Business Context and Reporting Period
This Form 8-K was filed by Fidelity National Financial, Inc. (FNF) on July 13, 2023. The report primarily concerns FNF's majority-owned subsidiary, F&G Annuities & Life, Inc. (F&G). The filing addresses updates to financial reporting methodologies and accounting standards for the first quarter ended March 31, 2023, and the fiscal year ended December 31, 2022.
Key Financial Metrics
This filing does not contain specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. Instead, it discloses changes to the calculation methodologies for non-GAAP financial measures, specifically:
- Adjusted Net Earnings (ANE)
- Adjusted Net Earnings per Diluted Share
- Adjusted Return on Average Equity (excluding accumulated other comprehensive income)
- Adjusted Return on Assets
The filing notes that F&G has restated all periods presented in its prior March 31, 2023 quarterly financial supplement to reflect these changes.
Material Changes Versus Prior Period
Two significant accounting and reporting changes are disclosed:
- Methodology Update for Non-GAAP Measures: F&G updated its methodology for calculating the market-related liability adjustment included in Adjusted Net Earnings (ANE). This change impacts other derived non-GAAP measures and required the restatement of prior periods presented in the March 31, 2023 supplement.
- Adoption of ASU 2018-12: F&G adopted Accounting Standards Update 2018-12 (Targeted Improvements to the Accounting for Long-Duration Contracts) effective January 1, 2023, with a transition date of January 1, 2021. The company elected the full retrospective transition method. Balances for liability for future policy benefits, deferred acquisition costs (DAC), value of business acquired, deferred sales inducements, unearned revenue liabilities, and market risk benefits were adjusted to conform to the new standard starting June 1, 2020.
Guidance, Outlook, and Management Commentary
The filing does not provide new forward-looking guidance or management commentary regarding future operational performance. The primary purpose is to disclose the availability of updated investor presentations and financial supplements reflecting the accounting changes. Management directs investors to the F&G Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, for significant developments occurring after the 2022 Annual Report.
Important Facts for Investor Verification
- Verify the specific numerical impact of the ASU 2018-12 adoption and the ANE methodology change by reviewing the updated F&G Financial Supplement (Exhibit 99.2) and the updated 2022 Annual Report sections (Exhibit 99.1).
- Confirm that the restated periods in the March 31, 2023 supplement align with the new non-GAAP calculation methodology.
- Note that the information furnished in this 8-K is not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, except as expressly incorporated by reference.
- Review the updated Spring 2023 Investor Presentation (Exhibit 99.3) for the most current management perspective on the subsidiary's performance.