accounting and earnings on our investments in unconsolidated affiliates are recorded within Equity in earnings of unconsolidated affiliates within the Consolidated Statements of Earnings. 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 earned investment management fees and the effects of certain reinsurance contracts. 102 Table of Contents 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. Trade and Notes Receivables The carrying values reported in the Consolidated Balance Sheets for trade and notes receivables approximate their fair value. Premium revenues from agency title operations are recognized when the underlying title order and transaction closing, if applicable, are complete and reported to us. Premium revenues from agency operations and related commissions include an accrual based on estimated historical transaction volume data for policies that have closed in a particular period in which premiums have not yet been reported to us. Historically, the time lag between the closing of these transactions by our agents and the reporting of these policies, or premiums, to us has been up to 15 months, with 66 % - 85 % reported within three months following closing, an additional 10 % - 24 % reported within the next three months and the remainder within seven to fifteen months. In addition to accruing these earned but unreported agency premiums, we also accrue agent commission expense, which was 77.1 % of agent premiums earned in 2022, 76.7 % of agent premiums earned in 2021, and 76.4 % of agent premiums earned in 2020. The amount due from our agents relating to this accrual, i.e., the agent premium less their contractual retained commission, was approximately $ 74 million and $ 113 million at December 31, 2022 and 2021, respectively. Due to the offsetting effects of reversing prior period accruals, the impact of this accrual to our recorded Agency title insurance premiums, Agent commissions and net earnings in any given period is not considered material. Fair Value of Financial Instruments The fair values of financial instruments presented in the Consolidated Financial Statements are estimates of the fair values at a specific point in time 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 D Fair Value of Financial Instruments . Fair Value of Assets Acquired and Liabilities Assumed in Business Combinations 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 noncontrolling interest in the acquiree, and to measure these items generally at their acquisition date fair values. Goodwill is recorded as the residual amount by which the purchase price exceeds the fair value of the net assets acquired. 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 or 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. Contingent consideration liabilities or receivables recorded in connection with business acquisitions must also be adjusted for changes in fair value until settled. 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 an annual goodwill impairment analysis based on a review of qualitative factors to determine if events and circumstances exist, which will lead to a determination that the fair value of a reporting unit is greater than its carrying amount, prior to performing a full fair-value assessment. We completed annual goodwill impairment analyses in the fourth quarter of each period presented using a September 30 measurement date. For the years ended December 31, 2022, 2021 and 2020, we determined there were no events or circumstances that indicated that the carrying value of a reporting unit exceeded the fair value. 103 Table of Contents VOBA, DAC and DSI Our intangible assets include the value of insurance and reinsurance contracts acquired (hereafter referred to as VOBA), DAC, and DSI. 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, and is sensitive to assumptions including the discount rate, surrender rates, partial withdrawals, utilization rates, projected investment spreads, mortality, and expenses. DAC consists principally of commissions that are related directly to the successful sale of new or renewal insurance contracts, which may be deferred to the extent recoverable. Indirect or unsuccessful acquisition costs, maintenance, product development and overhead expenses are charged to expense as incurred. DSI represents up front bonus credits and vesting and persistency bonuses to policyholder account values, which may be deferred to the extent recoverable. The methodology for determining the amortization of VOBA, DAC and DSI varies by product type. For all insurance contracts accounted for under long-duration contract deposit accounting, amortization is based on assumptions consistent with those used in the development of the underlying contract liabilities, adjusted for emerging experience and expected trends. For all of the insurance intangibles (VOBA, DAC and DSI), the balances are generally amortized over the lives of the policies in relation to the expected emergence of estimated gross profits (“EGPs”) from investment income, surrender charges and other product fees, less policy benefits, maintenance expenses, mortality, and expense margins. Recognized gains (losses) on investments, changes in fair value of derivatives and changes in fair value of the embedded derivative on our FIA and IUL products are included in actual gross profits in the period realized as described further below. Amortization is reported within Depreciation and amortization in the accompanying Consolidated Statements of Earnings. Changes in assumptions, including our earned rate (i.e., long term assumptions of the Company’s expected earnings on related investments), budgeted option costs (i.e., the expected cost to purchase call options in future periods to fund the equity indexed linked feature) and surrender rates can have a significant impact on VOBA, DAC and DSI balances and amortization rates. Due to the relative size and sensitivity to minor changes in underlying assumptions of those intangible balances, we perform quarterly and annual analyses of the VOBA, DAC and DSI balances for recoverability to ensure that the unamortized portion does not exceed the expected recoverable amounts. At each evaluation date, actual historical gross profits are reflected with the impact on the intangibles reported as “unlocking” as a component of amortization expense, and estimated future gross profits and related assumptions are evaluated for continued reasonableness. Any adjustment in estimated future gross profits requires that the amortization rate be revised (“unlocking”) retroactively to the date of the contract issuance or acquisition date with respect to VOBA. The cumulative unlocking adjustment is recognized as a component of current period amortization and reflected within Depreciation and amortization in the accompanying Consolidated Statements of Earnings. For investment-type products, the VOBA, DAC and DSI assets are adjusted for the impact of unrealized gains (losses) on AFS investments as if these gains (losses) had been realized, with corresponding credits or charges included in AOCI ("shadow adjustments"). 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 and state licenses, and computer software, which are generally recorded in connection with acquisitions 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, generally ten years , 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, ranging from five to ten years . For internal-use computer software products, 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. 104 Table of Contents We recorded $ 14 million in impairment expense to other intangible assets in our F&G segment for the year ended December 31, 2022. We recorded no impairment expense to other intangible assets during the years ended December 31, 2021, and 2020. Title Plants Title plants are recorded at the cost incurred to construct or obtain and organize historical title information to the point it can be used to perform title searches. Costs incurred to maintain, update and operate title plants are expensed as incurred. Title plants are not amortized as they are considered to have an indefinite life, if maintained. Sales of title plants are reported at the amount received net of the adjusted costs of the title plant sold. Sales of title plant copies are reported at the amount received. No cost is allocated to the sale of copies of title plants unless the carrying value of the title plant is diminished or impaired. Title plants are reviewed for impairment whenever events or circumstances indicate that the carrying amounts may not be recoverable. We reviewed title plants for impairment for the years ended December 31, 2022, 2021 and 2020 and identified and recorded impairment expense of $ 1 million in the year ended December 31, 2022 and reco rded no impair ment expense related to title plants in the years ended December 31, 2021 or 2020. Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation. 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 FIAs, fixed rate annuities, IULs, funding agreements and PRT and immediate annuities contracts without life contingencies. The liabilities for contractholder funds for fixed rate annuities, funding agreements and PRT and immediate annuities contracts without life contingencies consist of contract account balances that accrue to the benefit of the contractholders. The liabilities for FIA 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 is carried at fair value in Contractholder funds in the accompanying Consolidated Balance Sheets with changes in fair value reported in Benefits and other changes in policy reserves in the accompanying Consolidated Statements of Earnings. See a description of the fair value methodology used in Note D Fair Value of Financial Instruments . Liabilities for the Guaranteed Minimum Withdrawal Benefits ("GMWB") and Guaranteed Minimum Death Benefit ("GMDB") riders on FIA and fixed rate annuity products are calculated by multiplying the benefit ratio by the cumulative assessments recorded from contract inception through the balance sheet date less the cumulative guaranteed minimum withdrawal and death benefit payments plus interest. The benefit ratio is the ratio of the present value of future guaranteed minimum withdrawal and death benefit payments to the present value of the assessments used to provide the guaranteed minimum withdrawal and death benefit payments using the same assumptions as we use for our intangible assets. If experience or assumption changes result in a new benefit ratio, the reserves are adjusted to reflect the changes in a manner similar to the unlocking of VOBA, DAC and DSI. The accounting for these GMWB and GMDB benefit liabilities (also referred to as "SOP 03-1 liabilities") impact EGPs used to calculate amortization of VOBA, DAC and DSI. The related reserve is adjusted for the impact of unrealized gains (losses) on AFS investments as if these gains (losses) had been realized, with corresponding credits or charges included in AOCI ("shadow adjustments"). Contractholder funds include funds related to funding agreements that have been issued pursuant to the FABN Program as well as to the Federal Home Loan Bank of Atlanta (" FHLB"). Single premiums are received at the initiation of the funding agreements. As of December 31, 2022 and December 31, 2021, we had approximately $ 2,200 million and $ 1,900 million outstanding under the FABN Program, respectively, which provides for semi-annual interest payments with principal maturities. Reserves for the FHLB funding agreements totaled $ 1,982 million and $ 1,543 million as of December 31, 2022 and 2021, respectively. The FHLB agreements provide a guaranteed stream of payments or provide for a bullet payment at maturity with renewal provisions. In accordance with the 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 settle our general obligations. The collateral investments had a fair value of $ 3,387 million and $ 2,469 million as of December 31, 2022 and 2021, respectively. Payments pursuant to FABN and FHLB funding agreements extend through 2029. Future Policy Benefits The liabilities for future policy benefits and claim reserves for traditional life policies and life contingent immediate annuity policies (which includes life-contingent PRT annuities) are computed using assumptions for investment yields, mortality and withdrawals, with a provision for adverse deviation, based on generally accepted actuarial methods and 105 Table of Contents assumptions at the time of acquisition or contract issue. The investment yield assumption is 4.3 % for traditional direct life reserves for all contracts, 4.1 % for life contingent pay-out annuities, and ranges from 3.6 % to 6.9 % for PRT annuities with life contingencies. Policies are terminated through surrenders and maturities, where surrenders represent the voluntary terminations of policies by policyholders and maturities are determined by policy contract terms. Surrender assumptions are based upon policyholder experience adjusted for expected future conditions. For long-duration contracts the assumptions are locked in at contract inception and only modified if we deem the reserves to be inadequate. We periodically review actual and anticipated experience compared to the assumptions used to establish policy benefits. If the net GAAP liability (gross reserves less VOBA, DAC and DSI) is less than the gross premium liability, impairment is deemed to have occurred, and the VOBA, DAC and DSI asset balances are reduced until the net GAAP liability is equal to the gross premium liability. If the VOBA, DAC and DSI asset balances are completely written off and the net GAAP liability is still less than the gross premium liability, then an additional liability is recorded to arrive at the gross premium liability. Reserve for Title Claim Losses Our reserve for title claim losses includes known claims as well as losses we expect to incur, net of recoupments. Each known claim is reserved based on our review as to the estimated amount of the claim and the costs required to settle the claim. Reserves for claims, which are incurred but not reported are established at the time premium revenue is recognized based on historical loss experience and also take into consideration other factors, including industry trends, claim loss history, current leg al environment, geographic considerations and the type of policy written. The reserve for title claim losses also includes reserves for losses arising from closing and disbursement functions due to frau d or operational error. If a loss is r elated to a policy issued by an independent agent, we may proceed against the independent agent pursuant to the terms of the agency agreement. In any event, we may proceed against third parties who are responsible for any loss under th e title insurance policy under rights of subrogation. Secured Trust Deposits In the state of Illinois, a trust company is permitted to commingle and invest customers’ assets with its own assets, pending completion of real estate transactions. Accordingly, our Consolidated Balance Sheets reflect a secured trust deposit liability of $ 862 million and $ 934 million at December 31, 2022 and 2021, respectively, representing customers’ assets held by us and corresponding assets including cash and investments pledged as security for those trust balances. 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. The 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 Title In our Title segment, in a limited number of situations, we limit our maximum loss exposure by reinsuring certain risks with other title insurers. We also earn a small amount of additional income, which is reflected in our direct premiums, by assuming reinsurance for certain risks of other title insurers. We cede a portion of certain policy and other liabilities under agent fidelity, excess of loss and case-by-case reinsurance agreements. Reinsurance agreements provide that in the event of a loss (including costs, attorneys’ fees and expenses) exceeding the retained amounts, the reinsurer is liable for the excess amount assumed. However, the ceding company remains primarily liable in the event the reinsurer does not meet its contractual obligations. F&G In our F&G segment, our insurance subsidiaries enter into reinsurance agreements with other companies in the normal course of business. For arrangements in which F&G follows reinsurance accounting and for most arrangements that are accounted for as separate investment contracts, we present the amounts consistently and on a gross basis in our Consolidated Balance Sheets with the ceded reserves balance presented as a Reinsurance recoverable. Where applicable, deferred gains associated with the reinsurance of insurance and investment contracts will be included within Accounts payable and accrued expenses with the related accretion reflected within Escrow, title-related and other fees on the Consolidated Balance Sheets and Statements of Earnings, respectively. Where applicable, deferred costs associated with the reinsurance of insurance and 106 Table of Contents investment contracts will be included within the Prepaid expense and other assets with the related amortization reflected within Other operating expenses in the Consolidated Balance Sheets and Statements of Earnings, respectively. Premium and expense are recorded net of reinsurance ceded for both insurance and investment contracts. For some arrangements in which deposit accounting is applied or the arrangement is accounted for as a separate investment contract, the assets and liabilities of certain reinsurance contracts are presented on a net basis in the accompanying Consolidated Balance Sheets. The related net investment income, investment gain/loss, and change in reserves are presented net on the accompanying Consolidated Statements of Income. F&G intends to apply the right of offset where there is a right of offset explicit in the reinsurance agreement. See Note O F&G Reinsurance for more details over F&G's reinsurance agreements. Revenue Recognition Refer to Note L Revenue Recognition for a description of our accounting for our various revenue streams. Benefits and Other Changes in Policy Reserves Benefit expenses for FIAs, fixed rate annuities, IUL policies and funding agreements include interest credited and, for FIA and IUL policies, index credits, to contractholder account balances. 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. Interest crediting rates associated with funds invested in the general account of our insurance subsidiaries range from 0.5 % to 6.0 % for fixed rate annuities and FIAs combined, 3.0 % to 4.8 % for IULs, and 0.9 % to 5.2 % for funding agreements. Other changes in policy reserves include the change in the fair value of the FIA embedded derivative and the change in the SOP 03-1 reserve for GMWB and GMDB benefits. Other changes in policy reserves also include the change in reserves for life insurance products. For traditional life and 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. Stock-Based Compensation Plans We accou nt 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. Earnings Per Share Basic earnings per share, as presented on the Consolidated Statement of Earnings, is computed by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period. In periods when earnings are positive, diluted earnings per share is calculated by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding plus the impact of assumed conversions of potentially dilutive securities. For periods when we recognize a net loss, diluted earnings per share is equal to basic earnings per share as the impact of assumed conversions of potentially dilutive securities is considered to be antidilutive. We have granted certain stock options, shares of restricted stock, convertible debt instruments and certain other convertible share based payments, which have been treated as common share equivalents for purposes of calculating diluted earnings per share for periods in which positive earnings have been reported. The net earnings of F&G in our calculation of diluted earnings per share is adjusted for dilution related to certain F&G restricted stock granted to F&G's employees in accordance with ASC 260-10-55-20. We calculate the ratio of the shares of F&G we own to the total weighted average diluted shares of F&G outstanding and multiply the ratio by F&G's net earnings. The result is used for F&G's net earnings attributable to FNF included in our consolidated net earnings in the numerator for our diluted EPS calculation. 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. There were 1 million antidilutive instruments outstanding for the years ended December 31, 2022 and 2021. Comprehensive Earnings (Loss) We report Comprehensive earnings (loss) in accordance with GAAP on the Consolidated Statements of Comprehensive Earnings. Total comprehensive earnings are defined as all changes in shareholders' equity during a period, other than those resulting from investments by and distributions to shareholders. While total comprehensive earnings is the activity in a period and is largely driven by net earnings in that period, accumulated other comprehensive earnings or loss represents the cumulative balance of other comprehensive earnings, 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 Earnings. 107 Table of Contents Changes in the balance of Other comprehensive earnings (loss) by component are as follows: Unrealized gain (loss) on investments and other financial instruments, net (excluding investments in unconsolidated affiliates) Unrealized gain (loss) relating to investments in unconsolidated affiliates Unrealized (loss) gain on foreign currency translation and cash flow hedging Minimum pension liability adjustment Total Accumulated Other Comprehensive Earnings (Loss) (In millions) Balance January 1, 2020 $ 46 $ 18 $ ( 11 ) $ ( 10 ) $ 43 Reclassification adjustments ( 73 ) — — — ( 73 ) Other comprehensive earnings 1,307 3 10 14 1,334 Balance December 31, 2020 1,280 21 ( 1 ) 4 1,304 Reclassification adjustments ( 123 ) — — — ( 123 ) Other comprehensive earnings ( 410 ) 22 ( 7 ) ( 7 ) ( 402 ) Balance December 31, 2021 747 43 ( 8 ) ( 3 ) 779 Reclassification adjustments 173 — — — 173 Other comprehensive earnings ( 3,810 ) 9 ( 18 ) 5 ( 3,814 ) Balance December 31, 2022 $ ( 2,890 ) $ 52 $ ( 26 ) $ 2 $ ( 2,862 ) Redeemable Non-controlling Interest Subsequent to our acquisition of Lender Processing Services, Inc. ("LPS") in January 2014, we issued a 35 % ownership interest in ServiceLink to funds affiliated with Thomas H. Lee Partners ("THL" or "the minority interest holder"). THL had an option to put its ownership interests of ServiceLink to us if no public offering of the corresponding business was consummated after four years from the date of FNF's purchase of LPS. The Class A units owned by THL (the "redeemable noncontrolling interests") could have been settled in cash or common stock of FNF or a combination of both at our election. As of January 2018, no public offering was made and the redeemable noncontrolling interests were no longer subject to a holding requirement. The redeemable noncontrolling interests were settled at the current fair value at the time we received notice of THL's put election as determined by the parties or by a third-party appraisal under the terms of the Unit Purchase Agreement. As a result of a recapitalization of ServiceLink in 2015, the ownership interest by the minority interest holder was reduced from 35 % to 21 %. The redeemable noncontrolling interests were recorded at their initial value of $ 344 million in our Consolidated Balance Sheets and would have been adjusted to fair value were such value to rise above the initial value. As these redeemable noncontrolling interests provided for redemption features not solely within our control, we classified the redeemable noncontrolling interests outside of permanent equity. On July 29, 2020, we purchased for $ 90 million the outstanding Class A units of ServiceLink held by THL. As of the purchase date, ServiceLink is a wholly-owned subsidiary of FNF. 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, product guarantees, and amortization of intangibles. During the fourth quarter of 2022, based on increases in interest rates and pricing changes during 2022, we updated certain FIA assumptions used to calculate the fair value of the embedded derivative component within contractholder funds and certain assumptions used to calculate SOP 03-1 liabilities and intangible balances. These changes, taken together, resulted in an increase in contractholder funds and future policy reserves of $ 96 million and an increase to intangible assets of $ 47 million. During the third quarter of 2021, we implemented a new actuarial valuation system. As a result, our third quarter 2021 assumption updates include model refinements and assumption updates resulting from the implementation. The system implementation and assumption review process that occurred in the third quarter of 2021 included refinements in the calculation of the fair value of the embedded derivative component of our FIAs within contractholder funds and updates to the surrender rates, GMWB utilization, IUL premium persistency, maintenance expenses, and earned rate assumptions to reflect our current and expected future experience. These changes, taken together, resulted in a decrease in contractholder funds and future policy reserves of $ 425 million and a decrease to intangible assets of $ 136 million. These model refinements and assumptions are also used in the SOP 03-1 liability for GMWB and GMDB benefits and resulted in an increase in the liability of $ 28 million. There was no material change to underlying policyholder behavior. The majority of the changes represent one-time adjustments in the 108 Table of Contents third quarter of 2021 related to the cumulative impact of the system implementation and are not expected to re-occur in the future. Note B — Acquisitions AllFirst On August 9, 2022, we acquired approximately 74 % of the outstanding equity of AllFirst for approximately $ 130 million in cash consideration. On December 19, 2022, we purchased an additional 6 % of the outstanding equity of AllFirst for approximately $ 10 million in cash consideration. The acquisition was accounted for as a business combination under FASB Accounting Standards Codification Topic 805, Business Combinations ("Topic 805"). The purchase price has been allocated to AllFirst's assets acquired and liabilities assumed based on their fair values as of August 9, 2022. Goodwill has been recorded based on the amount that the purchase price exceeds the fair value of the net assets acquired. Goodwill consists primarily of intangible assets that do not qualify for separate recognition. The goodwill recorded is expected to be deductible for tax purposes. In connection with the acquisition, we recorded preliminary fair value estimates for goodwill, other intangibles, other assets, other liabilities and non-controlling interest of $ 105 million, $ 55 million, $ 40 million, $ 19 million and $ 46 million, respectively, as of December 31, 2022. The gross carrying value and weighted average estimated useful lives of Other intangible assets acquired in the AllFirst acquisition consist of the following (dollars in millions): Gross Carrying Value Weighted Average Estimated Useful Life (in years) Other intangible assets: Customer relationships $ 46 10 Trade name 7 10 Non-compete agreements 1 5 Software 1 2 Total Other intangible assets $ 55 F&G On June 1, 2020, we acquired 100 % of the outstanding equity of F&G for approximately $ 2.7 billion pursuant to the Agreement and Plan of Merger, dated February 7, 2020, as amended (the "Merger Agreement"). In connection with the Merger, we issued approximately 24 million shares of FNF common stock and paid approximately $ 1.8 billion in cash to former holders of F&G ordinary and preferred shares. On August 26, 2020, we issued an additional 1 million shares of FNF common stock and paid approximately $ 100 million in cash to Kingfishers, LP., Kingstown Partners Master, LTD., Kingstown Partners II, LP., Kingstown 1740 Fund, LP. and Ktown, LP. (collectively the "Kingstown Dissenters"), who are former owners of F&G common stock. For more information related to the Kingstown Dissenters, refer to Note H Commitments and Contingencies . At closing, all outstanding shares of F&G common stock, excluding shares associated with the liability to former owners, were converted into the right to receive the Merger Consideration (as defined in the Merger Agreement). Additionally, each outstanding F&G Option and F&G Phantom unit was canceled and converted into options to purchase FNF common stock and phantom units denominated in FNF common stock, and each outstanding warrant to purchase F&G common stock was converted into the right to purchase and receive upon exercise $ 8.18 in cash and .0833 shares of FNF common stock. At closing, our subsidiaries' ownership of F&G common and preferred shares was converted into approximately 7 million shares of FNF common stock, which are reflected as treasury shares in the accompanying Consolidated Financial Statements. The initial purchase price is as follows (in millions): Cash paid for outstanding F&G shares $ 1,903 Less: Cash Acquired 827 Net cash paid for F&G 1,076 Value of FNF share consideration 806 Value of outstanding converted equity awards attributed to services already rendered 28 Total net consideration paid $ 1,910 The acquisition was accounted for as a business combination under Topic 805.The purchase price was allocated to F&G's assets acquired and liabilities assumed based on their fair values as of the acquisition date. Goodwill has been recorded based on the amount that the purchase price exceeds the fair value of the net assets acquired. Goodwill consists primarily of intangible 109 Table of Contents assets that do not qualify for separate recognition. The goodwill recorded is not expected to be deductible for tax purposes, except for $ 16 million related to a prior F&G transaction. Pursuant to Topic 805, the financial statements were not retrospectively adjusted for any provisional amount changes that occurred during the measurement period. Rather, we recognized provisional adjustments as we obtained information not available as of the completion of the preliminary fair value calculation. We also recorded, in the same period as the financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, as a result of any changes to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. 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 Fixed maturity securities $ 22,389 Preferred securities 876 Equity securities 52 Derivative instruments 313 Mortgage loans 1,755 Investments in unconsolidated affiliates 1,049 Other long-term investments 430 Short-term investments 37 Trade and notes receivable 1 Reinsurance recoverable 2,998 Goodwill 1,756 Prepaid expenses and other assets 379 Lease assets 8 Other intangible assets 2,107 Deferred tax asset 269 Assets of discontinued operations 2,392 Total assets acquired 36,811 Contractholder funds 26,451 Future policy benefits 3,871 Accounts payable and accrued liabilities 897 Notes payable 589 Funds withheld for reinsurance liabilities 816 Lease liabilities 9 Liabilities of discontinued operations 2,268 Total liabilities assumed 34,901 Net assets acquired $ 1,910 The gross carrying value and weighted average estimated useful lives of Other intangible assets acquired in the F&G acquisition consist of the following (dollars in millions): Gross Carrying Value Estimated Useful Life (in years) Other intangible assets: Value of business acquired $ 1,908 Various Value of distribution network acquired 140 15 Trademarks and licenses 38 10 Software 21 2 Total Other intangible assets $ 2,107 110 Table of Contents We completed our assessment of the fair value of assets acquired and liabilities assumed within the one-year period from the date of acquisition. During the year ended December 31, 2021, we recorded measurement period adjustments as of the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of the acquisition date. Such adjustments resulted in a decrease in Reinsurance recoverable of approximately $ 289 million, an increase in Other intangible assets of approximately $ 61 million, a decrease in Future policy benefits of $ 227 million and various other, individually immaterial items. There was no material impact on Consolidated Statements of Earnings as a result of the measurement period adjustments recorded. Unaudited Supplemental Pro-forma Financial Results F&G's financial results since the acquisition date are reflected in our Consolidated Financial Statements. F&G's revenues and net earnings for the period from June 1, 2020 through December 31, 2020 of $ 1,233 million and $ 136 million, respectively, are included in the Consolidated Statements of Earnings for the year ended December 31, 2020. For comparative purposes, selected unaudited pro-forma consolidated results of operations of FNF for the year ended December 31, 2020 is presented below. Unaudited pro-forma results presented assume the consolidation of F&G occurred as of January 1, 2019. Year Ended December 31, 2020 (In millions) Total revenues $ 10,897 Net earnings attributable to FNF common shareholders 1,233 Amounts reflect certain pro forma adjustments to revenue and net earnings that were directly attributable to the acquisition, and for the elimination of historical activity between FNF and F&G prior to the acquisition. These adjustments include the following: • elimination of valuation changes on FNF's investment in F&G common and preferred shares prior to the acquisition; • elimination of dividends received by FNF related to its holdings of F&G's common and preferred shares prior to the acquisition; • elimination of advisory fees F&G paid to FNF; • elimination of transaction costs paid by F&G; • adjustment to record interest expense related to financing associated with the acquisition; • adjustment to reflect the elimination of historical amortization of F&G intangibles and the additional amortization of F&G intangibles measured at fair value as of the acquisition date; and • adjustment to reflect the prospective reclassification from accumulated other comprehensive earnings of the unrealized gains on available-for-sale securities to a premium, which will be amortized into income based on the expected life of the investment securities. 111 Table of Contents Note C — Summary of Reserve for Title Claim Losses A summary of the reserve for title claim losses follows: Year Ended December 31, 2022 2021 2020 (Dollars in millions) Beginning balance $ 1,883 $ 1,623 $ 1,509 Change in insurance recoverable ( 128 ) 94 34 Claim loss provision related to: Current year 308 385 283 Prior years — — — Total title claim loss provision 308 385 283 Claims paid, net of recoupments related to: Current year ( 21 ) ( 14 ) ( 11 ) Prior years ( 232 ) ( 205 ) ( 192 ) Total title claims paid, net of recoupments ( 253 ) ( 219 ) ( 203 ) Ending balance of claim loss reserve for title insurance $ 1,810 $ 1,883 $ 1,623 Provision for title insurance claim losses as a percentage of title insurance premiums 4.5 % 4.5 % 4.5 % Several lawsuits have been filed by various parties against Chicago Title Company and Chicago Title Insurance Company as its principal (collectively, the “Named Companies”). Generally, plaintiffs claim they are investors who were solicited by Gina Champion-Cain through her former company, ANI Development LLC (“ANI”), or other affiliates to provide funds that purportedly were to be used for high-interest, short-term loans to parties seeking to acquire California alcoholic beverage licenses. Plaintiffs contend they were told that under California state law, alcoholic beverage license applicants are required to deposit into escrow an amount equal to the license purchase price while their applications remain pending with the State. Plaintiffs further alleged that employees of Chicago Title Company participated with Ms. Champion-Cain and her entities in a fraud scheme involving an escrow account maintained by Chicago Title Company into which some of the plaintiffs’ funds were deposited. In connection with the alcoholic beverage license scheme, a lawsuit styled, Securities and Exchange Commission v. Gina Champion-Cain and ANI Development, LLC , was filed in the United States District Court for the Southern District of California asserting claims for securities fraud against Ms. Champion-Cain and certain of her affiliated entities. A receiver was appointed by the court to preserve the assets of the defendant affiliated entities (the “receivership entities”), pay their debts, operate the businesses and pursue any claims they may have against third-parties. Pursuant to the authority granted to her by the federal court, on January 7, 2022, a lawsuit styled, Krista Freitag v. Chicago Title Co. and Chicago Title Ins. Co. , was filed in San Diego County Superior Court by the receiver on behalf of the receivership entities against the Named Companies. The receiver seeks compensatory, incidental, consequential, and punitive damages, and seeks the recovery of attorneys’ fees. In turn, the Named Companies petitioned the Federal Court to sue ANI, via the receiver, to pursue indemnity and other claims against the receivership entities as joint tortfeasors, which was granted. On April 26, 2022, the Named Companies reached a global settlement with the receiver and several other investor claimants. As a condition of the settlement, the Named Companies and the receiver jointly sought court approval of the global settlement and entry of an order barring any claims against the Named Companies related to the alcoholic beverage license scheme. On November 23, 2022, the federal court overruled any objections by non-joining investors and entered an order approving the global settlement and barring further claims against the Named Companies (“Settlement and Bar Order”). The receiver is in receipt of the settlement payment from Chicago Title Company and will distribute the amount designated for each non-joining investor at the conclusion of any such investor’s appeal of the Settlement and Bar Order (or back to Chicago Title Company if an appeal is successful). Some of the investor claimants who objected to entry of the Settlement and Bar Order have appealed the decision to the United States Court of Appeals for the Ninth Circuit by (Cases 22-56206, 22-56208, and 23-55083). Appellate briefing is expected to take place over the next several months. The following lawsuits remain pending in the Superior Court of San Diego County for the State of California, all of which involve investor claimants who have claims against the Named Companies, objected to the settlement with the receiver, and have appealed the Settlement and Bar Order. Since any pending and future claims against the Named Companies are barred, the state court cases where plaintiffs have served a notice of appeal have been stayed pending the outcome of the appeals, and the claims against the Named Companies by non-appealing plaintiffs have been dismissed with prejudice. While they have not been consolidated into one action, they have been deemed by the court to be related and are assigned to the same judge for purposes of judicial economy. 112 Table of Contents On Decem ber 13, 2019, a lawsuit styled, Kim Funding, LLC, Kim H. Peterson, Joseph J. Cohen, and ABC Funding Strategies, LLC v. Chicago Title Co., Chicago Title Ins. Co., Thomas Schwiebert, Adelle Ducharme, and Betty Elixman , was filed in San Diego County Superior Court. Plaintiffs claim losses of more than $ 250 million as a result of the alleged fraud scheme, and also seek statutory, treble, and punitive damages, as well as the recovery of attorneys' fees. The Named Companies have filed a cross-complaint against Ms. Champion-Cain, and others. The Named Companies have reached a conditional settlement with the members of ABC Funding Strategies, LLC plaintiffs under confidential terms. On July 7, 2020, a cross-claim styled, Laurie Peterson v. Chicago Title Co., Chicago Title Ins. Co., Thomas Schwiebert, Adelle Ducharme, and Betty Elixman , was filed in an existing lawsuit styled, Banc of California, National Association v. Laurie Peterson , which is pending in San Diego County Superior Court. Cross-complaint plaintiff was sued by a bank to recover in excess of $ 35 million that she allegedly guaranteed to repay for certain investments made by the Banc of California in the alcoholic beverage license scheme. Cross-complaint plaintiff has, in turn, sued the Named Companies in that action seeking in excess of $ 250 million in monetary losses as well as exemplary damages and attorneys’ fees. The Named Companies filed a cross-complaint against Ms. Champion-Cain, and others, and the Named Companies were substituted in as the Plaintiff following a settlement with the bank. On Septemb er 3, 2020, a cross-claim styled, Kim H. Peterson Trustee of the Peterson Family Trust dated April 14 1992 v. Chicago Title Co., Chicago Title Ins. Co., Thomas Schwiebert, Adelle Ducharme, and Betty Elixman , was filed in an existing lawsuit styled, CalPrivate Bank v. Kim H. Peterson Trustee of the Peterson Family Trust dated April 14 1992 , which is pending in Superior Court of San Diego County for the State of California. Cross-complaint plaintiff was sued by a bank to recover in excess of $ 12 million that the trustee allegedly guaranteed to repay for certain investments made by CalPrivate Bank in the alcoholic beverage license scheme. Cross-complaint plaintiff has, in turn, sued the Named Companies in that action seeking in excess of $ 250 million in monetary losses as well as exemplary damages and attorneys’ fees. On November 2, 2020, a lawsuit styled, C alPrivate Bank v. Chicago Title Co. and Chicago Title Ins. Co. , was also filed in the Superior Court of San Diego County for the State of California. Plaintiff claims losses in excess of $ 12 million based upon business loan advances made in the alcoholic beverage license scheme, and seeks punitive damages and the recovery of attorneys’ fees. The Named Companies have filed a cross-complaint against Ms. Champion-Cain, and others. Chicago Title Company has also resolved a number of other pre-suit claims and previously-disclosed lawsuits from both individual and groups of alleged investors under confidential terms. Based on the facts and circumstances of the remaining claims, including the settlements already reached, we have recorded reserves included in our reserve for title claim losses, which we believe are adequate to cover losses related to this matter, and believe that our reserves for title claim losses are adequate. We continually update loss reserve estimates as new information becomes known, new loss patterns emerge or as other contributing factors are considered and incorporated into the analysis of reserve for claim losses. Estimating future title loss payments is difficult because of the complex nature of title claims, the long periods of time over which claims are paid, significantly varying dollar amounts of individual claims and other factors. Due to the uncertainty inherent in the process and to the judgment used by management, the ultimate liability may be greater or less than our current reserves. If actual claims loss development varies from what is currently expected and is not offset by other factors, it is possible that additional reserve adjustments may be required in future periods in order to maintain our recorded reserve within a reasonable range of our actuary's central estimate. 113 Table of Contents Note D — 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 NAV. The hierarchy for fair value measurement is defined as follows: 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. 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 limited partnership 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 limited partnerships 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 meets quarterly with the general partner 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 current quarter 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. 114 Table of Contents The carrying amounts and estimated fair values of our financial instruments for which the disclosure of fair values is required, including financial assets and liabilities measured and carried at fair value on a recurring basis, with the exception of investment contracts, portions of other long-term investments and debt, which are disclosed later within this footnote, was summarized according to the hierarchy previously described, as follows (in millions): December 31, 2022 Level 1 Level 2 Level 3 NAV Fair Value Assets Cash and cash equivalents $ 2,286 $ — $ — $ — $ 2,286 Fixed maturity securities, available-for-sale: Asset-backed securities — 5,204 6,263 — 11,467 Commercial mortgage-backed securities — 3,026 37 — 3,063 Corporates 40 12,857 1,440 — 14,337 Hybrids 93 638 — — 731 Municipals — 1,431 29 — 1,460 Residential mortgage-backed securities — 1,225 302 — 1,527 U.S. Government 260 11 — — 271 Foreign Governments — 223 16 — 239 Equity securities 621 — 10 47 678 Preferred securities 320 582 1 — 903 Derivative investments — 244 — — 244 Reinsurance related embedded derivative, included in other assets — 279 — — 279 Short term investments 2,590 — — — 2,590 Other long-term investments — — 71 — 71 Total financial assets at fair value $ 6,210 $ 25,720 $ 8,169 $ 47 $ 40,146 Liabilities Derivatives: FIA/ IUL embedded derivatives, included in contractholder funds — — 3,115 — 3,115 Total financial liabilities at fair value $ — $ — $ 3,115 $ — $ 3,115 115 Table of Contents December 31, 2021 Level 1 Level 2 Level 3 NAV Fair Value Assets Cash and cash equivalents $ 4,360 $ — $ — $ — $ 4,360 Fixed maturity securities, available-for-sale: Asset-backed securities — 4,736 3,959 — 8,695 Commercial mortgage-backed securities — 2,944 35 — 2,979 Corporates 37 15,322 1,135 — 16,494 Hybrids 132 780 — — 912 Municipals — 1,458 43 — 1,501 Residential mortgage-backed securities — 731 — — 731 U.S. Government 394 — — — 394 Foreign Governments — 266 18 — 284 Equity securities 1,206 — 9 48 1,263 Preferred securities 506 893 2 — 1,401 Derivative investments — 816 — — 816 Short term investments 168 2 321 — 491 Other long-term investments — — 78 — 78 Total financial assets at fair value $ 6,803 $ 27,948 $ 5,600 $ 48 $ 40,399 Liabilities Derivatives: FIA/ IUL embedded derivatives, included in contractholder funds — — 3,883 — 3,883 Reinsurance related embedded derivatives, included in other liabilities — 73 — — 73 Total financial liabilities at fair value $ — $ 73 $ 3,883 $ — $ 3,956 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 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, 2022 or December 31, 2021. Certain equity investments are measured using NAV as a practical expedient in determining fair value. 116 Table of Contents Derivative Financial Instruments The fair value of call options is based upon valuation pricing models, which represents what we would expect to receive or pay at the balance sheet date if we canceled the options, entered into offsetting positions, or exercised the options. Fair values for these instruments are determined internally, based on industry accepted valuation pricing models, which use market-observable inputs, including interest rates, yield curve volatilities, and other factors. The fair value of futures contracts (specifically for FIA contracts) represents the cumulative unsettled variation margin (open trade equity, net of cash settlements), which represents what we would expect to receive or pay at the balance sheet date if we canceled the contracts or entered into offsetting positions. These contracts are classified as Level 1. The fair value measurement of the FIA/ 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 call 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, 2022 and December 31, 2021was 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 updated assumptions during the fourth quarter of 2022 and the implementation of a new actuarial valuation system and assumption updates during third quarter of 2021. The system implementation and assumption review process included refinements in the calculation of the fair value of the embedded derivative component of our fixed indexed annuities. The fair value of the reinsurance-related embedded derivatives in the funds withheld reinsurance agreements with Kubera Insurance (SAC) Ltd. ("Kubera") (effective October 31, 2021, this agreement was novated from Kubera to Somerset Reinsurance Ltd. ("Somerset"), a certified third-party reinsurer) and ASPIDA Life Re Ltd ("Aspida Re") 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. Please see Note O F&G Reinsurance for further discussion on F&G reinsurance agreements. Other long-term investments We hold a fund-linked note that 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 a call option on the NAV of the fund with a strike price of zero since Fidelity & Guaranty Life Insurance Company ("FGL Insurance") 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 call 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 F 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. 117 Table of Contents 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, 2022 and December 31, 2021 are as follows: Fair Value at Valuation Technique Unobservable Input(s) Range (Weighted average) December 31, 2022 (in millions) December 31, 2022 Assets Asset-backed securities $ 5,916 Broker-quoted Offered quotes 52.85 % - 117.17 % ( 94.18 %) Asset-backed securities 347 Third-Party Valuation Offered quotes 41.43 % - 210.50 % ( 67.99 %) Commercial mortgage-backed securities 20 Broker-quoted Offered quotes 109.02 % - 109.02 % ( 109.02 %) Commercial mortgage-backed securities 17 Third-Party Valuation Offered quotes 74.66 % - 88.48 % ( 82.74 %) Corporates 602 Broker-quoted Offered quotes 79.16 % - 102.53 % ( 94.16 %) Corporates 826 Third-Party Valuation Offered quotes — % - 104.96 % ( 89.69 %) Corporates 12 Discounted Cash Flow Discount Rate 44.00 % - 100.00 % ( 77.02 %) Municipals 29 Third-Party Valuation Offered quotes 93.95 % - 93.95 % ( 93.95 %) Residential mortgage-backed securities 302 Broker-quoted Offered quotes 0.00 % - 91.04 % ( 86.38 %) Foreign Governments 16 Third-Party Valuation Offered quotes 99.78 % - 102.29 % ( 100.56 %) Preferred securities 1 Discounted Cash Flow Discount rate 100.00 % Equity securities 6 Broker Quoted Offered quotes $ 64.25 - $ 64.25 ($ 64.25 ) Equity securities 4 Discounted Cash Flow Discount rate 11.10 % - 11.10 % ( 11.10 %) Market Comparable Company Analysis EBITDA multiple 5.6 x - 5.6 x ( 5.6 x) Other long-term investments: Available-for-sale embedded derivative 23 Black Scholes model Market value of fund 100.00 % Secured borrowing receivable 10 Broker-quoted Offered quotes 100.00 % - 100.00 % ( 100.00 %) Credit Linked Note 15 Broker-quoted Offered quotes 96.23 % Investment in affiliate 23 Market Comparable Company Analysis EBITDA multiple 5 x - 5.5 x Total financial assets at fair value $ 8,169 Liabilities Derivatives: FIA/ IUL embedded derivatives, included in contractholder funds 3,115 Discounted cash flow Market value of option 0.00 % - 23.90 % ( 0.87 %) Swap rates 3.88 % - 4.73 % ( 4.31 %) Mortality multiplier 100.00 % - 100.00 % ( 100.00 %) Surrender rates 0.25 % - 70.00 % ( 6.57 %) Partial withdrawals 2.00 % - 29.41 % ( 2.73 %) Non-performance spread 0.48 % - 1.44 % ( 1.30 %) Option cost 0.07 % - 4.97 % ( 1.89 %) Total financial liabilities at fair value $ 3,115 118 Table of Contents Fair Value at Valuation Technique Unobservable Input(s) Range (Weighted average) December 31, 2021 December 31, 2021 Assets Asset-backed securities $ 3,844 Broker-quoted Offered quotes 52.56 % - 260.70 % ( 97.06 %) Asset-backed securities 115 Third-Party Valuation Offered quotes 93.02 % - 108.45 % ( 104.95 %) Commercial mortgage-backed securities 24 Broker-quoted Offered quotes 126.70 % - 126.70 % ( 126.70 %) Commercial mortgage-backed securities 11 Third-Party Valuation Offered quotes 97.91 % - 97.91 % ( 97.91 %) Corporates 380 Broker-quoted Offered quotes — % - 109.69 % ( 100.91 %) Corporates 741 Third-Party Evaluation Offered quotes 85.71 % - 119.57 % ( 107.72 %) Corporates 14 Discounted Cash Flow Discount Rate 44.00 % - 100.00 % ( 62.00 %) Municipals 43 Third-Party Evaluation Offered quotes 135.09 % - 135.09 % ( 135.09 %) Short-term 321 Broker-quoted Offered quotes 100.00 % - 100.00 % ( 100.00 %) Foreign governments 18 Third-Party Evaluation Offered quotes 107.23 % - 116.44 % ( 110.11 %) Preferred Securities 2 Income-Approach Yield 2.43 % Equity securities 3 Broker-quoted Offered Quotes $ 6.23 - $ 6.23 ($ 6.23 ) Equity securities 2 Black Scholes Model Risk Free Rate 1.00 % - 1.00 % ( 1.00 %) Strike Price $ 1.50 - $ 1.50 ($ 1.50 ) Volatility 81.00 % - 81.00 % ( 81.00 %) Dividend Yield 0.00 % - 0.00 % ( 0.00 %) Equity securities 4 Discounted Cash Flow Discount Rate 12.70 % - 12.70 % ( 12.70 %) Market Comparable Company Analysis EBITDA multiple 5.9 x - 5.9 x ( 5.9 x) Other long-term investments: Available-for-sale embedded derivative 34 Black Scholes model Market value of fund 100.00 % Credit Linked Note 23 Broker-quoted Offered quotes 100.00 % Investment in affiliate 21 Market Comparable Company Analysis EBITDA multiple 8 x - 8 x Total financial assets at fair value $ 5,600 Liabilities Derivatives: FIA/ IUL embedded derivatives, included in contractholder funds 3,883 Discounted cash flow Market value of option 0.00 % - 38.72 % ( 3.16 %) Swap rates 0.05 % - 1.94 % ( 1.00 %) Mortality multiplier 100.00 % - 100.00 % ( 100.00 %) Surrender rates 0.25 % - 70.00 % ( 6.26 %) Partial withdrawals 2.00 % - 23.26 % ( 2.72 %) Non-performance spread 0.43 % - 1.01 % ( 0.68 %) Option cost 0.07 % - 4.97 % ( 1.83 %) Total financial liabilities at fair value $ 3,883 119 Table of Contents 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, 2022 and December 31, 2021, respectively. This summary excludes any impact of amortization of VOBA, DAC and DSI. 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, 2022 (in millions) Balance at Beginning of Period Total Gains (Losses) Purchases Sales Settlements Net transfer In (Out) of Level 3 (a) Balance at End of Period Change in Unrealized Incl in OCI Included in Earnings Included in AOCI Assets Fixed maturity securities available-for-sale: Asset-backed securities $ 3,959 $ ( 6 ) $ ( 393 ) $ 3,269 $ ( 39 ) $ ( 541 ) $ 14 $ 6,263 $ ( 426 ) Commercial mortgage-backed securities 35 — ( 5 ) — — — 7 37 ( 4 ) Corporates 1,135 1 ( 187 ) 714 ( 20 ) ( 215 ) 12 1,440 ( 188 ) Hybrids — — — — — — — — — Municipals 43 — ( 14 ) — — — — 29 ( 13 ) Residential mortgage-backed securities — — — 316 — — ( 14 ) 302 — Foreign Governments 18 — ( 2 ) — — — — 16 ( 1 ) Short-term 321 — ( 1 ) 20 — — ( 340 ) — ( 1 ) Preferred securities 2 — ( 1 ) — — — — 1 ( 1 ) Equity securities 9 — — 2 ( 1 ) — — 10 — Other long-term assets: Available-for-sale embedded derivative 34 ( 11 ) — — — — — 23 — Credit linked note 23 ( 1 ) ( 1 ) — ( 2 ) ( 4 ) — 15 — Investment in affiliate 21 — 2 — — — — 23 2 Secured borrowing receivable $ — $ — $ — $ — $ — $ — $ 10 $ 10 $ — Total assets at Level 3 fair value $ 5,600 $ ( 17 ) $ ( 602 ) $ 4,321 $ ( 62 ) $ ( 760 ) $ ( 311 ) $ 8,169 $ ( 632 ) Liabilities Future policy benefits $ — $ — $ — $ — $ — $ — $ — $ — $ — FIA/ IUL embedded derivatives, included in contractholder funds 3,883 ( 1,382 ) — 768 — ( 154 ) — 3,115 — Total liabilities at Level 3 fair value $ 3,883 $ ( 1,382 ) $ — $ 768 $ — $ ( 154 ) $ — $ 3,115 $ — ( a) The net transfers out of Level 3 during the year ended December 31, 2022 were to Level 2. 120 Table of Contents Year ended December 31, 2021 Balance at Beginning of Period Total Gains (Losses) Purchases Sales Settlements Net transfer In (Out) of Level 3 (a) Balance at End of Period Change in Unrealized Incl in OCI Included in Earnings Included in AOCI Assets Fixed maturity securities available-for-sale: Asset-backed securities $ 1,350 $ ( 1 ) $ ( 8 ) $ 3,417 $ ( 97 ) $ ( 595 ) $ ( 107 ) $ 3,959 $ 4 Commercial mortgage-backed securities 26 — ( 3 ) 12 — — — 35 1 Corporates 1,289 8 ( 40 ) 161 ( 23 ) ( 247 ) ( 13 ) 1,135 23 Hybrids 4 — — — — ( 4 ) — — — Municipals 43 — — — — — — 43 7 Residential mortgage-backed securities 483 — ( 1 ) 14 — ( 102 ) ( 394 ) — 22 Foreign Governments 17 — 1 — — — — 18 2 Short-term — — 2 820 — ( 501 ) — 321 — Preferred securities 1 ( 1 ) 1 1 — — — 2 — Equity securities 4 2 — 3 — — — 9 — Other long-term assets: Available-for-sale embedded derivative 27 7 — — — — — 34 — Credit linked note 23 — — — — — — 23 — Investment in affiliate — — — 21 — — — 21 — Total assets at Level 3 fair value $ 3,267 $ 15 $ ( 48 ) $ 4,449 $ ( 120 ) $ ( 1,449 ) $ ( 514 ) $ 5,600 $ 59 Liabilities Future policy benefits (FSRC) $ 5 $ — $ — $ — $ ( 4 ) $ ( 1 ) $ — $ — $ — FIA embedded derivatives, included in contractholder funds 3,404 121 — 513 — ( 155 ) — 3,883 — Total liabilities at Level 3 fair value $ 3,409 $ 121 $ — $ 513 $ ( 4 ) $ ( 156 ) $ — $ 3,883 $ — ( a) The net transfers out of Level 3 during the year ended December 31, 2021 were to Level 2. 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. 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 In our F&G segment, the fair value of Investments in unconsolidated affiliates is determined using NAV as a practical expedient and are included in the NAV column in the table below. In our Title segment, Investments in unconsolidated affiliates are accounted for under the equity method of accounting. In our Title segment, Investments in unconsolidated affiliates were $ 187 million and $ 136 million as of December 31, 2022 and December 31, 2021, respectively. 121 Table of Contents Policy Loans (included within Other long-term investments) Fair values for policy loans are estimated from a discounted cash flow analysis, using interest rates currently being offered for loans with similar credit risk. Loans with similar characteristics are aggregated for purposes of the calculations. 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. Other Invested Assets (included within Other long-term investments) The fair value of the bank loan is estimated using a discounted cash flow method with the discount rate based on weighted average cost of capital ("WACC"). This yield-based approach is sourced from a third-party vendor and the WACC establishes a market participant discount rate by determining the hypothetical capital structure for the asset should it be underwritten as of each period end. Other invested assets are classified as Level 3 within the fair value hierarchy. Investment Contracts Investment contracts include deferred annuities (FIAs and fixed rate annuities), indexed IULs, funding agreements and pension risk transfer solutions ("PRT") and immediate annuity contracts without life contingencies. The FIA/ IUL embedded derivatives, included in contractholder funds, are excluded as they are carried at fair value. The fair value of the FIA, fixed rate annuity 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 Federal Home Loan Bank of Atlanta ("FHLB") common stock, Accounts receivable and Notes receivable are carried at cost, which approximates fair value. FHLB common stock is classified as Level 2 within the fair value hierarchy. Accounts receivable and Notes receivable are classified as Level 3 within the fair value hierarchy. Debt The fair value of debt is based on quoted market prices. The inputs used to measure the fair value of our outstanding debt are classified as Level 2 within the fair value hierarchy. The carrying value of the F&G Credit Facility at December 31, 2022 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. 122 Table of Contents The following tables provide the carrying value and estimated fair value of our financial instruments that are carried on the accompanying Consolidated Balance Sheets at amounts other than fair value, summarized according to the fair value hierarchy previously described. December 31, 2022 (in millions) Level 1 Level 2 Level 3 NAV Total Estimated Fair Value Carrying Amount Assets FHLB common stock $ — $ 99 $ — $ — $ 99 $ 99 Commercial mortgage loans — — 2,083 — 2,083 2,406 Residential mortgage loans — — 1,892 — 1,892 2,148 Investments in unconsolidated affiliates — — — 2,427 2,427 2,427 Policy loans — — 52 — 52 52 Other invested assets 93 — 16 — 109 109 Company-owned life insurance 35 — 328 — 363 363 Trade and notes receivables, net of allowance — — 467 — 467 467 Total $ 128 $ 99 $ 4,838 $ 2,427 $ 7,492 $ 8,071 Liabilities Investment contracts, included in contractholder funds $ — $ — $ 34,464 $ — $ 34,464 $ 38,412 Debt — 2,776 — — 2,776 3,238 Total $ — $ 2,776 $ 34,464 $ — $ 37,240 $ 41,650 December 31, 2021 (in millions) Level 1 Level 2 Level 3 NAV Total Estimated Fair Value Carrying Amount Assets FHLB common stock $ — $ 72 $ — $ — $ 72 $ 72 Commercial mortgage loans — — 2,265 — 2,265 2,168 Residential mortgage loans — — 1,549 — 1,549 1,581 Investments in unconsolidated affiliates — — — 2,350 2,350 2,350 Policy loans — — 39 — 39 39 Other invested assets — — 57 — 57 57 Company-owned life insurance — — 333 — 333 333 Trade and notes receivables, net of allowance — — 557 — 557 557 Total $ — $ 72 $ 4,800 $ 2,350 $ 7,222 $ 7,157 Liabilities Investment contracts, included in contractholder funds $ — $ — $ 27,448 $ — $ 27,448 $ 31,529 Debt — 3,218 — — 3,218 3,096 Total $ — $ 3,218 $ 27,448 $ — $ 30,666 $ 34,625 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. 123 Table of Contents Note E — Investments Our fixed maturity securities investments have been designated as available-for-sale and are carried at fair value, net of allowance for expected credit losses, with unrealized gains and losses included in AOCI, net of associated adjustments for DAC, VOBA, DSI, UREV, SOP 03-1 reserves, and deferred income taxes. Our preferred and equity securities investments are carried at fair value with unrealized gains and losses included in net earnings (loss). The Company’s consolidated investments are summarized as follows (in millions): December 31, 2022 Amortized Cost Allowance for Expected Credit Losses Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-sale securities Asset-backed securities $ 12,209 $ ( 8 ) $ 36 $ ( 770 ) $ 11,467 Commercial mortgage-backed securities 3,337 ( 1 ) 11 ( 284 ) 3,063 Corporates 17,396 ( 22 ) 32 ( 3,069 ) 14,337 Hybrids 806 — 9 ( 84 ) 731 Municipals 1,749 — 4 ( 293 ) 1,460 Residential mortgage-backed securities 1,638 ( 8 ) 6 ( 109 ) 1,527 U.S. Government 287 — — ( 16 ) 271 Foreign Governments 286 — — ( 47 ) 239 Total available-for-sale securities $ 37,708 $ ( 39 ) $ 98 $ ( 4,672 ) $ 33,095 December 31, 2021 Amortized Cost Allowance for Expected Credit Losses Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-sale securities Asset-backed securities $ 8,516 $ ( 3 ) $ 220 $ ( 38 ) $ 8,695 Commercial mortgage-backed/asset-backed securities 2,684 ( 2 ) 308 ( 11 ) 2,979 Corporates 15,822 — 830 ( 158 ) 16,494 Hybrids 838 — 74 — 912 Municipals 1,445 — 67 ( 11 ) 1,501 Residential mortgage-backed securities 731 ( 3 ) 7 ( 4 ) 731 U.S. Government 393 — 3 ( 2 ) 394 Foreign Governments 276 — 9 ( 1 ) 284 Total available-for-sale securities $ 30,705 $ ( 8 ) $ 1,518 $ ( 225 ) $ 31,990 Securities held on deposit with various state regulatory authorities had a fair value of $ 17,870 million and $ 22,343 million at December 31, 2022 and December 31, 2021, respectively. As of December 31, 2022, we held $ 27 million of investments that were non-income producing for a period greater than twelve months. As of December 31, 2021, we held no material investments that were non-income producing for a period greater than twelve months. As of December 31, 2022 and December 31, 2021, the Company's accrued interest receivable balance was $ 365 million and $ 253 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 the Company for general purposes. The collateral investments had a fair value of $ 3,387 million and $ 2,469 million at December 31, 2022 and December 31, 2021, respectively. 124 Table of Contents The amortized cost and fair value of fixed maturity securities by contractual maturities, as applicable, are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. December 31, 2022 December 31, 2021 (in millions) (in millions) Amortized Cost Fair Value Amortized Cost Fair Value Corporates, Non-structured Hybrids, Municipal and Government securities: Due in one year or less $ 536 $ 527 $ 426 $ 431 Due after one year through five years 3,288 3,089 2,998 3,051 Due after five years through ten years 2,171 1,939 2,389 2,458 Due after ten years 14,503 11,457 12,930 13,608 20,498 17,012 18,743 19,548 Other securities, which provide for periodic payments: Asset-backed securities 12,209 11,467 8,516 8,695 Commercial mortgage-backed securities 3,337 3,063 2,684 2,979 Structured hybrids 26 26 31 37 Residential mortgage-backed securities 1,638 1,527 731 731 17,210 16,083 11,962 12,442 Total fixed maturity available-for-sale securities $ 37,708 $ 33,095 $ 30,705 $ 31,990 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 nonperforming 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 Earnings, 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 is necessary: • We believe amounts related to securities have become uncollectible; or • 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. 125 Table of Contents 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 accompanying Consolidated Statements of Earnings. 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 (generally based on proximity to expected credit loss), 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 accompanying Consolidated Statements of Earnings. The remainder of unrealized loss is held in AOCI. As of December 31, 2022 and 2021, our allowance for expected credit losses for AFS securities was $ 39 million and $ 8 million, respectively. 126 Table of Contents The fair value and gross unrealized losses of available-for-sale 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 were as follows (dollars in millions): December 31, 2022 Less than 12 months 12 months or longer Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Available-for-sale securities Asset-backed securities $ 7,001 $ ( 410 ) $ 3,727 $ ( 360 ) $ 10,728 $ ( 770 ) Commercial mortgage-backed securities 2,079 ( 169 ) 475 ( 116 ) 2,554 ( 285 ) Corporates 9,913 ( 1,735 ) 3,523 ( 1,330 ) 13,436 ( 3,065 ) Hybrids 628 ( 83 ) 3 ( 1 ) 631 ( 84 ) Municipals 998 ( 180 ) 352 ( 113 ) 1,350 ( 293 ) Residential mortgage-backed securities 992 ( 51 ) 184 ( 22 ) 1,176 ( 73 ) U.S. Government 130 ( 7 ) 140 ( 8 ) 270 ( 15 ) Foreign Government 119 ( 32 ) 59 ( 14 ) 178 ( 46 ) Total available-for-sale securities $ 21,860 $ ( 2,667 ) $ 8,463 $ ( 1,964 ) $ 30,323 $ ( 4,631 ) Total number of available-for-sale securities in an unrealized loss position less than twelve months 3,114 Total number of available-for-sale securities in an unrealized loss position twelve months or longer 1,296 Total number of available-for-sale securities in an unrealized loss position 4,410 December 31, 2021 Less than 12 months 12 months or longer Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Available-for-sale securities Asset-backed securities $ 4,410 $ ( 31 ) $ 146 $ ( 7 ) $ 4,556 $ ( 38 ) Commercial mortgage-backed securities 603 ( 11 ) 1 — 604 ( 11 ) Corporates 5,391 $ ( 132 ) $ 394 $ ( 26 ) $ 5,785 $ ( 158 ) Hybrids 3 — — — 3 — Municipals 410 ( 5 ) 85 ( 6 ) 495 ( 11 ) Residential mortgage-backed securities 325 ( 3 ) 11 ( 1 ) 336 ( 4 ) U.S. Government 219 ( 2 ) 4 — 223 ( 2 ) Foreign Government 82 ( 1 ) 5 — 87 ( 1 ) Total available-for-sale securities $ 11,443 $ ( 185 ) $ 646 $ ( 40 ) $ 12,089 $ ( 225 ) Total number of available-for-sale securities in an unrealized loss position less than twelve months 2,056 Total number of available-for-sale securities in an unrealized loss position twelve months or longer 68 Total number of available-for-sale securities in an unrealized loss position 2,124 We determined the increase in unrealized losses as of December 31, 2022 was caused by higher treasury rates as well as wider spreads. This is in part due to the Federal Reserve's action to increase rates in efforts to combat inflation. For securities in an unrealized loss position as of December 31, 2022, our allowance for expected credit loss was $ 39 million. We believe that the unrealized loss position for which we have not recorded an allowance for expected credit loss as of December 31, 2022 was primarily attributable to interest rate increases, near-term illiquidity, and other macroeconomic uncertainties as opposed to issuer specific credit concerns. Mortgage Loans Our mortgage loans are collateralized by commercial and residential properties. 127 Table of Contents Commercial Mortgage Loans Commercial mortgage loans ("CMLs") represented approximately 6 % of our total investments at December 31, 2022 and December 31, 2021. 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, 2022 December 31, 2021 Amortized Cost % of Total Amortized Cost % of Total Property Type: Hotel $ 18 1 % $ 19 1 % Industrial 520 22 % 497 23 % Mixed Use 12 1 % 13 1 % Multifamily 1,013 42 % 894 41 % Office 330 14 % 343 16 % Retail 105 4 % 121 6 % Student Housing 83 3 % 83 4 % Other 335 13 % 204 8 % Total commercial mortgage loans, gross of valuation allowance $ 2,416 100 % $ 2,174 100 % Allowance for expected credit loss ( 10 ) ( 6 ) Total commercial mortgage loans, net of valuation allowance $ 2,406 $ 2,168 U.S. Region: East North Central $ 151 6 % $ 137 6 % East South Central 76 3 % 79 4 % Middle Atlantic 326 13 % 293 13 % Mountain 355 15 % 236 11 % New England 158 7 % 149 7 % Pacific 708 28 % 649 30 % South Atlantic 521 22 % 459 21 % West North Central 4 1 % 12 1 % West South Central 117 5 % 160 7 % Total commercial mortgage loans, gross of valuation allowance $ 2,416 100 % $ 2,174 100 % Allowance for expected credit loss ( 10 ) ( 6 ) Total commercial mortgage loans, net of valuation allowance $ 2,406 $ 2,168 LTV and debt service coverage ("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. 128 Table of Contents The following tables presents 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 (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, 2022 LTV Ratios: Less than 50.00% $ 511 $ 4 $ 11 $ 526 22 % $ 490 24 % 50.00% to 59.99% 706 — — 706 29 % 615 30 % 60.00% to 74.99% 1,154 3 — 1,157 48 % 955 45 % 75.00% to 84.99% — — 18 18 1 % 14 1 % Commercial mortgage loans (a) $ 2,371 $ 7 $ 29 $ 2,407 100 % $ 2,074 100 % December 31, 2021 LTV Ratios: Less than 50.00% $ 626 $ 33 $ 9 $ 668 31 % $ 745 33 % 50.00% to 59.99% 470 — — 470 22 % 481 21 % 60.00% to 74.99% 1,036 — — 1,036 47 % 1,039 46 % Commercial mortgage loans $ 2,132 $ 33 $ 9 $ 2,174 100 % $ 2,265 100 % (a) Excludes loans under development with an amortized cost and estimated fair value of $ 9 million. We recognize mortgage loans as delinquent when payments on the loan are greater than 30 days past due. At December 31, 2022, we had one CML that was delinquent in principal or interest payments as shown in the risk rating exposure table below. At December 31, 2021, we had no CMLs that were delinquent in principal or interest payments. Residential Mortgage Loans Residential mortgage loans ("RMLs") represented approximately 5 % and 4 % of our total investments at December 31, 2022 and December 31, 2021, respectively. Our residential mortgage loans 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, 2022 U.S. State: Amortized Cost % of Total Florida $ 324 15 % Texas 215 10 % New Jersey 172 8 % Pennsylvania 153 7 % California 139 6 % New York 138 6 % Georgia 125 6 % All Other States (1) 914 42 % Total mortgage loans $ 2,180 100 % (1) The individual concentration of each state is equal to or less than to 5%. 129 Table of Contents December 31, 2021 U.S. State: Amortized Cost % of Total Florida $ 234 15 % Texas 170 10 % New Jersey 153 10 % All Other States (1) 1,049 65 % Total residential mortgage loans $ 1,606 100 % (1) The individual concentration of each state is less than 9%. RMLs have a primary credit quality indicator of either a performing or nonperforming loan. We define non-performing RMLs as those that are 90 or more days past due or in nonaccrual status, which is assessed monthly. The credit quality of RMLs was as follows (dollars in millions): December 31, 2022 December 31, 2021 Performance indicators: Amortized Cost % of Total Amortized Cost % of Total Performing $ 2,118 97 % $ 1,533 95 % Non-performing 62 3 % 73 5 % Total residential mortgage loans, gross of valuation allowance $ 2,180 100 % $ 1,606 100 % Allowance for expected loan loss ( 32 ) — % ( 25 ) — % Total residential mortgage loans, net of valuation allowance $ 2,148 100 % $ 1,581 100 % Loans segregated by risk rating exposure were as follows, gross of valuation allowances (in millions): December 31, 2022 Amortized Cost by Origination Year 2022 2021 2020 2019 2018 Prior Total Residential mortgages Current (less than 30 days past due) $ 766 $ 884 $ 214 $ 185 $ 23 $ 33 $ 2,105 30-89 days past due 2 7 — 4 — — 13 90 days or more past due 3 9 15 34 1 — 62 Total residential mortgages $ 771 $ 900 $ 229 $ 223 $ 24 $ 33 $ 2,180 Commercial mortgages Current (less than 30 days past due) $ 350 $ 1,300 $ 488 $ — $ — $ 269 $ 2,407 30-89 days past due — — — — — — — 90 days or more past due — — — — — 9 9 Total commercial mortgages $ 350 $ 1,300 $ 488 $ — $ — $ 278 $ 2,416 December 31, 2021 Amortized Cost by Origination Year 2021 2020 2019 2018 2017 Prior Total Residential mortgages Current (less than 30 days past due) $ 795 $ 293 $ 323 $ 50 $ 36 $ 21 $ 1,518 30-89 days past due 5 4 6 1 — — 16 90 days or more past due 1 23 46 2 — — 72 Total residential mortgages $ 801 $ 320 $ 375 $ 53 $ 36 $ 21 $ 1,606 Commercial mortgages Current (less than 30 days past due) $ 1301 $ 543 $ — $ 6 $ — $ 324 $ 2,174 30-89 days past due — — — — — — — 90 days or more past due — — — — — — — Total commercial mortgages $ 1,301 $ 543 $ — $ 6 $ — $ 324 $ 2,174 130 Table of Contents December 31, 2022 Amortized Cost by Origination Year 2022 2021 2020 2019 2018 Prior Total Commercial mortgages LTV Less than 50.00% $ 70 $ 120 $ 207 $ — $ — $ 129 $ 526 50.00% to 59.99% 149 268 158 — — 131 706 60.00% to 74.99% 113 912 123 — — 9 1,157 75.00% to 84.99% 9 — — — — 9 18 Total commercial mortgages (a) $ 341 $ 1300 $ 488 $ — $ — $ 278 $ 2,407 Commercial mortgages DSCR Greater than 1.25x $ 329 $ 1,300 $ 488 $ — $ — $ 254 $ 2,371 1.00x - 1.25x 3 — — — — 4 7 Less than 1.00x 9 — — — — 20 29 Total commercial mortgages (a) $ 341 $ 1300 $ 488 $ — $ — $ 278 $ 2,407 (a) Excludes loans under development with an amortized cost and estimated fair value of $ 9 million. December 31, 2021 Amortized Cost by Origination Year 2021 2020 2019 2018 2017 Prior Total Commercial mortgages LTV Less than 50.00% $ 120 $ 229 $ — $ 6 $ — $ 313 $ 668 50.00% to 59.99% 267 192 — — — 11 470 60.00% to 74.99% 914 122 — — — — 1,036 Total commercial mortgages $ 1,301 $ 543 $ — $ 6 $ — $ 324 $ 2,174 Commercial mortgages DSCR Greater than 1.25x $ 1,301 $ 543 $ — $ 4 $ — $ 284 $ 2,132 1.00x - 1.25x — — — 2 — 31 33 Less than 1.00x — — — — — 9 9 Total commercial mortgages $ 1,301 $ 543 $ — $ 6 $ — $ 324 $ 2,174 Non-accrual loans by amortized cost were as follows (in millions): Amortized cost of loans on non-accrual December 31, 2022 December 31, 2021 Residential mortgage $ 64 $ 72 Commercial mortgage 9 — Total non-accrual mortgages $ 73 $ 72 Immaterial interest income was recognized on non-accrual financing receivables for the years ended December 31, 2022 and December 31, 2021. It is our policy to cease to accrue interest on loans that are 90 days or more delinquent. 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, 2022 and December 31, 2021, we had $ 71 million and $ 72 million, respectively, of mortgage loans that were over 90 days past due, of which $ 38 million and $ 39 million was in the process of foreclosure as of December 31, 2022 and December 31, 2021, respectively. 131 Table of Contents Allowance for Expected Credit Loss We estimate expected credit losses for our CML and RML 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 accompanying Consolidated Statements of Earnings. The allowances for our mortgage loan portfolio is summarized as follows (in millions): Year ended December 31, 2022 Year ended December 31, 2021 Residential Mortgage Commercial Mortgage Total Residential Mortgage Commercial Mortgage Total Beginning Balance $ 25 $ 6 $ 31 $ 37 $ 2 $ 39 Provision for loan losses 7 4 11 ( 12 ) 4 ( 8 ) Ending Balance $ 32 $ 10 $ 42 $ 25 $ 6 $ 31 Seven months ended December 31, 2020 Residential Mortgage Commercial Mortgage Total Beginning Balance — — — Provision for loan losses 30 2 32 For initial credit losses on purchased loans accounted for as PCD financial assets 7 — 7 Ending Balance $ 37 $ 2 $ 39 An allowance for expected credit loss is not measured on accrued interest income for CMLs 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 RMLs and were immaterial as of December 31, 2022 and December 31, 2021. Interest and Investment Income The major sources of Interest and investment income reported on the accompanying Consolidated Statements of Earnings were as follows (in millions): Year ended December 31, 2022 December 31, 2021 December 31, 2020 Fixed maturity securities, available-for-sale $ 1,489 $ 1,267 $ 708 Equity securities 31 23 19 Preferred securities 67 63 59 Mortgage loans 186 131 50 Invested cash and short-term investments 61 7 8 Limited partnerships 110 589 76 Tax deferred property exchange income 103 16 33 Other investments 41 32 25 Gross investment income 2,088 2,128 978 Investment expense ( 197 ) ( 167 ) ( 78 ) Interest and investment income $ 1,891 $ 1,961 $ 900 The Company’s 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 $ 109 million, $ 53 million and $ 21 million for the years ended December 31, 2022 and 2021 and for the period from June 1 to December 31, 2020. 132 Table of Contents Recognized Gains and Losses, net Details underlying Recognized gains and losses, net reported on the accompanying Consolidated Statements of Earnings were as follows (in millions): Year ended December 31, 2022 December 31, 2021 December 31, 2020 Net realized (losses) gains on fixed maturity available-for-sale securities $ ( 253 ) $ 111 $ 102 Net realized/unrealized (losses) gains on equity securities (2) ( 386 ) ( 434 ) 241 Net realized/unrealized (losses) gains on preferred securities (3) ( 230 ) ( 14 ) 15 Realized (losses) gains on other invested assets ( 68 ) 8 ( 25 ) Change in allowance for expected credit losses ( 41 ) 8 ( 37 ) Derivatives and embedded derivatives: Realized (losses) gains on certain derivative instruments ( 164 ) 456 76 Unrealized (losses) gains on certain derivative instruments ( 693 ) 159 161 Change in fair value of reinsurance related embedded derivatives (1) 352 34 ( 53 ) Change in fair value of other derivatives and embedded derivatives ( 10 ) 6 8 Realized (losses) gains on derivatives and embedded derivatives ( 515 ) 655 192 Recognized gains and losses, net $ ( 1,493 ) $ 334 $ 488 (1) Change in fair value of reinsurance related embedded derivatives is due to activity related to the reinsurance treaties with Kubera (novated from Kubera to Somerset effective October 31, 2021) and Aspida Re. (2) Includes net valuation (losses) gains of $( 387 ) million, $( 436 ) million and $ 248 million for the years ended December 31, 2022, 2021, and 2020 respectively. (3) Includes net valuation losses of $ 198 million, $ 14 million, and $ 40 million for the years ended December 31, 2022, 2021 and 2020, 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): Year ended December 31, 2022 December 31, 2021 December 31, 2020 Proceeds $ 3,264 $ 4,749 $ 1,946 Gross gains 14 158 116 Gross losses ( 252 ) ( 49 ) ( 12 ) Unconsolidated Variable Interest Entities The Company owns 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 the Company participates in the benefits from VIEs in which it invests, but does not consolidate, the substantive power to make the key economic decisions for each respective VIE resides with entities not under common control with the Company. It is for this reason that the Company is 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 that 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 exposure to loss 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 our fixed maturity securities, in addition to any required unfunded commitments (also refer to Note H Commitments and Contingencies ). 133 Table of Contents The following table summarizes the carrying value and the maximum loss exposure of our unconsolidated VIEs: December 31, 2022 December 31, 2021 Carrying Value Maximum Loss Exposure Carrying Value Maximum Loss Exposure Investments in unconsolidated affiliates $ 2,427 $ 4,030 $ 2,350 $ 3,496 Fixed maturity securities 15,680 17,404 12,382 12,802 Total unconsolidated VIE investments $ 18,107 $ 21,434 $ 14,732 $ 16,298 Concentrations Our underlying investment concentrations that exceed 10% of shareholders equity are as follows (in millions): December 31, 2022 Blackstone Wave Asset Holdco (1) $ 741 __________________ (1) 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. Investment in Cannae Holdings, Inc. ("Cannae") Included in equity securities as of December 31, 2021 were 5,775,598 shares of Cannae common stock (NYSE: CNNE). The fair value of this investment based on quoted market prices was $ 203 million as of December 31, 2021. During the year ended December 31, 2022, we sold all 5,775,598 shares of CNNE common stock back to Cannae for approximately $ 109 million in the aggregate. As of December 31, 2022, we held no shares of CNNE common stock. 134 Table of Contents Note F — Derivative Financial Instruments The carrying amounts of derivative instruments, including derivative instruments embedded in FIA and IUL contracts, and reinsurance is as follows (in millions): December 31, 2022 December 31, 2021 Assets: Derivative investments: Call options $ 244 $ 816 Other long-term investments: Other embedded derivatives 23 33 Prepaid expenses and other assets: Reinsurance related embedded derivatives 279 — $ 546 $ 849 Liabilities: Contractholder funds: FIA/ IUL embedded derivatives $ 3,115 $ 3,883 Accounts payable and accrued liabilities: Reinsurance related embedded derivatives — 73 $ 3,115 $ 3,956 The change in fair value of derivative instruments included within Recognized gains and losses, net, in the accompanying Consolidated Statements of Earnings is as follows (in millions): Year Ended Seven Months Ended December 31, 2022 December 31, 2021 December 31, 2020 Net investment gains (losses): Call options $ ( 862 ) $ 597 $ 229 Futures contracts ( 7 ) 8 15 Foreign currency forwards 12 10 ( 7 ) Other derivatives and embedded derivatives ( 10 ) 5 8 Reinsurance related embedded derivatives 352 34 ( 53 ) Total net investment gains $ ( 515 ) $ 654 $ 192 Benefits and other changes in policy reserves: FIA/ IUL embedded derivatives increase (decrease) $ ( 768 ) $ 479 $ 552 Additional Disclosures FIA/ IUL Embedded Derivative and Call Options and Futures We have FIA 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, primarily the S&P 500 Index. This feature represents an embedded derivative under GAAP. The FIA/IUL embedded derivatives are valued at fair value and included in the liability for contractholder funds in the accompanying 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 Earnings. See a description of the fair value methodology used in Note D Fair Value of Financial Instruments . We purchase derivatives consisting of a combination of call options and futures contracts (specifically for FIA contracts) on the applicable market indices to fund the index credits due to FIA/ IUL contractholders. The call options are one , two , three , and five 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 call options to fund the next index credit. We manage the cost of these purchases through the terms of our FIA/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 135 Table of Contents the fair value of the call options and futures contracts is generally designed to offset the portion of the change in the fair value of the FIA/IUL embedded derivatives related to index performance through the current credit period. The call 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 accompanying Consolidated Statements of Earnings. The change in fair value of the call 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 FIA/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. Credit Risk We are exposed to credit loss in the event of non-performance by our counterparties on the call options and reflect assumptions regarding this non-performance risk in the fair value of the call options. 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. Information regarding our exposure to credit loss on the call options we hold is presented in the following table (in millions): December 31, 2022 Counterparty Credit Rating (Fitch/Moody's/S&P) (1) Notional Amount Fair Value Collateral Net Credit Risk Merrill Lynch AA/*/A+ $ 3,563 $ 23 $ — $ 23 Morgan Stanley */Aa3/A+ 1,699 14 19 — Barclay's Bank A+/A1/A 6,049 65 59 6 Canadian Imperial Bank of Commerce AA/Aa2/A+ 5,169 68 64 4 Wells Fargo A+/A1/BBB+ 1,361 17 17 — Goldman Sachs A/A2/BBB+ 1,133 9 10 — Credit Suisse BBB+/A3/A- 1,039 5 5 — Truist A+/A2/A 2,489 35 36 — Citibank A+/Aa3/A+ 795 8 9 — Total $ 23,297 $ 244 $ 219 $ 33 December 31, 2021 Counterparty Credit Rating (Fitch/Moody's/S&P)(1) Notional Amount Fair Value Collateral Net Credit Risk Merrill Lynch AA/*/A+ $ 3,307 $ 128 $ 86 $ 42 Morgan Stanley */Aa3/A+ 2,184 86 92 — Barclay's Bank A+/A1/A 5,197 231 233 — Canadian Imperial Bank of Commerce AA/Aa2/A+ 2,936 147 151 — Wells Fargo A+/A1/BBB+ 2,445 89 90 — Goldman Sachs A/A2/BBB+ 307 10 10 — Credit Suisse A/A1/A+ 1,485 74 75 — Truist A+/A2/A 1,543 51 53 — Total $ 19,404 $ 816 $ 790 $ 42 (1) An * represents credit ratings that were not available. 136 Table of Contents 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 option 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 option contracts. Our current rating does not allow any counterparty the right to terminate ISDA agreements. In certain transactions, both we 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 Merrill Lynch, this threshold is set to zero . As of December 31, 2022 and December 31, 2021, counterparties posted $ 219 million and $ 790 million, respectively, of collateral, of which $ 178 million and $ 576 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 call options failed completely to perform according to the terms of the contracts was $ 33 million at December 31, 2022 and $ 42 million at December 31, 2021. We are required to pay counterparties the effective federal funds rate each day for cash collateral posted to F&G for daily mark to market margin changes. We reinvest derivative cash collateral to reduce the interest cost. Cash collateral is invested in overnight investment sweep products, which are included in cash and cash equivalents in the accompanying Consolidated Balance Sheets. We held 409 and 329 futures contracts at December 31, 2022 and December 31, 2021, 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 accompanying Consolidated Balance Sheets. The amount of cash collateral held by the counterparties for such contracts was $ 3 million and $ 3 million at December 31, 2022 and December 31, 2021, respectively. Reinsurance Related Embedded Derivatives F&G entered into a reinsurance agreement with Kubera, effective December 31, 2018, to cede certain multi-year guaranteed annuity (“MYGA”) and deferred annuity business on a coinsurance funds withheld basis, net of applicable existing reinsurance. Effective October 31, 2021, this agreement was novated from Kubera to Somerset, a certified third party reinsurer. Additionally, F&G entered into a reinsurance agreement with Aspida Re effective January 1, 2021, and amended in August 2021 and September 2022, to cede a quota share of certain deferred annuity business on a funds withheld basis. Fair value movements in the funds withheld balances associated with these arrangements creates an obligation for F&G to pay Somerset and Aspida Re at a later date, which results in embedded derivatives. These embedded derivatives are considered total return swaps with contractual returns that are attributable to the assets and liabilities associated with the reinsurance arrangements. The fair value of the total return swap is based on the change in fair value of the underlying assets held in the funds withheld portfolio. Investment results for the assets that support the coinsurance with funds withheld reinsurance arrangements, including gains and losses from sales, were passed directly to the reinsurers pursuant to contractual terms of the reinsurance arrangements. The reinsurance related 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 Earnings. 137 Table of Contents Note G — Notes Payable Notes payable consists of the following: December 31, 2022 December 31, 2021 (In millions) 4.50 % Notes, net of discount $ 445 $ 444 5.50 % Notes, net of discount — 400 3.40 % Notes, net of discount 644 643 2.45 % Notes, net of discount 594 593 3.20 % Notes, net of discount 444 443 Revolving Credit Facility ( 3 ) ( 4 ) F&G Credit Agreement 547 — 5.50 % F&G Notes 567 577 $ 3,238 $ 3,096 On November 22, 2022, F&G entered into the F&G Credit Agreement pursuant to which the Lenders have made available the F&G Credit Facility in an aggregate principal amount of $ 550 million to be used for working capital and general corporate purposes. The F&G Credit Agreement matures the earlier to occur of November 22, 2025 or 91 days prior to May 1, 2025, the stated maturity date of the 5.50 % F&G Notes, unless the principal amount of the 5.50 % F&G Notes is $ 150,000,000 or less at such time, the 5.50 % F&G Notes have been redeemed or defeased in full, and any refinancing Indebtedness incurred in connection therewith matures at least 91 days after the date that is 3 years from the Effective Date or certain other conditions are met. 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. As of December 31, 2022, the revolving credit facility was fully drawn with $ 550 million outstanding, offset by approximately $ 3 million of unamortized debt issuance costs. A net partial paydown of $ 35 million was made on January 6, 2023 and, on February 21, 2023, F&G entered into the Amended F&G Credit Agreement with the Lenders and the Administrative Agent, swing line lender and issuing bank. The Amended F&G Credit Agreement increased the aggregate principal amount of commitments under the F&G Credit Facility by $ 115 million to $ 665 million. On September 17, 2021, we completed our underwritten public offering of $ 450 million aggregate principal amount of our 3.20 % Notes due 2051, pursuant to our registration statement on Form S-3 ASR (File No. 333-239002) and the related prospectus supplement. The net proceeds from the registered offering of the 3.20 % Notes were approximately $ 443 million, after deducting underwriting discounts, commissions and offering expenses. We plan to use the net proceeds from the offering for general corporate purposes. On October 29, 2020, we entered into the Fifth Restated Credit Agreement for our Amended Revolving Credit Facility with Bank of America, N.A., as administrative agent and the other agents party thereto. Among other changes, the Fifth Restated Credit Agreement amends the Fourth Restated Credit Agreement to extend the maturity date from April 27, 2022 to October 29, 2025. The material terms of the Fourth Restated Credit Agreement are set forth in our Annual Report for the year ended December 31, 2019. As of December 31, 2021, there was no principal outstanding, $ 3 million of unamortized debt issuance costs, and $ 800 million of available borrowing capacity under the Revolving Credit Facility. On September 15, 2020, we completed our underwritten public offering of $ 600 million aggregate principal amount of our 2.45 % Notes due March 15, 2031 (the " 2.45 % Notes") pursuant to an effective registration statement filed with the Securities and Exchange Commission ("SEC"). The net proceeds from the registered offering of the 2.45 % Notes were approximately $ 593 million, after deducting underwriting discounts and commissions and offering expenses. We used the net proceeds from the offering (i) to repay the remaining $ 260 million outstanding indebtedness under our prior term loan credit agreement dated April 22, 2020, among us, as borrower, various lenders, and Bank of American N.A., as administrative agent (the "Term Loan"), which provided for an aggregate principal borrowing of $ 1.0 billion that we entered into to fund a portion of the acquisition of F&G and (ii) for general corporate purposes. 138 Table of Contents On June 12, 2020, we completed our underwritten public offering of $ 650 million aggregate principal amount of the 3.40 % Notes due 2030 (the “ 3.40 % Notes”) pursuant to an effective registration statement filed with the SEC. The net proceeds from the registered offering of the 3.40 % Notes were approximately $ 642 million, after deducting underwriting discounts, and commissions and offering expenses. We used the net proceeds from the offering (i) to repay $ 640 million of the then outstanding principal amount under the Term Loan, and (ii) for general corporate purposes. On June 1, 2020, as a result of the F&G acquisition, we assumed $ 550 million aggregate principal amount of 5.50 % senior notes due 2025 (the " 5.50 % F&G Notes"), originally issued on April 20, 2018 at 99.5 % of face value for proceeds of $ 547 million. On August 13, 2018, we completed an offering of $ 450 million in aggregate principal amount of 4.50 % notes due August 2028 (the " 4.50 % Notes"), pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. The 4.50 % Notes were priced at 99.252 % of par to yield 4.594 % annual interest. We pay interest on the 4.50 % Notes semi-annually on the 15th of February and August, beginning February 15, 2019. The 4.50 % Notes contain customary covenants and events of default for investment grade public debt, which primarily relate to failure to make principal or interest payments. On May 16, 2019, we completed an offering to exchange the 4.50 % Notes for substantially identical notes registered pursuant to Rule 424 under the Securities Act of 1933 (the " 4.50 % Notes Exchange"). There were no material changes to the terms of the 4.50 % Notes as a result of the 4.50 % Notes Exchange and all holders of the 4.50 % Notes accepted the offer to exchange. On September 1, 2022, we repaid the remaining $ 400 million in outstanding principal amount of our 5.50 % Senior Notes due September 2022. Gross principal maturities of notes payable at December 31, 2022 are as follows (in millions): 2023 $ 550 2024 — 2025 550 2026 — 2027 — Thereafter 2,150 $ 3,250 Note H — Commitments and Contingencies 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. With respect to our title insurance operations, this customary litigation includes but is not limited to a wide variety of cases arising out of or related to title and escrow claims, for which we make provisions through our loss reserves. See Note C Summary of Reserve for Title Claim Losses for further discussion. Additionally, 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 $ 12 million a s of December 31, 2022 and 2021 . None of the amounts we have currently recorded are considered to be material to our financial condition 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. In August 2020, a lawsuit styled, In the Matter of FGL Holdings, was filed in the Grand Court of the Cayman Islands related to FNF's acquisition of F&G where dissenting shareholders, Kingfishers LP, Kingstown 1740 Fund LP, Kingstown Partners II LP, Kingstown Partners Master Ltd., and Ktown LP, asserted statutory appraisal rights relative to their ownership of 12,000,000 shares of F&G stock. They sought a judicial determination of the fair value of their shares of F&G stock as of the date of valuation under the law of the Cayman Islands, together with interest. On September 5, 2022 the Grand Court of the 139 Table of Contents Cayman Islands decided in favor of F&G. Kingstown Capital Management LP failed to appeal, and its appeal period expired on October 20, 2022. We are attempting to collect reimbursement of our expenses in this lawsuit. 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. Also, regulators and courts have been dealing with issues arising from foreclosures and related processes and documentation. Various governmental entities are studying the title insurance product, market, pricing, and business practices, and potential regulatory and legislative changes, which may materially affect our business and operations. 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 financial condition. Escrow Balances In conducting our operations, we routinely hold customers’ assets in escrow, pending completion of real estate transactions, and are respon sible for the proper disposition of these balances for our customers. Certain of these amounts are maintained in segregated bank accounts and have not been included in the accompanying Consolidated Balance Sheets, consistent with GAAP and industry practice. These balances amounted to $ 18.9 billion and $ 30.5 billion at December 31, 2022 and 2021, respectively. As a result of holding these customers’ assets in escrow, we have ongoing programs for realizing economic benefits during the year through favorable borrowing and vendor arrangements with various banks. There were no investments or loans outstanding as of December 31, 2022 and 2021 related to these arrangements. FNF Commitments As of December 31, 2022, we had a commitment to purchase TitlePoint for $ 225 million. On January 1, 2023, we completed our previously announced acquisition of TitlePoint for $ 225 million in cash, subject to a customary working capital adjustment. For further information associated with the purchase of TitlePoint, refer to Note A Business and Summary of Significant Accounting Policies. F&G Commitments In our F&G segment, we have unfunded investment commitments as of December 31, 2022 and 2021 based upon the timing of when investments are executed compared to when the actual investments are funded, as some investments require that funding occur over a period of months or years. A summary of unfunded commitments by invested asset class is included below: December 31, 2022 December 31, 2021 Asset Type (In millions) Unconsolidated VIEs: Limited partnerships $ 1,603 $ 1,146 Whole loans 419 589 Fixed maturity securities, ABS 201 306 Other fixed maturity securities, AFS 48 119 Other assets 120 156 Commercial mortgage loans 36 44 Residential mortgage loans 2 — Committed amounts included in liabilities 1 $ — Total $ 2,430 $ 2,360 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. 140 Table of Contents As discussed in Note O F&G 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, 2022 and December 31, 2021, the amount funded under the NPA was insignificant. Note I — Dividends On February 16, 2023, our Board of Directors declared cash dividends of $ 0.45 per share, payable on March 31, 2023, to FNF common shareholders of record as of March 17, 2023. 141 Table of Contents Note J — Segment Information Summarized financial information concerning our reportable segments is shown in the following tables. On June 1, 2020, we completed our acquisition of F&G. As a result, the year ended December 31, 2020 includes seven months of activity from our F&G segment. As of and for the year ended December 31, 2022: Title F&G Corporate and Other Total (In millions) Title premiums $ 6,834 $ — $ — $ 6,834 Other revenues 2,502 1,695 127 4,324 Revenues from external customers 9,336 1,695 127 11,158 Interest and investment income, including recognized gains and losses ( 230 ) 645 ( 17 ) 398 Total revenues 9,106 2,340 110 11,556 Depreciation and amortization 142 329 25 496 Interest expense — 29 86 115 Earnings (loss) from continuing operations before income taxes and equity in earnings of unconsolidated affiliates 1,090 598 ( 153 ) 1,535 Income tax expense (benefit) 298 117 ( 17 ) 398 Earnings (loss) before equity in earnings (loss) of unconsolidated affiliates 792 481 ( 136 ) 1,137 Equity in earnings of unconsolidated affiliates 15 — — 15 Net earnings (loss) from continuing operations $ 807 $ 481 $ ( 136 ) $ 1,152 Assets $ 8,295 $ 55,077 $ 2,217 $ 65,589 Goodwill 2,620 1,756 266 4,642 As of and for the year ended December 31, 2021: Title F&G Corporate and Other Total (In millions) Title premiums $ 8,553 $ — $ — $ 8,553 Other revenues 3,228 1,395 172 4,795 Revenues from external customers 11,781 1,395 172 13,348 Interest and investment income, including recognized gains and losses ( 284 ) 2,567 12 2,295 Total revenues 11,497 3,962 184 15,643 Depreciation and amortization 138 484 23 645 Interest expense — 29 85 114 Earnings (loss) before income taxes and equity in earnings of unconsolidated affiliates 2,136 1,077 ( 130 ) 3,083 Income tax expense (benefit) 511 220 ( 18 ) 713 Earnings (loss) before equity in earnings of unconsolidated affiliates 1,625 857 ( 112 ) 2,370 Equity in earnings of unconsolidated affiliates 58 — 6 64 Net earnings (loss) $ 1,683 $ 857 $ ( 106 ) $ 2,434 Assets $ 9,663 $ 48,730 $ 2,297 $ 60,690 Goodwill 2,517 1,756 266 4,539 142 Table of Contents As of and for the year ended December 31, 2020: Title F&G Corporate and Other Total (In millions) Title premiums $ 6,298 $ — $ — $ 6,298 Other revenues 2,782 138 172 3,092 Revenues from external customers 9,080 138 172 9,390 Interest and investment income, including recognized gains and losses 294 1,095 ( 1 ) 1,388 Total revenues 9,374 1,233 171 10,778 Depreciation and amortization 149 123 24 296 Interest expense 1 18 71 90 Earnings (loss) before income taxes and equity in earnings of unconsolidated affiliates 1,878 86 ( 180 ) 1,784 Income tax expense (benefit) 432 ( 75 ) ( 35 ) 322 Earnings (loss) before equity in earnings of unconsolidated affiliates 1,446 161 ( 145 ) 1,462 Equity in earnings of unconsolidated affiliates 14 — 1 15 Net earnings (loss) $ 1,460 $ 161 $ ( 144 ) $ 1,477 Assets $ 9,211 $ 39,714 $ 1,530 $ 50,455 Goodwill 2,478 1,751 266 4,495 The activities in our segments include the following: • Title. This segment consists of the operations of our title insurance underwriters and related businesses. This segment provides core title insurance and escrow and other title-related services including trust activities, trustee sales guarantees, and home warranty products. This segment also includes our transaction services business, which includes other title-related services used in the production and management of mortgage loans, including mortgage loans that experience default. • F&G . This segment primarily consists of the operations of our annuities and life insurance related businesses. This segment issues a broad portfolio of annuity and life products, including deferred annuities (fixed indexed and fixed rate annuities), immediate annuities and indexed universal life insurance. This segment also provides funding agreements and pension risk transfer solutions. • Corporate and Other. This segment consists of the operations of the parent holding company, our real estate technology subsidiaries and our remaining real estate brokerage businesses. This segment also includes certain other unallocated corporate overhead expenses and eliminations of revenues and expenses between it and our Title segment. Refer to Note L Revenue Recognition for a description of our accounting for our various revenue streams. 143 Table of Contents Note K — 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. Year Ended December 31, 2022 2021 2020 (In millions) Cash paid for: Interest $ 125 $ 112 $ 73 Income taxes 387 653 315 Deferred sales inducements 87 90 46 Non-cash investing and financing activities: Equity financing associated with the acquisition of F&G $ — $ — $ 609 Distribution of 15 % of the common stock of F&G 320 — — Investments received from pension risk transfer premiums — 316 — Change in proceeds of sales of investments available for sale receivable in period 96 ( 160 ) ( 4 ) Change in purchases of investments available for sale payable in period ( 25 ) 18 14 Lease liabilities recognized in exchange for lease right-of-use assets 70 47 44 Remeasurement of lease liabilities 60 87 48 Liabilities assumed in connection with acquisitions (excluding F&G)(1) Fair value of assets acquired 266 85 32 Less: Total Purchase price 180 59 24 Liabilities and noncontrolling interests assumed $ 86 $ 26 $ 8 (1) For further information related to the acquisition of F&G, refer to Note B Acquisitions 144 Table of Contents Note L — Revenue Recognition Disaggregation of Revenue Our revenue consists of: Year Ended December 31, 2022 2021 2020 Revenue Stream Income Statement Classification Segment Total Revenue Revenue from insurance contracts: (In millions) Direct title insurance premiums Direct title insurance premiums Title $ 2,858 $ 3,571 $ 2,699 Agency title insurance premiums Agency title insurance premiums Title 3,976 4,982 3,599 Life insurance premiums, insurance and investment product fees, and other (1) Escrow, title-related and other fees F&G 1,695 1,395 138 Home warranty Escrow, title-related and other fees Title 165 185 181 Total revenue from insurance contracts 8,694 10,133 6,617 Revenue from contracts with customers: Escrow fees Escrow, title-related and other fees Title 980 1,395 1,170 Other title-related fees and income Escrow, title-related and other fees Title 752 888 724 ServiceLink, excluding title premiums, escrow fees, and subservicing fees Escrow, title-related and other fees Title 342 396 368 Real estate technology Escrow, title-related and other fees Corporate and other 158 142 112 Real estate brokerage Escrow, title-related and other fees Corporate and other — — 25 Total revenue from contracts with customers 2,232 2,821 2,399 Other revenue: Loan subservicing revenue Escrow, title-related and other fees Title 263 364 338 Other Escrow, title-related and other fees Corporate and other ( 31 ) 30 36 Interest and investment income Interest and investment income Various 1,891 1,961 900 Recognized gains and losses, net Recognized gains and losses, net Various ( 1,493 ) 334 488 Total revenues Total revenues $ 11,556 $ 15,643 $ 10,778 (1) Includes $ 1,362 and 1,146 of life-contingent pension risk transfer premiums in 2022 and 2021, respectively. Our Direct title insurance premiums are recognized as revenue at the time of closing of the underlying transaction as the earnings process is then considered complete. Regulation of title insurance rates varies by state. Premiums are charged to customers based on rates predetermined in coordination with each states' respective Department of Insurance. Cash associated with such revenue is typically collected at closing of the underlying real estate transaction. Premium revenues from agency title operations are recognized when the underlying title order and transaction closing, if applicable, are complete. Revenues from our home warranty business are generated from contracts with customers to provide warranty for major home appliances. Substantially all of our home warranty contracts are one year in length and revenue is recognized ratably over the term of the contract. Escrow fees and Other title-related fees and income in our Title segment are closely related to Direct title insurance premiums and are primarily associated with managing the closing of real estate transactions including the processing of funds on behalf of the transaction participants, gathering and recording the required closing documents, providing notary and home inspection services, and other real estate or title-related activities. Revenue is primarily recognized upon closing of the underlying real estate transaction or completion of services. Cash associated with such revenue is typically collected at closing. Revenues from ServiceLink, excluding its title premiums, escrow fees and loan subservicing fees primarily include revenues from real estate appraisal services and foreclosure processing and facilitation services. Revenues from real estate appraisal services are recognized when all appraisal work is complete, a final report is issued to the client and the client is billed. Revenues from foreclosure processing and facilitation services are primarily recognized upon completion of the services and when billing to the client is complete. Life insurance premiums in our F&G segment reflect premiums for life-contingent PRT, traditional life insurance products and life-contingent immediate annuity products, which are recognized as revenue when due from the policyholder. 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. Insurance and investment product fees and other consist primarily of the cost of insurance on IUL policies, unearned revenue ("UREV") on IUL policies, policy rider fees primarily on FIA 145 Table of Contents policies and surrender charges assessed against policy withdrawals in excess of the policyholder's allowable penalty-free amounts. Premium and annuity deposit collections for FIA, fixed rate annuities, immediate annuities and PRT without life contingency, 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 DAC, DSI, and VOBA, other operating costs and expenses, and income taxes. Premiums, annuity deposits (net of reinsurance) and funding agreements, which are not included as revenues in the accompanying Consolidated Statements of Earnings, collected by product type were as follows: Year ended December 31, 2022 December 31, 2021 December 31, 2020 Product Type (In millions) Fixed indexed annuities 4,483 4,420 $ 1,966 Fixed rate annuities 1,522 878 631 Funding agreements (FABN/FHLB) 1,891 2,658 100 Life insurance and other (a) 446 329 152 Total $ 8,342 $ 8,285 $ 2,849 (a) Life insurance and other primarily includes indexed universal life insurance. Real estate technology revenues are primarily comprised of subscription fees for use of software provided to real estate professionals. Subscriptions are only offered on a month-by-month basis and fees are billed monthly. Revenue is recognized in the month services are provided. Real estate brokerage revenues are primarily comprised of commission revenues earned in association with the facilitation of real estate transactions and are recognized upon closing of the sale of the underlying real estate transaction. Loan subservicing revenues are generated by certain subsidiaries of ServiceLink and are associated with the servicing of mortgage loans on behalf of its customers. Revenue is recognized when the underlying work is performed and billed. Loan subservicing revenues are subject to the recognition requirements of ASC Topic 860. Interest and investment income consists primarily of interest payments received on fixed maturity security holdings and dividends received on equity and preferred security holdings along with the investment income of limited partnerships. We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, primarily related to revenue from our home warranty business, and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. Contract Balances The following table provides information about trade receivables and deferred revenue: December 31, 2022 December 31, 2021 (In millions) Trade receivables $ 349 $ 524 Deferred revenue (contract liabilities) 296 144 Deferred revenue is recorded primarily for our home warranty contracts. Revenues from home warranty products are recognized over the life of the policy, which is primarily one year . The unrecognized portion is recorded as deferred revenue in accounts payable and other accrued liabilities in the Consolidated Balance Sheets. During the years ended December 31, 2022 and 2021, we recognized $ 98 million and $ 106 million of revenue, respectively, which was included in deferred revenue at the beginning of the respective period. 146 Table of Contents Note M — Other Intangible Assets A summary of the changes in the carrying amounts of our VOBA, DAC and DSI intangible assets are as follows (in millions): VOBA DAC DSI Total Balance at January 1, 2022 $ 1,185 $ 761 $ 88 $ 2,034 Purchase price allocation adjustments — — — Deferrals — 727 87 814 Amortization ( 203 ) ( 107 ) ( 43 ) ( 353 ) Interest 25 30 2 57 Unlocking ( 5 ) ( 4 ) 5 ( 4 ) Adjustment for net unrealized investment (gains) losses 662 182 68 912 Balance at December 31, 2022 $ 1,664 $ 1,589 $ 207 $ 3,460 VOBA DAC DSI Total Balance at January 1, 2021 $ 1,466 $ 222 $ 36 $ 1,724 Purchase price allocation adjustments 61 — — 61 Deferrals — 585 90 675 Amortization ( 436 ) ( 46 ) ( 35 ) ( 517 ) Interest 30 13 1 44 Unlocking 13 1 ( 2 ) 12 Adjustment for net unrealized investment (losses) gains 51 ( 14 ) ( 2 ) 35 Balance at December 31, 2021 $ 1,185 $ 761 $ 88 $ 2,034 Amortization of VOBA, DAC, and DSI is based on the current and future expected gross margins or profits recognized, including investment gains and losses. The interest accrual rate utilized to calculate the accretion of interest on VOBA ranged from 0 % to 4.71 % for the years ended December 31, 2022 and December 31, 2021. The adjustment for unrealized net investment losses (gains) represents the amount of VOBA, DAC, and DSI that would have been amortized if such unrealized gains and losses had been recognized. This is referred to as the “shadow adjustments” as the additional amortization is reflected in AOCI On the Consolidated Balance Sheet rather than as depreciation and amortization on the Consolidated Statements of Earnings. As of December 31, 2022 and 2021, the VOBA balances included cumulative adjustments for net unrealized investment gains (losses) of $( 430 ) million and $ 232 million respectively, the DAC balances included cumulative adjustments for net unrealized investment gains (losses) of $( 143 ) million and $ 39 million, respectively, and the DSI balance included net unrealized investment gains of $( 61 ) million and $ 7 million, respectively. For the in-force liabilities as of December 31, 2022, the estimated amortization expense for VOBA in future fiscal periods is as follows (in millions): Estimated Amortization Expense Fiscal Year 2023 $ ( 53 ) 2024 172 2025 151 2026 133 2027 129 Thereafter 702 147 Table of Contents Definite and Indefinite Lived Other Intangible Assets Other intangible assets as of December 31, 2022 consist of the following (in millions): Cost Accumulated amortization Net carrying amount Weighted average useful life (years) Customer relationships and contracts $ 916 $ ( 713 ) $ 203 10 Computer software 537 ( 341 ) 196 2 to 10 Value of distribution asset (VODA) 140 ( 40 ) 100 15 Definite lived trademarks, tradenames, and other 56 ( 41 ) 15 10 Indefinite lived tradenames and other 60 N/A 60 Indefinite Total $ 574 Other intangible assets as of December 31, 2021 consist of the following (in millions): Cost Accumulated amortization Net carrying amount Weighted average useful life (years) Customer relationships and contracts $ 803 $ ( 651 ) $ 152 10 Computer software 488 ( 307 ) 181 2 to 10 Value of distribution Asset (VODA) 140 ( 25 ) 115 15 Definite lived trademarks, tradenames, and other 49 ( 33 ) 16 10 Indefinite lived tradenames and other 59 N/A 59 Indefinite Total $ 523 Amortization expense for amortizable intangible assets, which consist primarily of VODA, customer relationships and computer software and definite lived trademarks, tradenames and other, was $ 133 million, $ 135 million, and $ 138 million for the years ended December 31, 2022, 2021 and 2020, respectively. Estimated amortization expense for the next five years for assets owned at December 31, 2022, is $ 131 million in 2023, $ 96 million in 2024, $ 72 million in 2025, $ 58 million in 2026 and $ 47 million in 2027. Note N — Goodwill A summary of the changes in Goo dwill consists of the following: Title F&G Corporate and Other Total (In millions) Balance, December 31, 2020 $ 2,478 $ 1,751 $ 266 $ 4,495 Goodwill associated with acquisitions 38 — — 38 Adjustments to prior year acquisitions $ 1 $ 5 $ — 6 Balance, December 31, 2021 $ 2,517 $ 1,756 $ 266 $ 4,539 Goodwill associated with acquisitions 103 — — 103 Balance, December 31, 2022 $ 2,620 $ 1,756 $ 266 $ 4,642 Note O — F&G 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 limit its exposure to mortality losses and enhance capital management. F&G follows reinsurance accounting when there is adequate risk transfer or deposit accounting if there is inadequate risk transfer. If the underlying policy being reinsured is an investment contract, the effects of the agreement are accounted for as a separate investment contract. Refer to Note A Business and Summary of Significant Accounting Policies for more information over our accounting policy for reinsurance agreements. 148 Table of Contents The effect of reinsurance on net premiums earned and net benefits incurred (benefits paid and reserve changes) for the years ended December 31, 2022 and December 31, 2021, and the seven months ended December 31, 2020 were as follows (in millions): Year Ended Seven months ended December 31, 2022 December 31, 2021 December 31, 2020 Net Premiums Earned Net Benefits Incurred Net Premiums Earned Net Benefits Incurred Net Premiums Earned Net Benefits Incurred Direct $ 1,522 $ 3,671 $ 1,314 $ 3,282 $ 108 $ 976 Assumed — — — — — 1 Ceded ( 128 ) ( 2,546 ) ( 137 ) ( 1,144 ) ( 85 ) ( 111 ) Net $ 1,394 $ 1,125 $ 1,177 $ 2,138 $ 23 $ 866 Amounts payable or recoverable for reinsurance on paid and unpaid claims are not subject to periodic or maximum limits. F&G did not write off any significant reinsurance balances during the years ended December 31, 2022 and December 31, 2021, or the seven months ended December 31, 2020. F&G did not commute any ceded reinsurance treaties during the years ended December 31, 2022 and December 31, 2021, or the seven months ended December 31, 2020. 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. As of the June 1, 2020 acquisition of F&G, due to purchase accounting adjustments, our expected credit loss reserve was valued at $ 0 . For the seven months ended December 31, 2020, the expected credit loss reserve increased from $ 0 to $ 21 million. As of December 31, 2022 and December 31, 2021, the expected credit loss reserve was $ 10 million and $ 20 million, respectively. 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. New Reinsurance Transaction. Effective December 31, 2022, F&G entered into an indemnity reinsurance agreement with New Reinsurance Company Ltd. ("New Re"), a third-party reinsurer, to cede a quota share of certain FIA policies and related waiver of surrender charges, issued after January 1, 2022, on a coinsurance and yearly renewable term basis. The coinsurance quota share is only applicable to the base contract benefits under the FIA policies. The yearly renewable term is applicable to the waiver of surrender charges. As the FIA policies ceded do not include any GMWB or GMDB benefits, there is no significant insurance risk present and therefore the effects of this agreement are accounted for as a separate investment contract. Aspida Reinsurance Transaction. F&G executed a Funds Withheld Coinsurance Agreement with Aspida Re, a Bermuda reinsurer. In accordance with the terms of this agreement, F&G cedes to the reinsurer, on a fifty percent ( 50 %) funds withheld coinsurance basis, certain multiyear guaranteed annuity business written effective January 1, 2021. The agreement was originally executed January 15, 2021 and amended in August 2021 and September 2022. For reinsured policies issued prior to September 1, 2022, the policies are ceded on a fifty percent ( 50 %) quota share basis. For reinsured policies issued on or after September 1, 2022, the policies are ceded on a seventy-five percent ( 75 %) quota share basis, capped at $ 350 million cession per month. As the policies ceded to Aspida are investment contracts, there is no significant insurance risk present and therefore the effects of this agreement are accounted for as a separate investment contract. Somerset Reinsurance Transaction. F&G entered into a reinsurance agreement with Kubera, a third-party reinsurer, effective December 31, 2018, to cede certain MYGA and deferred annuity GAAP and statutory reserves on a coinsurance funds withheld basis, net of applicable existing reinsurance. In accordance with the terms of this agreement, F&G cedes a quota share percentage of MYGA and deferred annuity policies for certain issue years to Kubera. Effective October 31, 2021, this agreement was novated from Kubera to Somerset, a certified third-party reinsurer. This agreement cedes GAAP and statutory reserves of approximately $ 1 billion. As the policies ceded to Somerset are investment contracts, there is no significant insurance risk present and therefore the effects of this agreement are accounted for as a separate investment contract. Kubera Reinsurance Transaction. 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. In accordance with the terms of this agreement, F&G cedes a quota share percentage of FIA policies for certain issue years to Kubera. Effective October 31, 2021, this agreement was amended to increase the ceded reserves from approximately $ 4 billion to approximately $ 10 billion. The agreement was subsequently amended and restated on October 1, 2022 whereby F&G recaptured approximately $ 52 million in statutory reserves solely related to waiver of surrender charges. As the policies ceded to Kubera are investment contracts, there 149 Table of Contents is no significant insurance risk present and therefore the reinsurance agreement is accounted for as a separate investment contract. F&G incurred risk charge fees of $ 12 million $ 5 million, and $ 4 million during the years ended December 31, 2022 and December 31, 2021, or the seven months ended December 31, 2020, respectively, in relation to this reinsurance agreement. To enhance Kubera's ability to pay its obligations under the amended reinsurance agreement, 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, 2022 and December 31, 2021, the amount funded under the NPA was insignificant. Canada Life Reinsurance Transaction. Effective May 1, 2020, F&G entered into an indemnity reinsurance agreement with Canada Life Assurance Company United States Branch, a third-party reinsurer, to reinsure FIA policies with GMWB. In accordance with the terms of this agreement, F&G cedes a quota share percentage of the net retention of guarantee payments in excess of account value for GMWB. This treaty was amended effective January 1, 2021 and January 1, 2022, and covers FIA policies with GMWB issued from January 1, 2020 to December 31, 2023. Effective October 1, 2022, the treaty was then amended and restated to cover additional FIA business policies. The effects of this agreement are not accounted for as reinsurance as it does not satisfy the risk transfer requirements for GAAP; therefore, deposit accounting is applied. F&G incurred risk charge fees of $ 4 million, $ 2 million and $ 1 million during the years ended December 31, 2022 and December 31, 2021, and the seven months ended December 31, 2020, respectively, in relation to this reinsurance agreement. Hannover Reinsurance Transaction. F&G has an indemnity reinsurance agreement with Hannover Re, a third-party reinsurer, to cede a quota share percentage of the net retention of guarantee payments in excess of account value for GMWB and GMDB guarantees associated with an in-force block of its FIA and fixed deferred annuity contracts. The effects of this agreement are not accounted for as reinsurance as it does not satisfy the risk transfer requirements for GAAP; therefore, deposit accounting is applied. F&G incurred risk charge fees of $ 20 million, $ 21 million and $ 12 million during the years ended December 31, 2022 and December 31, 2021, or the seven months ended December 31, 2020, respectively, in relation to this reinsurance agreement. Wilton Reinsurance Transaction . Pursuant to the agreed upon terms, Wilton Reassurance Company (“Wilton Re”) purchased through a 100 % quota share reinsurance agreement certain FGL Insurance life insurance policies that are subject to redundant reserves, reported on a statutory basis, under Regulation XXX and Guideline AXXX, as well as another block of FGL Insurance’s in-force traditional, universal life and IUL insurance policies. The effects of this agreement are accounted for as reinsurance as the ceded policies qualify as insurance products and because the agreement satisfies the risk transfer requirements for GAAP. Concentration of Reinsurance Risk The Company has a significant concentration of reinsurance risk with third-party reinsurers, Aspida Re, Wilton Reassurance Company (“Wilton Re”), and Somerset 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. Aspida Re has an A- issuer credit rating from AM Best as of December 31, 2022, and the risk of non-performance is further mitigated through the funds withheld arrangement. Wilton Re has an A+ issuer credit rating from AM Best and an A issuer credit rating from Fitch as of December 31, 2022. Somerset has an A- issuer credit rating from AM Best and a BBB+ issuer credit rating from S&P as of December 31, 2022, and the risk of non-performance is further mitigated through the funds withheld arrangement. On December 31, 2022, the net amounts recoverable from Aspida Re, Wilton Re, and Somerset were $ 3,121 million, $ 1,231 million, and $ 570 million, respectively. We monitor both the financial condition of individual reinsurers and risk concentration arising from similar activities and economic characteristics of reinsurers to attempt to reduce the risk of default by such reinsurers. We believe that all amounts due from Aspida Re, Wilton Re, and Somerset for periodic treaty settlements are collectible as of December 31, 2022. Intercompany Reinsurance Agreements Effective December 31, 2022, FGL Insurance entered into a Coinsurance Agreement with F&G Life Re Ltd. ("Reinsurer"), an affiliated Bermuda reinsurer to issue a quota share of PRT group annuity contracts. Some of the contracts reinsured are held by FGL Insurance’s general account and others are held by a FGL Insurance separate account (which does not meet the GAAP definition of a separate account). The cession from FGL Insurance to the Reinsurer is on a 80 % quota share basis. Reinsurance of the separate account contracts are maintained on a modified coinsurance basis and reinsurance of the 150 Table of Contents general account contracts are maintained on a funds withheld basis. On the funds withheld portion of the transaction, FGL Insurance ceded approximately $ 380 million, in certain PRT Statutory Reserves and Interest Maintenance Reserve. FGL Insurance also established a modified coinsurance reserve of approximately $ 1.7 billion associated with the PRT Separate Account Insurance Liabilities. F&G has a reinsurance treaty with Raven Reinsurance Company ("Raven Re"), its wholly-owned captive reinsurance company, to cede the Commissioners Annuity Reserve Valuation Method ("CARVM") liability for annuity benefits where surrender charges are waived related to certain FIA, DA and MYGA policies. Effective October 1, 2022, the treaty was amended and restated to cover additional FIA, DA and MYGA policy issue years. In connection with the CARVM reinsurance agreement, FGL Insurance and Raven Re entered into an agreement with Nomura Bank International plc (“NBI”) to establish a reserve financing facility in the form of a letter of credit issued by NBI. The reimbursement agreement associated with the facility was amended and restated on September 30, 2022. As a result, the financing facility now has $ 200 million available to draw on as of December 31, 2022. The amended facility may terminate earlier than the current termination date of October 1, 2027, in accordance with the terms of the reimbursement agreement. Under the terms of the reimbursement agreement, in the event the letter of credit is drawn upon, Raven Re is required to repay the amounts utilized, and Fidelity & Guaranty Life Holdings, Inc. ("FGLH") is obligated to repay the amounts utilized if Raven Re fails to make the required reimbursement. FGLH also is required to make capital contributions to Raven Re in the event that Raven Re’s statutory capital and surplus falls below certain defined levels. As of December 31, 2022 and December 31, 2021, Raven Re’s statutory capital and surplus was $ 11 million and $ 62 million, respectively, in excess of the minimum level required under the reimbursement agreement. As this letter of credit is provided by an unaffiliated financial institution, Raven Re is permitted to carry the letter of credit as an admitted asset on the Raven Re statutory balance sheet. Effective December 31, 2020, FGL Insurance executed a Coinsurance Agreement with F&G Life Re Ltd. ("Reinsurer"), an affiliated Bermuda reinsurer, to reinsure a quota share of FIA policies to the Reinsurer. Concurrently, the Reinsurer and F&G Cayman Re Ltd., an affiliated reinsurer of both FGL Insurance and the Reinsurer, entered into a Retrocession Agreement. The cession from FGL Insurance to the Reinsurer is on a 100 % quota share basis, net of applicable existing reinsurance and the retrocession to F&G Cayman Re Ltd. from the Reinsurer is on a 45 % quota share basis. Additionally, both treaties are maintained on a funds withheld basis. FGL Insurance ceded and the Reinsurer retroceded approximately $ 5.0 billion and $ 2.2 billion, respectively, in certain FIA Statutory Reserves and Interest Maintenance Reserve. Note P — Regulation and Equity Regulation Title Our insurance subsidiaries, including title insurers, underwritten title companies and insurance agencies, are subject to extensive regulation under applicable state laws. Each of the insurance underwriters is subject to a holding company act in its state of domicile that regulates, among other matters, the ability to pay dividends and enter into transactions with affiliates. The laws of most states in which we transact business establish supervisory agencies with broad administrative powers relating to issuing and revoking licenses to transact business, regulating trade practices, licensing agents, approving policy forms, accounting practices, financial practices, establishing reserve and capital and surplus as regards policyholders (“capital and surplus”) requirements, defining suitable investments for reserves and capital and surplus and approving rate schedules. The process of state regulation of changes in rates ranges from states that set rates, to states where individual companies or associations of companies prepare rate filings that are submitted for approval, to a few states in which rate changes do not need to be filed for approval. Since we are regulated by both state and federal governments and the applicable insurance laws and regulations are constantly subject to change, it is not possible to predict the potential effects on our insurance operations, particularly the Title segment, of any laws or regulations that may become more restrictive in the future or if new restrictive laws will be enacted. Statutory-basis financial statements are prepared in accordance with accounting practices prescribed or permitted by the various state insurance regulatory authorities. The National Association of Insurance Commissioners' (“NAIC” ) Accounting Practices and Procedures manual (“NAIC SAP”) has been adopted as a component of prescribed or permitted practices by each of the states that regulate us. Each of our states of domicile for our title insurance underwriter subsidiaries have adopted a material prescribed accounting practice that differs from that found in NAIC SAP. Specifically, in both years, the timing of amounts released from the statutory unearned premium reserve under NAIC SAP differs from the states' required practice. Statutory surplus at December 31, 2022 and 2021 was lower by approximately $ 32 million and $ 29 million than if we had reported such amounts in accordance with NAIC SAP. 151 Table of Contents Pursuant to statutory accounting requirements of the various states in which our insurers are domiciled, these insurers must defer a portion of premiums earned as an unearned premium reserve for the protection of policyholders and must maintain qualified assets in an amount equal to the statutory requirements. The level of unearned premium reserve required to be maintained at any time is determined by statutory formula based upon either the age, number of policies and dollar amount of policy liabilities underwritten, or the age and dollar amount of statutory premiums written. As of December 31, 2022, the combined statutory unearned premium reserve required and reported for our title insurers was $ 1,772 million . In addition to statutory unearned premium reserves, each of our insurers maintains reserves for known claims and surplus funds for policyholder protection and business operations. Each of our insurance subsidiaries is regulated by the insurance regulatory authority in its respective state of domicile, as well as that of each state in which it is licensed. The insurance commissioners of their respective states of domicile are the primary regulators of our title insurance subsidiaries. Each of the insurers is subject to periodic regulatory financial examination by regulatory authorities. Our insurance subsidiaries are subject to regulations that restrict their ability to pay dividends or make other distributions of cash or property to their immediate parent company without prior approval from the Department of Insurance of their respective states of domicile. As of December 31, 2022 , $ 1,442 million of our net assets are restricted from dividend payments without prior approval from the Departments of Insurance. During 2023, our title insurers can pay or make distributions to us of approximately $ 606 million, without prior approval. The combined statutory capital and surplus of our title insurers was approximately $ 1,350 million and $ 1,903 million as of December 31, 2022 and 2021, respectively. The combined statutory net earnings of our title insurance subsidiaries were $ 778 million, $ 936 million, and $ 629 million for the years ended December 31, 2022 , 2021, and 2020, respectively. As a condition to continued authority to underwrite policies in the states in which our insurers conduct their business, the insurers are required to pay certain fees and file information regarding their officers, directors and financial condition. In addition, our escrow and trust business is subject to regulation by various state banking authorities. Pursuant to statutory requirements of the various states in which our insurers are domiciled, such insurers must maintain certain levels of minimum capital and surplus. Required levels of minimum capital and surplus are not significant to the insurers individually or in the aggregate. Each of our insurers has complied with the minimum statutory requirements as of December 31, 2022. Our underwritten title companies, primarily those domiciled in California, are also subject to certain regulation by insurance regulatory or banking authorities relating to their net worth and working capital. Minimum net worth and working capital requirements for each underwritten title company is less than $ 1 million. These companies were in compliance with their respective minimum net worth and working capital requirements at December 31, 2022. There are no restrictions on our retained earnings regarding our ability to pay dividends to shareholders although there are limits on the ability of certain subsidiaries to pay dividends to us, as described above. F&G Through our wholly owned F&G subsidiary, our U.S. insurance subsidiaries, FGL Insurance, Fidelity & Guaranty Life Insurance Company of New York ("FGL NY Insurance"), and Raven Re, file financial statements with state insurance regulatory authorities and the NAIC that are prepared in accordance with 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. 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. 152 Table of Contents Our principal insurance subsidiaries' statutory (SAP and GAAP) 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) Statutory Net income (loss): Year ended December 31, 2022 $ ( 243 ) $ ( 15 ) $ ( 111 ) Year ended December 31, 2021 351 4 3 Statutory Capital and Surplus: December 31, 2022 $ 1,877 $ 82 $ 121 December 31, 2021 1,473 99 115 (a) FGL NY Insurance and Raven Re are subsidiaries of FGL Insurance, and the columns should not be added together. FGL Insurance, FGL NY Insurance and Raven Re's respective statutory capital and surplus satisfies the applicable minimum regulatory requirements. Life insurance companies domiciled in the U.S. are subject to certain Risk-Based Capital (“RBC”) requirements as specified by the NAIC. The 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. We monitor the RBC of FGLH’s insurance subsidiaries. As of December 31, 2022, each of FGLH's insurance subsidiaries had exceeded the minimum RBC requirements. Our insurance subsidiaries domiciled in the U.S. are restricted by state laws and regulations as to the amount of dividends they may pay to their parent, our wholly owned F&G subsidiary, without regulatory approval in any year, the purpose of which is to protect affected insurance policyholders, depositors or investors. Any dividends in excess of limits are deemed “extraordinary” and require regulatory approval. In addition, and pursuant to an order issued by the Iowa Commissioner on November 28, 2017, FGL Insurance may not pay any dividend or other distribution to shareholders prior to November 28, 2020 without the prior approval of the Iowa Commissioner. During the years ended December 31, 2022 and 2021, upon approval by the Iowa Commissioner, FGL Insurance declared and paid extraordinary dividends of $ 0 million and $ 38 million to its parent, respectively. FGL Insurance applies Iowa-prescribed accounting practices that permit Iowa-domiciled insurers to report equity call options used to economically hedge FIA index credits at amortized cost for statutory accounting purposes and to calculate FIA statutory reserves such that index credit returns will be included in the reserve only after crediting to the annuity contract. Effective October 1, 2022, the Company incorporated IUL products under these Iowa-prescribed accounting practices. This resulted in a $ 152 million and $ 106 million decrease to statutory capital and surplus at December 31, 2022 and 2021, 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 $ 200 million and $ 85 million at December 31, 2022 and 2021, respectively. Raven Re is also permitted to follow Iowa prescribed statutory accounting practice for its reserves on reinsurance assumed from FGL Insurance, which increased Raven Re’s statutory capital and surplus by $ 28 million at December 31, 2022 and by $ 0 million at December 31, 2021. Without such permitted statutory accounting practices, Raven Re’s statutory capital and surplus (deficit) would be $( 107 ) million as of December 31, 2022 and would be $ 30 million as of December 31, 2021, and its risk-based capital would not 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 as discussed in Note O F&G Reinsurance . FGL Insurance’s statutory carrying value of Raven Re was $ 121 million and $ 115 million at December 31, 2022 and 2021, respectively. As of December 31, 2022, FGL NY Insurance did not follow any prescribed or permitted statutory accounting practices that differ from the NAIC's statutory accounting practices. The prescribed and permitted statutory accounting practices have no impact on our Consolidated Financial Statements, which are prepared in accordance with GAAP. 153 Table of Contents Equity On August 3, 2021, our Board of Directors approved the 2021 Repurchase Program under which we may purchase up to 25 million shares of our FNF common stock through July 31, 2024, replacing the prior stock repurchase program that expired on July 31, 2021. We may make repurchases from time to time in the open market, in block purchases or in privately negotiated transactions, depending on market conditions and other factors. During the year ended December 31, 2022, we repurchased a total of 13,369,565 FNF common shares for an aggregate of $ 549 million or an average of $ 41.05 per share. Subsequent to December 31, 2022 and through market close on February 23, 2023, we repurchased a total of 100,000 shares for $ 4 million, or an average of $ 38.45 under this program. Note Q - Leases Right-of-use assets and lease liabilities related to operating leases under ASC Topic 842 are recorded when we are party to a contract, which conveys the right for us to control an asset for a specified period of time. Substantially all of our operating lease arrangements relate to rented office space and real estate for our title operations. We generally are not a party to any material contracts considered finance leases. Right-of-use assets and lease liabilities under ASC Topic 842 are recorded as Lease assets and Lease liabilities, respectively, on the Consolidated Balance Sheet as of December 31, 2022. Our operating leases range in term from one to ten years . As of December 31, 2022, the weighted-average remaining lease term of our operating leases was 4.3 years. Our lease agreements do not contain material variable lease payments, buyout options, residual value guarantees or restrictive covenants. Most of our leases include one or more options to renew, with renewal terms that can extend the lease term by varying amounts. The exercise of lease renewal options is at our sole discretion. We do not include options to renew in our measurement of lease assets and lease liabilities as they are not considered reasonably assured of exercise. Our operating lease liability is determined by discounting future lease payments using a discount rate based on our incremental borrowing rate for similar collateralized borrowing. The discount rate is calculated as an average of the current yield on our unsecured notes payable and 140 basis points in excess of the current five year LIBOR swap rate. As of December 31, 2022 the weighted-average discount rate used to determine our operating lease liability was 3.4 %. We do not separate lease components from non-lease components for any of our right-of-use assets. Our lease costs are included in Other operating expenses on the Consolidated Statements of Earnings and was $ 142 million, $ 139 million and $ 150 million for the years ended December 31, 2022, 2021 and 2020, respectively. We do not have any material short term lease costs, variable lease costs, or sublease income. Future payments under operating lease arrangements accounted for under ASC Topic 842 as of December 31, 2022 are as follows (in millions): 2023 $ 147 2024 116 2025 74 2026 51 2027 26 Thereafter 35 Total operating lease payments, undiscounted $ 449 Less: present value discount 31 Lease liability, at present value $ 418 See Note K Supplementary Cash Flow Information for certain information on noncash investing and financing activities related to our operating lease arrangements. 154 Table of Contents Note R - Property and Equipment Property and equipment consist of the following: December 31, 2022 2021 (In millions) Furniture, fixtures and equipment $ 235 $ 239 Data processing equipment 212 210 Leasehold improvements 118 121 Buildings 84 79 Land 14 14 Other 7 5 Total property and equipment, gross 670 668 Accumulated depreciation and amortization ( 491 ) ( 483 ) Total property and equipment, net $ 179 $ 185 Depreciation expense on property and equipment was $ 59 million, $ 45 million, and $ 48 million for the years ended December 31, 2022, 2021 , and 2020 , respectively. Note S - Accounts Payable and Other Accrued Liabilities Accounts payable and other accrued liabilities consist of the following: December 31, 2022 2021 (In millions) Salaries and incentives $ 390 $ 537 Accrued benefits 408 447 Deferred revenue 296 144 Contingent consideration - acquisitions 47 30 Trade accounts payable 156 129 Accrued recording fees and transfer taxes 12 14 Accrued premium taxes 20 59 Liability for policy and contract claims 109 109 Retained asset account 117 148 Remittances and items not allocated 225 39 Option collateral liabilities 178 576 Funds withheld embedded derivative — 73 Other accrued liabilities 394 391 $ 2,352 $ 2,696 155 Table of Contents Note T — Income Taxes Income tax (benefit) expense on continuing operations consists of the following: Year Ended December 31, 2022 2021 2020 (In millions) Current $ 331 $ 656 $ 379 Deferred 67 57 ( 57 ) $ 398 $ 713 $ 322 Total income tax expense was allocated as follows: Year Ended December 31, 2022 2021 2020 (In millions) Net earnings from continuing operations $ 398 $ 713 $ 322 Other comprehensive (loss) earnings: Unrealized (loss) gain on investments and other financial instruments ( 947 ) ( 141 ) 332 Unrealized (loss) gain on foreign currency translation and cash flow hedging ( 4 ) — 1 Other comprehensive earnings attributable to noncontrolling interest 8 — — Minimum pension liability adjustment 2 ( 2 ) 4 Total income tax (benefit) expense allocated to other comprehensive earnings ( 941 ) ( 143 ) 337 Total income taxes $ ( 543 ) $ 570 $ 659 A reconciliation of the federal statutory rate to our effective tax rate is as follows: Year Ended December 31, 2022 2021 2020 Federal statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 2.2 1.6 2.5 Stock compensation ( 0.1 ) ( 0.2 ) ( 0.3 ) Tax credits ( 0.7 ) ( 0.2 ) ( 0.4 ) Consolidated partnerships ( 0.2 ) ( 0.1 ) ( 0.3 ) Tax gain on parent shares held ( 1.0 ) 0.5 — Valuation allowance for deferred tax assets 6.1 ( 0.3 ) ( 3.0 ) Change in tax status benefit — — ( 2.0 ) Benefit on Capital Loss Carryback ( 1.5 ) — — Non-deductible expenses and other, net 0.1 0.8 0.5 Effective tax rate 25.9 % 23.1 % 18.0 % 156 Table of Contents The significant components of deferred tax assets and liabilities consist of the following: December 31, 2022 2021 (In millions) Deferred Tax Assets: Employee benefit accruals $ 103 $ 111 Net operating loss carryforwards 38 27 Derivatives 67 — Accrued liabilities 5 1 Allowance for uncollectible accounts receivable 5 5 Pension plan 1 2 Tax credits 74 77 State income taxes 5 8 Investment securities 952 — Capital loss carryover 8 41 Life insurance and claim related adjustments 669 854 Funds held under reinsurance agreements 37 52 Other 21 33 Total gross deferred tax asset 1,985 1,211 Less: valuation allowance 151 33 Total deferred tax asset $ 1,834 $ 1,178 Deferred Tax Liabilities: Title plant $ ( 53 ) $ ( 52 ) Amortization of goodwill and intangible assets ( 117 ) ( 140 ) Other ( 2 ) ( 2 ) Investment securities — ( 401 ) Depreciation ( 32 ) ( 29 ) Partnerships ( 122 ) ( 182 ) Value of business acquired ( 350 ) ( 249 ) Derivatives — ( 68 ) Deferred acquisition costs ( 243 ) ( 102 ) Transition reserve on new reserve method ( 25 ) ( 34 ) Funds held under reinsurance agreements ( 183 ) ( 74 ) Title Insurance reserve discounting ( 31 ) ( 50 ) Total deferred tax liability $ ( 1,158 ) $ ( 1,383 ) Net deferred tax asset (liability) $ 676 $ ( 205 ) Our net deferred tax asset (liability) was $ 676 million and $( 205 ) million as of December 31, 2022 and 2021, respectively. The significant changes in the deferred taxes are as follows: the deferred tax liability for investment securities decreased by $ 1,353 million primarily due to unrealized losses recorded on investment securities, of which $ 144 million was related to unrealized losses in our Title segment and $ 1,209 million was related to unrealized losses in our F&G segment's life insurance business. The deferred tax liability relating to partnerships decreased by $ 60 million, primarily due to increased tax basis in partnership investments by F&G and R&E expense capitalization at FNF’s partnerships. The F&G segment’s life insurance business’ deferred tax liability relating to the VOBA increased by $ 101 million due to unrealized losses on the VOBA assets. The deferred tax liability related to deferred acquisition costs increased by $ 141 million, which is consistent with the growth in sales in our F&G segment. The deferred tax liability relating to derivatives in our F&G segment decreased by $ 135 million due to unrealized losses for call options. The reinsurance receivable deferred tax asset decreased by $ 15 million, and the reinsurance receivable deferred tax liability increased by $ 109 million both due to unrealized losses in the funds withheld portfolios in the F&G segment. The deferred tax asset relating to the capital loss carryover decreased by $ 33 million which is primarily related to the effective settlement of a capital loss carryback tax benefit previously unrecognized. The deferred tax asset relating to life insurance receivables decreased by $ 185 million primarily due to tax reserves increasing more than GAAP reserves by F&G. 157 Table of Contents As of December 31, 2022, we have net operating losses ("NOLs") on a pretax basis of $ 181 million, of which $ 48 million relates to our Title segment and $ 133 million relates to our F&G segment's life insurance business, which are available to carryforward and offset future federal taxable income. The NOLs are U.S. federal NOLs arising from acquisitions made since 2012, including Buyers Protection Group, Inc., Digital Insurance Holdings, Inc., ServiceLink, THL Corporations and F&G. Most of the NOLs are subject to an annual Internal Revenue Code Section 382 limitation. These losses will begin to expire in 2034 and we fully anticipate utilizing these losses prior to expiration with the exception of $ 25 million of gross net operating losses that are offset by a $ 25 million valuation allowance in the Title segment. As of December 31, 2022 and 2021, we had $ 74 million and $ 77 million of tax credits, respectively, which expire between 2025 and 2042. The credits primarily consist of general business credits from historical acquisitions, including $ 30 million associated with our F&G segment's life insurance business. We anticipate that these credits will be utilized prior to expiration after a valuation allowance of $ 28 million, which primarily relates to the general business credits in our Title segment. As of December 31, 2022, a valuation allowance on the net deferred tax asset for unrealized capital losses of $ 118 million was recorded, of which $ 88 million related to our Title segment and $ 30 million related to our F&G segment. Valuation allowance was recorded in 2022 because it is more likely than not that this amount of deferred tax assets will not be realized. We considered sources of income available as of December 31, 2022 and determined a valuation allowance was needed. No similar valuation allowance was necessary as of December 31, 2021 as there was a net deferred tax liability for unrealized capital gains. As of December 31, 2022 and 2021, the balance of unrecognized tax benefits which would, if recognized, favorably affect our effective tax rate was $ 0 million and $ 24 million, respectively. Interest and penalties accrued on income tax uncertainties are recorded as a component of income tax expense and were $ 0 million and $ 1 million as of December 31, 2022, and 2021, respectively. Unrecognized tax benefits decreased in 2022 when the refund was examined to a sufficient extent without adjustment such that the tax position was effectively settled. A reconciliation of the beginning and ending unrecognized tax benefits is as follows: Year ended December 31, 2022 2021 (In millions) Beginning balance $ 60 $ 64 Additions based on positions taken in current year 1 — Reductions related to statute of limitation lapses and audit payments ( 61 ) ( 4 ) Ending balance $ — $ 60 F&G's life insurance subsidiaries, as well as certain F&G non-life subsidiaries file separate tax returns from the FNF consolidated group. Prepaid expenses and other assets in the accompanying Consolidated Balance Sheets as of December 31, 2022 includes $ 27 million of tax receivables and $ 747 million of deferred tax assets related to F&G subsidiaries who file separate tax returns. Prepaid expenses and other assets in the accompanying Consolidated Balance Sheets as of December 31, 2021 includes $ 52 million of tax receivables related to F&G subsidiaries who file separate tax returns. The Internal Revenue Service (“IRS”) has selected us to participate in the CAP program that is a real-time audit. We are currently under audit by the IRS for the 2021 through 2022 tax years. We file income tax returns in various foreign and US state jurisdictions. Our state income tax returns for the 2018 through 2022 tax years remain subject to examination by state jurisdictions. The F&G life insurance group files a separate consolidated return with the IRS. F&G is not currently under examination by the IRS. Note U - Employee Benefit Plans Stock Purchase Plan During the three-year period ended December 31, 2022, our eligible employees could voluntarily participate in our employee stock purchase plan (“ESPP”) sponsored by us. Pursuant to the ESPP, employees may contribute an amount between 3 % and 15 % of their base salary and certain commissions. We contribute varying amounts as specified in the ESPP. We contribu ted $ 36 million, $ 24 million, and $ 30 million to the ESPP in the years ended December 31, 2022 , 2021, and 2020, respectively, in accordance with our matching contribution. FNF 401(k) Profit Sharing Plan During the three-year period ended December 31, 2022 , we have offered our employees the opportunity to participate in our 401(k) profit sharing plan (the “401(k) Plan”), a qualified voluntary contributory savings plan that is available to 158 Table of Contents substantially all of our employees. Eligible employees may contribute up to 40 % of their pre-tax annual compensation, up to the amount allowed pursuant to the Internal Revenue Code. During the years ended December 31, 2021 and 2020, we made an employer match on the 401(k) Plan of $ 0.375 on each $1.00 contributed up to the first 6 % of eligible earnings contributed to the 401(k) Plan by employees. During the year ended December 31, 2022, we increased the employer match on the 401(k) Plan to $ 0.50 on each $1.00 contributed up to the first 6 % of eligible earnings contributed to the 401(k) Plan by employees. The employer match was $ 50 million, $ 36 million, and $ 31 million for the years ended December 31, 2022, 2021, and 2020, respectively, and was credited based on the participant's individual investment elections in the FNF 401(k) Plan. Omnibus Incentive Plan In 2005, we established the FNT 2005 Omnibus Incentive Plan (as amended and restated, the “Omnibus Plan”) authorizing the issuance of up to 8 million shares of common stock, subject to the terms of the Omnibus Plan. On October 23, 2006; May 29, 2008; May 25, 2011; May 22, 2013; and June 15, 2016 the shareholders of FNF approved amendments to increase the number of shares for issuance under the Omnibus Plan by 16 million, 11 million, 6 million, 6 million and 10 million shares, respectively. The primary purpose of the increases were to assure that we had adequate means to provide equity incentive compensation to our employees on a going-forward basis. The 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, 2022, there were 1,841,544 shares of restricted stock and no stock options outstanding under the Omnibus Plan. Awards granted are approved by the Compensation Committee of the Board of Directors. Options vest over a 3 year period and have a contractual life o f 7 years. The exercise price for options granted equals the market price of the underlying stock on the grant date. Stock option grants vest according to certain time based and operating performance criteria. Option exercises by participants are settled on the open market. F&G Omnibus Incentive Plan On June 1, 2020, in connection with the acquisition of F&G, we assumed the shares that remained available for future awards under the FGL Holdings 2017 Omnibus Incentive Plan, as amended and restated (the “F&G Omnibus Plan”) and converted such shares into 2,096,429 shares of FNF common stock that may be issued pursuant to future awards granted under the F&G Omnibus Plan and 2,411,585 sh ares of FNF common stock that may be issued pursuant to outstanding stock options under the F&G Omnibus Plan. Each unvested stock option assumed under the F&G Omnibus Plan was converted into an FNF stock option and vests solely on the passage of time without any ongoing performance-vesting conditions. The options vest over a 3 year period, based on the option's initial grant date, and have a contractual life of 7 years. As of December 31, 2022, there were 501,548 shares of restricted stock and 1,172,607 stock options outstanding under the F&G Omnibus Plan. FNF stock option transactions under the Omnibus Plan for 2022 , 2021, and 2020 are as follows: Options Weighted Average Exercise Price Exercisable Balance, January 1, 2020 5,530,125 $ 20.88 5,530,125 Exercised ( 3,208,712 ) 18.45 Balance, December 31, 2020 2,321,413 $ 24.24 2,321,413 Exercised ( 1,325,300 ) 23.28 Balance, December 31, 2021 996,113 $ 25.53 996,113 Exercised ( 996,113 ) 25.53 Balance, December 31, 2022 — $ — — 159 Table of Contents FNF stock option transactions under the F&G Omnibus Plan for 2022, 2021 , and 2020 are as follows: Options Weighted Average Exercise Price Exercisable Balance January 1, 2020 — $ — — Options assumed in connection with F&G acquisition 2,411,585 36.04 Exercised ( 109,159 ) 27.64 Canceled ( 299,736 ) 38.41 Balance, December 31, 2020 2,002,690 $ 36.14 1,021,671 Exercised ( 474,754 ) 36.68 Canceled — — Balance, December 31, 2021 1,527,936 $ 35.97 1,072,584 Exercised ( 352,614 ) 38.79 Canceled ( 2,715 ) 28.00 Balance, December 31, 2022 1,172,607 $ 35.15 1,172,607 FNF restricted stock transactions under the Omnibus Plan in 2022 , 2021, and 2020 are as follows: Shares Weighted Average Grant Date Fair Value Balance, December 31, 2019 1,517,176 $ 38.90 Granted 1,006,058 33.40 Canceled ( 11,604 ) 38.93 Vested ( 795,075 ) 37.60 Balance, December 31, 2020 1,716,555 $ 36.26 Granted 772,189 48.27 Canceled ( 7,577 ) 37.20 Vested ( 841,941 ) 36.15 Balance, December 31, 2021 1,639,226 $ 41.97 Granted 994,548 40.83 Vested ( 792,230 ) 41.44 Balance, December 31, 2022 1,841,544 $ 41.59 160 Table of Contents FNF restricted stock transactions under the F&G Omnibus Plan in 2022, 2021 , 2020 are as follows: Shares Weighted Average Grant Date Fair Value Balance, January 1, 2020 — $ — Granted 474,025 34.13 Canceled ( 24,155 ) 34.47 Balance, December 31, 2020 449,870 $ 34.11 Granted 311,081 48.28 Canceled ( 12,437 ) 33.40 Vested ( 29,873 ) 34.59 Balance, December 31, 2021 718,641 $ 40.24 Granted — — Canceled ( 78,551 ) 37.79 Vested ( 138,542 ) 34.11 Balance, December 31, 2022 501,548 $ 42.31 The following table summarizes information related to stock options outstanding and exercisable as of December 31, 2022 : Options Outstanding Options Exercisable Weighted Weighted Average Weighted Average Weighted Remaining Average Remaining Average Range of Number of Contractual Exercise Intrinsic Number of Contractual Exercise Intrinsic Exercise Prices Options Life Price Value Options Life Price Value (In years) (In millions) (In years) (In millions) $ 0.00 - $ 27.53 359,510 2.98 $ 27.53 $ 4 359,510 2.98 $ 27.53 $ 4 $ 27.54 - $ 28.00 43,019 3.32 28.00 — 43,019 3.32 28.00 — $ 28.01 - $ 39.10 770,078 2.62 39.10 — 770,078 2.62 39.10 — 1,172,607 $ 4 1,172,607 $ 4 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. 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, 2022 , 2021 and 2020 was $ 41 million, $ 52 million, and $ 50 million, respectively. The total fair value of restricted stock awards, which vested in the years ended December 31, 2022 , 2021 and 2020 was $ 38 million, $ 43 million, and $ 25 million, respectively. Option awards are measured at fair value on the grant date using the Black Scholes Option Pricing Model. The intrinsic value of options exercised in the years ended December 31, 2022 , 2021 and 2020 was $ 16 million, $ 32 million, and $ 50 million, respectively. Net earnings attributable to FNF Shareholders reflects stock-based compensation expense amounts of $ 49 million for the year ended December 31, 2022, $ 43 million for the year ended December 31, 2021 , and $ 39 million for the year ended December 31, 2020 , which are included in personnel costs in the reported financial results of each period. At December 31, 2022 , the total unrecognized compensation cost related to non-vested stock option grants and restricted stock grants is $ 61 million, which is expected to be recognized in pre-tax income over a weighted average period of 1.72 years. Pension Plan In 2000, FNF merged with Chicago Title Corporation ("CTC"). In connection with the merger, we assumed CTC’s noncontributory defined contribution plan and noncontributory defined benefit pension plan (the “Pension Plan”). The Pension Plan covers certain CTC employees. The benefits are based on years of service and the employee’s average monthly compensation in the highest 60 consecutive calendar months during the 120 months ending at retirement or termination. Effective December 31, 2000, the Pension Plan was frozen and there will be no future credit given for years of service or changes in salary. The accumulated benefit obligation is the same as the projected benefit obligation due to the pension plan 161 Table of Contents being frozen as of December 31, 2000. Pursuant to GAAP on employers’ accounting for defined benefit pension and other post retirement plans, the measurement date is December 31. The discount rate used to determine the benefit obligation as of December 31, 2022 and 2021 wa s 4.85 % and 2.35 %, respectively. As of December 31, 2022 and 2021, the projected benefit obligation was $ 117 million and $ 154 million, respectively, and the fair value of plan assets was $ 112 million and $ 145 million, respectively. The net pension liability and net periodic expense included in our financial position and results of operations relating to the Pension Plan is not considered material for any period presented. Note V - Financial Instruments with Off-Balance Sheet Risk and Concentration of Risk In the normal course of business, we and certain of our subsidiaries enter into off-balance sheet credit arrangements associated with certain aspects of the title insurance business and other activities. We generate a significant amount of title insurance premiums in Texas, California, Florida, Pennsylvania and Illinois. Title insurance premiums as a percentage of the total title insurance premiums written from those five states are detailed as follows: 2022 2021 2020 Texas 15.0 % 13.0 % 12.3 % California 12.0 % 14.6 % 15.2 % Florida 10.6 % 9.3 % 8.6 % Illinois 5.3 % 5.1 % 5.0 % Pennsylvania 5.2 % 5.1 % 4.8 % Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents, short-term investments, and trade receivables. We place cash equivalents and short-term investments with high credit quality financial institutions and, by policy, limit the amount of credit exposure with any one financial institution. Investments in commercial paper of industrial firms and financial institutions are rated investment grade by nationally recognized rating agencies. Concentrations of credit risk with respect to trade receivables are limited because a large number of geographically diverse customers make up our customer base, thus spreading the trade receivables credit risk. We control credit risk through monitoring procedures. Note W - Recent Accounting Pronouncements Adopted Pronouncements In June 2016, the FASB issued ASU No. 2016-13 Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326). The amendments in this ASU introduce broad changes to accounting for credit impairment of financial instruments. The primary updates include the introduction of a new current expected credit loss ("CECL") model that is based on expected rather than incurred losses and amendments to the accounting for impairment of fixed maturity securities available for sale. The method used to measure estimated credit losses for fixed maturity available-for-sale securities will be unchanged from current GAAP; however, the amendments require credit losses to be recognized through an allowance rather than as a reduction to the amortized cost of those securities. We adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost. Results for reporting period beginning after December 15, 2019 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable Generally Accepted Accounting Principles. We adopted this standard using the prospective transition approach for debt securities for which other than temporary impairment had been recognized prior to January 1, 2020. As a result, the amortized cost basis remains the same before and after the effective date of ASC 326. The effective interest rate on these debt securities was not changed. Amounts previously recognized in accumulated other comprehensive income as of January 1, 2020 relating to improvements in cash flows expected to be collected will be accreted into income over the remaining life of the asset. Recoveries of amounts previously written off relating to improvements in cash flows after January 1, 2020 will be recorded in earnings when received . See Note E Investments for further discussion of the adoption as it relates to our fixed maturity securities available for sale. In December 2019, the FASB issued ASU 2019-12 Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740), which simplifies various aspects of the income tax accounting guidance and will be applied using different approaches depending on what the specific amendment relates to and, for public entities, are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. We adopted this standard as of January 1, 2021, and it had no impact on our Consolidated Financial Statements upon adoption. 162 Table of Contents In October 2020, the FASB issued ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables - Nonrefundable Fees and Other Costs. The amendments in this update clarify that callable debt securities should be re-evaluated each reporting period to determine if the amortized cost exceeds the amount repayable by the issuer at the next earliest call date, and, if so, the excess should be amortized to the next call date. We adopted this standard as of January 1, 2021 and are applying this guidance on a prospective basis. This standard had no impact on our Consolidated Financial Statements upon adoption. Pronouncements Not Yet Adopted In August 2018, the FASB issued ASU 2018-12, Financial Services-Insurance (Topic 944), Targeted Improvements to the Accounting for Long-Duration Contracts, as clarified and amended by ASU 2019-09, Financial Services-Insurance: Effective Date and ASU 2020-11, Financial Services-Insurance: Effective Date and Early Application, effective for fiscal years beginning after December 15, 2022 including interim periods within those fiscal years. This update introduced the following requirements: assumptions used to measure cash flows for traditional and limited-payment contracts must be reviewed at least annually with the effect of changes in those assumptions being recognized in the statement of operations; the discount rate applied to measure the liability for future policy benefits and limited-payment contracts must be updated at each reporting date with the effect of changes in the rate being recognized in other comprehensive income (“OCI”); market risk benefits ("MRBs") associated with deposit contracts must be measured at fair value, with the effect of the change in the fair value recognized in earnings, except for the change attributable to instrument-specific credit risk which is recognized in OCI; deferred acquisition costs are no longer required to be amortized in proportion to premiums, gross profits, or gross margins; instead, those balances must be amortized on a constant level basis over the expected term of the related contracts; deferred acquisition costs must be written off for unexpected contract terminations; and disaggregated rollforwards of beginning to ending balances of the liability for future policy benefits, policyholder account balances, MRBs, separate account liabilities and deferred acquisition costs, as well as information about significant inputs, judgments, assumptions, and methods used in measurement are required to be disclosed. The amendments in this ASU may be early adopted as of the beginning of an annual reporting period for which financial statements have not yet been issued, including interim financial statements. We have identified specific areas that will be impacted by the new guidance. This guidance will bring significant changes to how we account for certain insurance and annuity products within our business and expand disclosures. As part of the implementation process, to date our progress includes, but is not limited to the following: identifying and documenting contracts and contract features in scope of the guidance; identifying actuarial models, systems, and processes to be updated; building and running models; generating and analyzing preliminary output; evaluating and finalizing key accounting policies; evaluating transition requirements and impacts; and establishing, documenting, and executing appropriate internal controls. We will not early adopt this standard and have selected the full retrospective transition method, which requires the new guidance be applied as of the beginning of the earliest period presented or January 1, 2021, referred to as the transition date. Adoption of this standard is expected to increase total stockholders’ equity as of the transition date, January 1, 2021, up to approximately $ 200 million, net of tax. This transition adjustment is expected to primarily increase Retained Earnings, as well as OCI. The most significant driver of this transition adjustment expected to increase Retained Earnings is the measurement of certain benefits historically recorded as insurance liabilities which will now be classified and measured as MRBs, along with their subsequent changes in fair value, excluding changes attributable to instrument-specific credit risk, which are recorded as a component of OCI. The most significant drivers of this transition adjustment expected to increase OCI are the reversal of intangible balances previously recorded as an adjustment to unrealized gains (losses) on available for sale securities, the remeasurement of the liability for future policyholder benefits using a discount rate assumption that reflects upper-medium grade fixed-income instruments, and the effect of changes in the fair value of MRBs attributable to changes in the instrument-specific credit risk. As of December 31, 2022, the Company continues to expect the measurement drivers above, in relation to the current market conditions, to support a favorable impact to total stockholders’ equity at or greater than the transition impact, contingent upon the completion of our ongoing implementation process. Further, the specific impacts on Retained Earnings and OCI upon adoption of this standard on January 1, 2023 may also differ materially from the transition impact based on the performance of the Company’s business and macroeconomic conditions, including changes in interest rates. In March 2022, the FASB issued ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The amendments in this update eliminate the Troubled Debt Restructuring ("TDR") recognition and measurement guidance for creditors and, instead, require that an entity evaluate whether the modification represents a new loan or a continuation of an existing loan. The amendments also enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. Additionally, these amendments require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investment in leases within the scope of Subtopic 326-20. The guidance is effective for entities that have adopted ASU 2016-13 Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326) for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, though early adoption is permitted. We do not expect this guidance to have a material impact on our Consolidated Financial Statements and related disclosures upon adoption. We do not currently plan to early adopt this standard. In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in this update affect all entities that have investments in equity securities measured at fair value that are subject to a contractual sale restriction and clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not 163 Table of Contents considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. Additionally, the amendments require the following disclosures for equity securities subject to contractual sale restrictions: the fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet, the nature and remaining duration of the restriction(s), and the circumstances that could cause a lapse in the restriction(s). The amendments in this update do not change the principles of fair value measurement, rather, they clarify those principles when measuring the fair value of an equity security subject to a contractual sale restriction and improve current GAAP by reducing diversity in practice, reducing the cost and complexity in measuring fair value, and increasing comparability of financial information across reporting entities that hold those investments. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, though early adoption is permitted. We do not currently expect to early adopt this standard and are in the process of assessing this standard and its impact on our accounting and disclosures. Note X — Net Income Attributable to FNF Common Shareholders and Change in Total Equity On December 1, 2022, we completed the F&G Distribution. For further information related to the F&G Distribution, refer to Note A Business and Summary of Significant Accounting Policies . On July 29, 2020, we purchased for $ 90 million the outstanding Class A units of ServiceLink held by its minority owners. As of the purchase date, ServiceLink is a wholly owned subsidiary of FNF. For further information related to the purchase of the outstanding Class A units of ServiceLink held by its minority owners, refer to Note A Business and Summary of Significant Accounting Policies . The following table presents the effect of the change in our ownership percentage in F&G and ServiceLink on equity attributable to FNF: Year ended December 31, 2022 2021 2020 (In millions) Net earnings attributable to FNF common shareholders $ 1,136 $ 2,422 $ 1,427 Decrease in additional paid-in capital for decrease in ownership of F&G ( 19 ) — — Decrease in retained earnings for decrease in ownership of F&G ( 301 ) — — Increase in accumulated comprehensive earnings for decrease in ownership of F&G 29 — — Increase in additional paid-in capital for increase in ownership percentage in ServiceLink — — 211 Decrease in noncontrolling interests resulting from increased ownership in ServiceLink — — 47 Net transfers (to) from noncontrolling interests ( 291 ) — 258 Change in net earnings and equity attributable to FNF common shareholders $ 845 $ 2,422 $ 1,685 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.