| | | | | | | ||
| Chinh E. Chu Co-Executive Chairman |
| | | | | William P. Foley, II Co-Executive Chairman |
|
| | | | | | | ||
| | | | | | | ||
| Chinh E. Chu Co-Executive Chairman |
| | | | | William P. Foley, II Co-Executive Chairman |
|
| | | | | 1 | | | |
| | | | | 4 | | | |
| | | | | 12 | | | |
| | | | | 29 | | | |
| | | | | 50 | | | |
| | | | | 52 | | | |
| | | | | 53 | | | |
| | | | | 57 | | | |
| | | | | 59 | | | |
| | | | | 79 | | | |
| | | | | 96 | | | |
| | | | | 97 | | | |
| | | | | 98 | | | |
| | | | | 102 | | | |
| | | | | 171 | | | |
| | | | | 173 | | | |
| | | | | 174 | | | |
| | | | | 175 | | | |
| | | | | 176 | | | |
| | | | | 177 | | | |
| | | | | 180 | | | |
| | | | | 181 | | | |
| | | | | 182 | | | |
| | | | | 184 | | | |
| | | | | 185 | | | |
| | | | | 186 | | | |
| | | | | 191 | | | |
| | | | | 197 | | | |
| | | | | 198 | | | |
| | | | | 200 | | | |
| | | | | 208 | | | |
| | | | | 212 | | | |
| | | | | 212 | | | |
| | | | | 212 | | | |
| | | | | F-1 | | | |
| | | | | A-1 | | | |
| | | | | B-1 | | | |
| | | | | C-1 | | | |
| | | | | D-1 | | |
| | |
For the Three Months
Ended March 31, 2017 |
| |
For the period from
February 26, 2016 (inception) To December 31, 2016 |
| ||||||
Statement of Operations Data: | | | | ||||||||||
General and administrative expenses
|
| | | $ | 406,411 | | | | | $ | 1,167,249 | | |
Loss from operations
|
| | | | (406,411) | | | | | | (1,167,249) | | |
Interest income
|
| | | | 465,131 | | | | | | 887,027 | | |
Net income (loss)
|
| | | $ | 58,720 | | | | | $ | (280,222) | | |
Weighted average shares outstanding(1) | | | | ||||||||||
Basic(2) | | | | | 19,933,292 | | | | | | 18,560,652 | | |
Diluted
|
| | | | 84,000,000 | | | | | | 18,560,652 | | |
Net earnings (loss) per share | | | | ||||||||||
Basic
|
| | | $ | 0.00 | | | | | $ | (0.02) | | |
Diluted
|
| | | $ | 0.00 | | | | | $ | (0.02) | | |
|
| | |
As of
March 31, 2017 |
| |
As of
December 31, 2016 |
| ||||||
| | |
(unaudited)
|
| | ||||||||
Balance Sheet Data: | | | | ||||||||||
Assets | | | | ||||||||||
Current assets: | | | | ||||||||||
Cash and cash equivalents
|
| | | $ | 805,053 | | | | | $ | 1,016,157 | | |
Prepaid expenses
|
| | | | 94,954 | | | | | | 96,381 | | |
Total current assets
|
| | | | 900,007 | | | | | | 1,112,538 | | |
Investments and cash equivalents held in Trust Account
|
| | | | 691,352,158 | | | | | | 690,887,027 | | |
Total Assets
|
| | | $ | 692,252,165 | | | | | $ | 691,999,565 | | |
Liabilities and Shareholders’ Equity | | | | ||||||||||
Current liabilities:
|
| | | ||||||||||
Accounts payable and accrued expenses
|
| | | $ | 497,051 | | | | | $ | 491,765 | | |
Accounts payable – related party
|
| | | | 100,000 | | | | | | 70,000 | | |
Due to related parties
|
| | | | 225,733 | | | | | | 225,733 | | |
Total current liabilities
|
| | | | 822,784 | | | | | | 787,498 | | |
Accrued legal and printer costs
|
| | | | 1,154,228 | | | | | | 995,634 | | |
Deferred underwriting commissions and placement agent fees
|
| | | | 44,550,000 | | | | | | 44,550,000 | | |
Total Liabilities
|
| | | | 46,527,012 | | | | | | 46,333,132 | | |
Commitments | | | | ||||||||||
Class A ordinary shares subject to possible redemption, $0.0001 par value; 64,072,515 and 64,066,643 shares at redemption value at March 31, 2017 and December 31, 2016, respectively
|
| | | | 640,725,150 | | | | | | 640,666,430 | | |
Shareholders’ Equity: | | | | ||||||||||
Preferred shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding at March 31, 2017 and December 31, 2016
|
| | | | — | | | | | | — | | |
Class A ordinary shares, $0.0001 par value; 400,000,000 shares
authorized; 4,927,485 and 4,933,357 issued and outstanding (excluding 64,072,515 and 64,066,643 shares subject to possible redemption) at March 31, 2017 and December 31, 2016, respectively |
| | | | 493 | | | | | | 493 | | |
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized;
15,000,000 shares issued and outstanding at March 31, 2017 and December 31, 2016 |
| | | | 1,500 | | | | | | 1,500 | | |
Additional paid-in capital
|
| | | | 5,219,512 | | | | | | 5,278,232 | | |
Accumulated deficit
|
| | | | (221,502) | | | | | | (280,222) | | |
Total Shareholders’ Equity
|
| | | | 5,000,003 | | | | | | 5,000,003 | | |
Total Liabilities and Shareholders’ Equity
|
| | | $ | 692,252,165 | | | | | $ | 691,999,565 | | |
|
| | |
Six Months Ended March 31,
|
| |
Year Ended September 30,
|
| ||||||||||||||||||||||||||||||||||||
(In millions, except share data)
|
| |
2017
|
| |
2016
|
| |
2016
|
| |
2015
|
| |
2014
|
| |
2013
|
| |
2012
|
| |||||||||||||||||||||
SUMMARY OF OPERATIONS
|
| | | | | | | | |||||||||||||||||||||||||||||||||||
Total operating revenues
|
| | | $ | 715 | | | | | $ | 562 | | | | | $ | 1,139 | | | | | $ | 961 | | | | | $ | 1,191 | | | | | $ | 1,347 | | | | | $ | 1,222 | | |
Total benefits and expenses
|
| | | | 505 | | | | | | 462 | | | | | | 964 | | | | | | 755 | | | | | | 979 | | | | | | 827 | | | | | | 1,062 | | |
Net income
|
| | | $ | 130 | | | | | $ | 57 | | | | | $ | 97 | | | | | $ | 118 | | | | | $ | 163 | | | | | $ | 348 | | | | | $ | 344 | | |
PER SHARE DATA(a) | | | | | | | | | |||||||||||||||||||||||||||||||||||
Net income per common share – basic
|
| | | $ | 2.23 | | | | | $ | 0.98 | | | | | $ | 1.67 | | | | | $ | 2.03 | | | | | $ | 2.91 | | | | | $ | 7.40 | | | | | $ | 7.32 | | |
Net income per common share – diluted
|
| | | | 2.23 | | | | | | 0.98 | | | | | | 1.66 | | | | | | 2.02 | | | | | | 2.90 | | | | | | 7.40 | | | | | | 7.32 | | |
Cash dividends declared per common share(b)
|
| | | | 0.13 | | | | | | 0.13 | | | | | | 0.26 | | | | | | 0.26 | | | | | | 1.11 | | | | | | 1.99 | | | | | | 0.85 | | |
Common shares outstanding
|
| | | | 58.99 | | | | | | 58.96 | | | | | | 59.0 | | | | | | 58.9 | | | | | | 58.4 | | | | | | 47.0 | | | | | | 47.0 | | |
BALANCE SHEET DATA | | | | | | | | | |||||||||||||||||||||||||||||||||||
Total investments
|
| | | $ | 21,813 | | | | | $ | 19,580 | | | | | $ | 21,025 | | | | | $ | 19,094 | | | | | $ | 18,802 | | | | | $ | 16,223 | | | | | $ | 16,557 | | |
Total assets
|
| | | | 27,897 | | | | | | 25,499 | | | | | | 27,035 | | | | | | 24,925 | | | | | | 24,153 | | | | | | 22,403 | | | | | | 20,990 | | |
Debt
|
| | | | 405 | | | | | | 300 | | | | | | 400 | | | | | | 300 | | | | | | 300 | | | | | | 300 | | | | | | — | | |
Total liabilities
|
| | | | 25,989 | | | | | | 23,988 | | | | | | 25,101 | | | | | | 23,423 | | | | | | 22,494 | | | | | | 21,264 | | | | | | 19,700 | | |
Total equity
|
| | | | 1,908 | | | | | | 1,511 | | | | | | 1,934 | | | | | | 1,502 | | | | | | 1,659 | | | | | | 1,139 | | | | | | 1,291 | | |
Book value per share
|
| | | $ | 32.34 | | | | | $ | 25.36 | | | | | $ | 32.80 | | | | | $ | 25.51 | | | | | $ | 28.39 | | | | | $ | 24.23 | | | | | $ | 27.46 | | |
| | |
Combined Pro Forma
|
| |||||||||
| | |
Assuming No
Redemptions |
| |
Assuming
Maximum Redemptions |
| ||||||
| | |
(in millions, except share and per share data)
|
| |||||||||
Selected Unaudited Pro Forma Condensed Combined Statement of Operations
|
| | | ||||||||||
Three Months Ended March 31, 2017 | | | | ||||||||||
Revenue
|
| | | $ | 311 | | | | | $ | 311 | | |
Net earnings per share – basic
|
| | | $ | 0.30 | | | | | $ | 0.31 | | |
Net earnings per share – diluted
|
| | | $ | 0.28 | | | | | $ | 0.28 | | |
Weighted average shares outstanding – basic
|
| | | | 206,000,000 | | | | | | 140,000,000 | | |
Weighted average shares outstanding – diluted
|
| | | | 214,362,684 | | | | | | 151,169,016 | | |
Selected Unaudited Pro Forma Combined Balance Sheet Data as of March 31, 2017
|
| | | ||||||||||
Total assets
|
| | | $ | 28,071 | | | | | $ | 27,877 | | |
Total liabilities
|
| | | $ | 26,000 | | | | | $ | 26,008 | | |
Total preferred shares
|
| | | $ | 367 | | | | | $ | 818 | | |
Total equity
|
| | | $ | 1,704 | | | | | $ | 1,051 | | |
Selected Unaudited Pro Forma Condensed Combined Statement of Operations
|
| | | ||||||||||
Year Ended December 31, 2016 | | | | ||||||||||
Revenue
|
| | | $ | 1,295 | | | | | $ | 1,295 | | |
Net earnings (loss) per share – basic
|
| | | $ | 0.12 | | | | | $ | (0.33) | | |
Net earnings (loss) per share – diluted
|
| | | $ | 0.11 | | | | | $ | (0.33) | | |
Weighted average shares outstanding – basic
|
| | | | 206,000,000 | | | | | | 140,000,000 | | |
Weighted average shares outstanding – diluted
|
| | | | 214,362,684 | | | | | | 151,169,016 | | |
| | |
For the Year Ended December 31, 2016
|
| |||||||||||||||||||||||||||||||||
Reconciliation from historical net income to pro forma AOI
|
| |
CF Corp.
(Historical as of December 31, 2016) |
| |
FGL
(Historical as of September 30, 2016) |
| |
FSR
(Historical as of September 30, 2016) |
| |
Combined
(Historical) |
| |
Pro Forma
Adjustments (Assuming No Redemption) |
| |
Combined
Pro Forma (Assuming No Redemption) |
| ||||||||||||||||||
| | |
(in millions)
|
| |||||||||||||||||||||||||||||||||
Net income
|
| | | $ | — | | | | | $ | 97 | | | | | $ | (19) | | | | | $ | 78 | | | | | $ | (25)(a) | | | | | $ | 53 | | |
Adjustments to arrive at pro forma AOI: | | | | | | | | ||||||||||||||||||||||||||||||
Effect of investment losses (gains), net of offsets
|
| | | | — | | | | | | 9 | | | | | | — | | | | | | 9 | | | | | | 1(b) | | | | | | 10 | | |
Effect of change in FIA embedded derivative discount rate, net of offsets
|
| | | | — | | | | | | 54 | | | | | | — | | | | | | 54 | | | | | | (24)(c) | | | | | | 30 | | |
Effect of change in fair value of reinsurance related embedded derivative, net of offsets
|
| | | | — | | | | | | 37 | | | | | | — | | | | | | 37 | | | | | | (37)(d) | | | | | | — | | |
Effect of class action litigation reserves, net of offsets
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Tax impact of adjusting items
|
| | | | — | | | | | | (35) | | | | | | — | | | | | | (35) | | | | | | 21(e) | | | | | | (14) | | |
Pro forma AOI
|
| | | $ | — | | | | | $ | 162 | | | | | $ | (19) | | | | | $ | 143 | | | | | $ | (64) | | | | | $ | 79 | | |
|
| | |
For the Three Months Ended March 31, 2017
|
| |||||||||||||||||||||||||||||||||
Reconciliation from historical net income to pro forma AOI
|
| |
CF Corp.
(Historical as of March 31, 2017) |
| |
FGL
(Historical as of December 31, 2016) |
| |
FSR
(Historical as of December 31, 2016) |
| |
Combined
(Historical) |
| |
Pro Forma
Adjustments (Assuming No Redemption) |
| |
Combined
Pro Forma (Assuming No Redemption) |
| ||||||||||||||||||
| | |
(in millions)
|
| |||||||||||||||||||||||||||||||||
Net income
|
| | | $ | — | | | | | $ | 108 | | | | | $ | (15) | | | | | $ | 93 | | | | | $ | (25)(a) | | | | | $ | 68 | | |
Adjustments to arrive at pro forma AOI: | | | | | | | | ||||||||||||||||||||||||||||||
Effect of investment losses (gains), net of offsets
|
| | | | — | | | | | | (1) | | | | | | — | | | | | | (1) | | | | | | 1(b) | | | | | | — | | |
Effect of change in FIA embedded derivative discount rate, net of offsets
|
| | | | — | | | | | | (92) | | | | | | — | | | | | | (92) | | | | | | 40(c) | | | | | | (52) | | |
Effect of change in fair value of reinsurance related embedded derivative, net of offsets
|
| | | | — | | | | | | (10) | | | | | | — | | | | | | (10) | | | | | | 10(d) | | | | | | — | | |
Effect of class action litigation reserves, net of offsets
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Tax impact of adjusting items
|
| | | | — | | | | | | 36 | | | | | | — | | | | | | 36 | | | | | | (18)(e) | | | | | | 18 | | |
Pro forma AOI
|
| | | $ | — | | | | | $ | 41 | | | | | $ | (15) | | | | | $ | 26 | | | | | $ | 8 | | | | | $ | 34 | | |
|
| | |
As of March 31, 2017
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
As of
March 31, 2017 |
| | | | | | | |
As of
March 31, 2017 |
| | |||||||||||||||||||||||
| | |
CF Corp.
(Historical) |
| |
FGL
(Historical) |
| |
FSR
(Historical) |
| |
Combined
|
| |
Purchase
Accounting Adjustments |
| |
Intercompany
Eliminations(c) |
| |
Pro Forma
Adjustments (Assuming No Redemption) |
| |
Combined
Pro Forma (Assuming No Redemption) |
| |
Additional
Pro Forma Adjustments (Assuming Maximum Redemption) |
| |
Combined
Pro Forma (Assuming Maximum Redemption) |
| | ||||||||||||||||||||||||||||||||
| | |
(in millions)
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments: | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed maturity securities,
available-for-sale, at fair value |
| | | $ | — | | | | | $ | 20,052 | | | | | $ | — | | | | | $ | 20,052 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 20,052 | | | | | $ | — | | | | | $ | 20,052 | | | | ||
Equity securities,
available-for-sale, at fair value |
| | | | — | | | | | | 712 | | | | | | — | | | | | | 712 | | | | | | — | | | | | | — | | | | | | — | | | | | | 712 | | | | | | — | | | | | | 712 | | | | ||
Derivative investments
|
| | | | — | | | | | | 351 | | | | | | — | | | | | | 351 | | | | | | — | | | | | | — | | | | | | — | | | | | | 351 | | | | | | — | | | | | | 351 | | | | ||
Commercial mortgage loans
|
| | | | — | | | | | | 579 | | | | | | — | | | | | | 579 | | | | | | (3)(b) | | | | | | — | | | | | | — | | | | | | 576 | | | | | | — | | | | | | 576 | | | | ||
Other invested assets
|
| | | | — | | | | | | 119 | | | | | | — | | | | | | 119 | | | | | | (4)(b) | | | | | | — | | | | | | — | | | | | | 115 | | | | | | — | | | | | | 115 | | | | ||
Related party investments
|
| | | | — | | | | | | — | | | | | | 95 | | | | | | 95 | | | | | | — | | | | | | (3) | | | | | | — | | | | | | 92 | | | | | | — | | | | | | 92 | | | | ||
Total investments
|
| | | | — | | | | | | 21,813 | | | | | | 95 | | | | | | 21,908 | | | | | | (7) | | | | | | (3) | | | | | | — | | | | | | 21,898 | | | | | | — | | | | | | 21,898 | | | | ||
Related party loans
|
| | | | — | | | | | | 71 | | | | | | — | | | | | | 71 | | | | | | — | | | | | | (71) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Funds withheld receivable
|
| | | | — | | | | | | — | | | | | | 1,626 | | | | | | 1,626 | | | | | | — | | | | | | (930) | | | | | | — | | | | | | 696 | | | | | | — | | | | | | 696 | | | | ||
Cash and cash equivalents
|
| | | | 1 | | | | | | 887 | | | | | | 25 | | | | | | 913 | | | | | | (1,903)(a) | | | | | | — | | | | | | 691(f) | | | | | | 1,081 | | | | | | (460)(n) | | | | | | 887 | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (2)(g) | | | | | | | | | | | | 458(o) | | | | | |||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (7)(h) | | | | | | | | | | | | (200)(q) | | | | | |||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 367(i) | | | | | | | | | | | | 8(r) | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 510(j) | | | | | | | | | | | | | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 334(k) | | | | | | | | | | | | | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (45)(l) | | | | | | | | | | | | | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (20)(m) | | | | | | | | | | | | | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 200(p) | | | | | | | | | | | | | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 43(r) | | | | | | | | | | | | | | | | | | | | | | ||
Prepaid expenses
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Accrued investment income
|
| | | | — | | | | | | 225 | | | | | | — | | | | | | 225 | | | | | | — | | | | | | — | | | | | | — | | | | | | 225 | | | | | | — | | | | | | 225 | | | | ||
Reinsurance recoverable
|
| | | | — | | | | | | 3,426 | | | | | | — | | | | | | 3,426 | | | | | | (63)(b) | | | | | | (1,004) | | | | | | — | | | | | | 2,359 | | | | | | — | | | | | | 2,359 | | | | ||
Intangibles, net
|
| | | | — | | | | | | 1,184 | | | | | | — | | | | | | 1,184 | | | | | | 402(b) | | | | | | — | | | | | | — | | | | | | 1,586 | | | | | | — | | | | | | 1,586 | | | | ||
Deferred tax assets
|
| | | | — | | | | | | 87 | | | | | | — | | | | | | 87 | | | | | | (51)(d) | | | | | | — | | | | | | — | | | | | | 36 | | | | | | — | | | | | | 36 | | | | ||
Goodwill
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 79(b) | | | | | | — | | | | | | — | | | | | | 79 | | | | | | — | | | | | | 79 | | | | ||
Income taxes receivable
|
| | | | — | | | | | | — | | | | | | 8 | | | | | | 8 | | | | | | — | | | | | | — | | | | | | — | | | | | | 8 | | | | | | — | | | | | | 8 | | | | ||
Investments and cash equivalents held in Trust Account
|
| | | | 691 | | | | | | — | | | | | | — | | | | | | 691 | | | | | | — | | | | | | — | | | | | | (691)(f) | | | | | | — | | | | | | — | | | | | | — | | | | ||
Other assets
|
| | | | — | | | | | | 204 | | | | | | 23 | | | | | | 227 | | | | | | (5)(b) | | | | | | (119) | | | | | | — | | | | | | 103 | | | | | | — | | | | | | 103 | | | | ||
Total assets
|
| | | $ | 692 | | | | | $ | 27,897 | | | | | $ | 1,777 | | | | | $ | 30,366 | | | | | $ | (1,548) | | | | | $ | (2,127) | | | | | $ | 1,380 | | | | | $ | 28,071 | | | | | $ | (194) | | | | | $ | 27,877 | | | | ||
|
| | |
As of March 31, 2017
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
As of
March 31, 2017 |
| | | | | | | |
As of
March 31, 2017 |
| | |||||||||||||||||||||||
| | |
CF Corp
(Historical) |
| |
FGL
(Historical) |
| |
FSR
(Historical) |
| |
Combined
|
| |
Purchase
Accounting Adjustments |
| |
Intercompany
Eliminations(c) |
| |
Pro Forma
Adjustments (Assuming No Redemption) |
| |
Combined
Pro Forma (Assuming No Redemption) |
| |
Additional
Pro Forma Adjustments (Assuming Maximum Redemption) |
| |
Combined
Pro Forma (Assuming Maximum Redemption) |
| | ||||||||||||||||||||||||||||||||
| | |
(in millions)
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities and shareholders’ equity | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts payable and accrued expenses
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | ||
Accounts payable – related party
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Due to related parties
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Accrued legal and printer costs
|
| | | | 1 | | | | | | — | | | | | | — | | | | | | 1 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1 | | | | | | — | | | | | | 1 | | | | ||
Deferred underwriting commissions
and placement agent fees |
| | | | 45 | | | | | | — | | | | | | — | | | | | | 45 | | | | | | — | | | | | | — | | | | | | (45)(l) | | | | | | — | | | | | | — | | | | | | — | | | | ||
Contractholder funds
|
| | | | — | | | | | | 20,052 | | | | | | — | | | | | | 20,052 | | | | | | 448(b) | | | | | | — | | | | | | — | | | | | | 20,500 | | | | | | — | | | | | | 20,500 | | | | ||
Future policy benefits
|
| | | | — | | | | | | 3,435 | | | | | | — | | | | | | 3,435 | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,435 | | | | | | — | | | | | | 3,435 | | | | ||
Funds witheld for reinsurance liabilities
|
| | | | — | | | | | | 1,134 | | | | | | — | | | | | | 1,134 | | | | | | — | | | | | | (1,123) | | | | | | — | | | | | | 11 | | | | | | — | | | | | | 11 | | | | ||
Liability for policy and contract claims
|
| | | | — | | | | | | 60 | | | | | | — | | | | | | 60 | | | | | | — | | | | | | — | | | | | | — | | | | | | 60 | | | | | | — | | | | | | 60 | | | | ||
Insurance reserves
|
| | | | — | | | | | | — | | | | | | 1,665 | | | | | | 1,665 | | | | | | — | | | | | | (1,004) | | | | | | — | | | | | | 661 | | | | | | — | | | | | | 661 | | | | ||
Debt
|
| | | | — | | | | | | 300 | | | | | | — | | | | | | 300 | | | | | | 1(b) | | | | | | — | | | | | | — | | | | | | 301 | | | | | | — | | | | | | 301 | | | | ||
Revolving credit facility
|
| | | | — | | | | | | 105 | | | | | | — | | | | | | 105 | | | | | | — | | | | | | — | | | | | | 43(r) | | | | | | 148 | | | | | | 8(r) | | | | | | 156 | | | | ||
Other liabilities
|
| | | | — | | | | | | 903 | | | | | | 11 | | | | | | 914 | | | | | | (24)(b) | | | | | | — | | | | | | (7)(h) | | | | | | 883 | | | | | | — | | | | | | 883 | | | | ||
Total liabilities
|
| | | | 46 | | | | | | 25,989 | | | | | | 1,676 | | | | | | 27,711 | | | | | | 425 | | | | | | (2,127) | | | | | | (9) | | | | | | 26,000 | | | | | | 8 | | | | | | 26,008 | | | | ||
Mezzanine equity | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred shares
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 367(i) | | | | | | 367 | | | | | | 451(o) | | | | | | 818 | | | | ||
Commitments | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A ordinary shares subject to possible redemption,
|
| | | | 641 | | | | | | — | | | | | | — | | | | | | 641 | | | | | | — | | | | | | — | | | | | | (641)(f) | | | | | | — | | | | | | — | | | | | | — | | | | ||
Shareholders’ equity | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred shares
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Common stock
|
| | | | — | | | | | | 1 | | | | | | — | | | | | | 1 | | | | | | (1)(e) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Class A ordinary shares
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Class B ordinary shares
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Additional paid in capital
|
| | | | 5 | | | | | | 715 | | | | | | 178 | | | | | | 898 | | | | | | (893)(e) | | | | | | — | | | | | | 641(f) | | | | | | 1,690 | | | | | | (439)(n) | | | | | | 1,051 | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 510(j) | | | | | | | | | | | | (200)(q) | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 334(k) | | | | | | | | | | | | | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 200(p) | | | | | | | | | | | | | | | | | | | | | | ||
Retained earnings (accumulated deficit)
|
| | | | — | | | | | | 914 | | | | | | (77) | | | | | | 837 | | | | | | 36(b) | | | | | | — | | | | | | (2)(g) | | | | | | 14 | | | | | | (21)(n) | | | | | | — | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | (837)(e) | | | | | | | | | | | | (20) (m) | | | | | | | | | | | | 7(o) | | | | | |||||||
Accumulated other comprehensive
income |
| | | | — | | | | | | 291 | | | | | | — | | | | | | 291 | | | | | | (291)(e) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Treasury stock
|
| | | | — | | | | | | (13) | | | | | | — | | | | | | (13) | | | | | | 13(e) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Total shareholders’ equity
|
| | | | 5 | | | | | | 1,908 | | | | | | 101 | | | | | | 2,014 | | | | | | (1,973) | | | | | | — | | | | | | 1,663 | | | | | | 1,704 | | | | | | (653) | | | | | | 1,051 | | | | ||
Total liabilities, mezzanine equity and shareholders’ equity
|
| | | $ | 692 | | | | | $ | 27,897 | | | | | $ | 1,777 | | | | | $ | 30,366 | | | | | $ | (1,548) | | | | | $ | (2,127) | | | | | $ | 1,380 | | | | | $ | 28,071 | | | | | $ | (194) | | | | | $ | 27,877 | | | | ||
|
| | |
For the
period from February 26, 2016 (Inception) to December 31, 2016 |
| |
For the Year Ended
September 30, 2016 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
For the
Year Ended December 31, 2016 |
| | | | | | | |
For the
Year Ended December 31, 2016 |
| ||||||||||||||||||
| | |
CF Corp.
(Historical) |
| |
FGL
(Historical) |
| |
FSR
(Historical) |
| |
Combined
|
| |
Purchase
Accounting Adjustments |
| |
Intercompany
Eliminations(dd) |
| |
Pro Forma
Adjustments (Assuming No Redemption) |
| |
Combined
Pro Forma (Assuming No Redemption) |
| |
Additional
Pro Forma Adjustments (Assuming Maximum Redemption) |
| |
Combined
Pro Forma (Assuming Maximum Redemption) |
| ||||||||||||||||||||||||||||||
| | |
(in millions, except share and per share data)
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues: | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||
Premiums
|
| | | $ | — | | | | | $ | 70 | | | | | $ | — | | | | | $ | 70 | | | | | $ | — | | | | | $ | 3 | | | | | $ | — | | | | | $ | 73 | | | | | $ | — | | | | | $ | 73 | | |
Net investment income
|
| | | | — | | | | | | 923 | | | | | | 2 | | | | | | 925 | | | | | | (13)(ee) | | | | | | 61 | | | | | | — | | | | | | 973 | | | | | | — | | | | | | 973 | | |
Net investment gains
|
| | | | — | | | | | | 19 | | | | | | 148 | | | | | | 167 | | | | | | — | | | | | | (57) | | | | | | — | | | | | | 110 | | | | | | — | | | | | | 110 | | |
Insurance and investment product fees and other
|
| | | | — | | | | | | 127 | | | | | | — | | | | | | 127 | | | | | | — | | | | | | 3 | | | | | | 9(ff) | | | | | | 139 | | | | | | — | | | | | | 139 | | |
Total revenues
|
| | | | — | | | | | | 1,139 | | | | | | 150 | | | | | | 1,289 | | | | | | (13) | | | | | | 10 | | | | | | 9 | | | | | | 1,295 | | | | | | — | | | | | | 1,295 | | |
Benefits and expenses: | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves
|
| | | | — | | | | | | 791 | | | | | | 153 | | | | | | 944 | | | | | | (46)(gg) | | | | | | (50) | | | | | | — | | | | | | 848 | | | | | | — | | | | | | 848 | | |
Acquisition and operating expenses, net of
deferrals |
| | | | 1 | | | | | | 119 | | | | | | 10 | | | | | | 130 | | | | | | (2)(bb) | | | | | | — | | | | | | 65(ff) | | | | | | 193 | | | | | | — | | | | | | 193 | | |
Amortization of
intangibles |
| | | | — | | | | | | 54 | | | | | | — | | | | | | 54 | | | | | | 76(aa) | | | | | | — | | | | | | — | | | | | | 130 | | | | | | — | | | | | | 130 | | |
Total benefits and expenses
|
| | | | 1 | | | | | | 964 | | | | | | 163 | | | | | | 1,128 | | | | | | 28 | | | | | | (50) | | | | | | 65 | | | | | | 1,171 | | | | | | — | | | | | | 1,171 | | |
Income (loss) from
operations |
| | | | (1) | | | | | | 175 | | | | | | (13) | | | | | | 161 | | | | | | (41) | | | | | | 60 | | | | | | (56) | | | | | | 124 | | | | | | — | | | | | | 124 | | |
Interest income
|
| | | | 1 | | | | | | — | | | | | | — | | | | | | 1 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1 | | | | | | — | | | | | | 1 | | |
Interest expense
|
| | | | — | | | | | | (22) | | | | | | — | | | | | | (22) | | | | | | — | | | | | | — | | | | | | (2)(hh) | | | | | | (24) | | | | | | — | | | | | | (24) | | |
Income (loss) before income taxes
|
| | | | — | | | | | | 153 | | | | | | (13) | | | | | | 140 | | | | | | (41) | | | | | | 60 | | | | | | (58) | | | | | | 101 | | | | | | — | | | | | | 101 | | |
Income tax (benefit)
expense |
| | | | — | | | | | | 56 | | | | | | 6 | | | | | | 62 | | | | | | (14)(cc) | | | | | | 21 | | | | | | (21)(cc) | | | | | | 48 | | | | | | — | | | | | | 48 | | |
Net income (loss)
|
| | | $ | — | | | | | $ | 97 | | | | | $ | (19) | | | | | $ | 78 | | | | | $ | (27) | | | | | $ | 39 | | | | | $ | (37) | | | | | $ | 53 | | | | | $ | — | | | | | $ | 53 | | |
Weighted average shares outstanding
|
| | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||
Basic
|
| | | | 18,560,652 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
(4)
|
| | | | | 206,000,000 | | | | |
|
(4)
|
| | | | | 140,000,000 | | |
Diluted
|
| | | | 18,560,652 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
(4)
|
| | | | | 214,362,684 | | | | |
|
(4)
|
| | | | | 151,169,016 | | |
Net earnings per share | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||
Basic
|
| | | $ | (0.02) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 0.12 | | | | | | | | | | | $ | (0.33) | | |
Diluted
|
| | | $ | (0.02) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 0.12 | | | | | | | | | | | $ | (0.33) | | |
| | |
For the
Three Months Ended March 31, 2017 |
| |
For the Three Months
Ended December 31, 2016 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
For the
Three Months Ended March 31, 2017 |
| | | | | | | |
For the
Three Months Ended March 31, 2017 |
| ||||||||||||||||||
| | |
CF Corp.
(Historical) |
| |
FGL
(Historical) |
| |
FSR
(Historical) |
| |
Combined
|
| |
Purchase
Accounting Adjustments |
| |
Intercompany
Eliminations(dd) |
| |
Pro Forma
Adjustments (Assuming No Redemption) |
| |
Combined
Pro Forma (Assuming No Redemption) |
| |
Additional
Pro Forma Adjustments (Assuming Maximum Redemption) |
| |
Combined
Pro Forma (Assuming Maximum Redemption) |
| ||||||||||||||||||||||||||||||
| | |
(in millions, except share and per share data)
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues: | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||
Premiums
|
| | | $ | — | | | | | $ | 11 | | | | | $ | — | | | | | $ | 11 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 11 | | | | | $ | — | | | | | $ | 11 | | |
Net investment income
|
| | | | — | | | | | | 240 | | | | | | — | | | | | | 240 | | | | | | (3)(ee) | | | | | | 11 | | | | | | — | | | | | | 248 | | | | | | — | | | | | | 248 | | |
Net investment gains
|
| | | | — | | | | | | 51 | | | | | | (29) | | | | | | 22 | | | | | | — | | | | | | (11) | | | | | | — | | | | | | 11 | | | | | | — | | | | | | 11 | | |
Insurance and investment product fees and other
|
| | | | — | | | | | | 38 | | | | | | — | | | | | | 38 | | | | | | — | | | | | | 1 | | | | | | 2(ff) | | | | | | 41 | | | | | | — | | | | | | 41 | | |
Total revenues
|
| | | | — | | | | | | 340 | | | | | | (29) | | | | | | 311 | | | | | | (3) | | | | | | 1 | | | | | | 2 | | | | | | 311 | | | | | | — | | | | | | 311 | | |
Benefits and expenses: | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in
policy reserves |
| | | | — | | | | | | 20 | | | | | | (16) | | | | | | 4 | | | | | | (5)(gg) | | | | | | 4 | | | | | | — | | | | | | 3 | | | | | | — | | | | | | 3 | | |
Acquisition and operating expenses, net of deferrals
|
| | | | — | | | | | | 28 | | | | | | 2 | | | | | | 30 | | | | | | (1)(bb) | | | | | | — | | | | | | 16(ff) | | | | | | 45 | | | | | | — | | | | | | 45 | | |
Amortization of intangibles
|
| | | | — | | | | | | 123 | | | | | | — | | | | | | 123 | | | | | | 24(aa) | | | | | | — | | | | | | — | | | | | | 147 | | | | | | — | | | | | | 147 | | |
Total benefits and expenses
|
| | | | — | | | | | | 171 | | | | | | (14) | | | | | | 157 | | | | | | 18 | | | | | | 4 | | | | | | 16 | | | | | | 195 | | | | | | — | | | | | | 195 | | |
Income (loss) from operations
|
| | | | — | | | | | | 169 | | | | | | (15) | | | | | | 154 | | | | | | (21) | | | | | | (3) | | | | | | (14) | | | | | | 116 | | | | | | — | | | | | | 116 | | |
Interest income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Interest expense
|
| | | | — | | | | | | (6) | | | | | | — | | | | | | (6) | | | | | | — | | | | | | — | | | | | | — | | | | | | (6) | | | | | | — | | | | | | (6) | | |
Income (loss) before income taxes
|
| | | | — | | | | | | 163 | | | | | | (15) | | | | | | 148 | | | | | | (21) | | | | | | (3) | | | | | | (14) | | | | | | 110 | | | | | | — | | | | | | 110 | | |
Income tax (benefit) expense
|
| | | | — | | | | | | 55 | | | | | | — | | | | | | 55 | | | | | | (7)(cc) | | | | | | (1) | | | | | | (5)(cc) | | | | | | 42 | | | | | | — | | | | | | 42 | | |
Net income (loss)
|
| | | $ | — | | | | | $ | 108 | | | | | $ | (15) | | | | | $ | 93 | | | | | $ | (14) | | | | | $ | (2) | | | | | $ | (9) | | | | | $ | 68 | | | | | $ | — | | | | | $ | 68 | | |
Weighted average shares outstanding
|
| | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||
Basic
|
| | | | 19,933,292 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
(4)
|
| | | | | 206,000,000 | | | | |
|
(4)
|
| | | | | 140,000,000 | | |
Diluted
|
| | | | 84,000,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
(4)
|
| | | | | 214,362,684 | | | | |
|
(4)
|
| | | | | 151,169,016 | | |
Net earnings per share | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||
Basic
|
| | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 0.30 | | | | | | | | | | | $ | 0.31 | | |
Diluted
|
| | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 0.28 | | | | | | | | | | | $ | 0.28 | | |
| | |
(in millions except
share and per share data) |
| |||
Shares of FGL common stock outstanding as of the Merger Agreement
|
| | | | 58,991,806 | | |
Cash consideration per share to FGL common stockholders
|
| | | $ | 31.10 | | |
Estimated cash consideration to FGL common stockholders
|
| | | $ | 1,835 | | |
Estimated cash consideration for FGL outstanding stock-based compensation awards
|
| | | | 3(1) | | |
Estimated total consideration for FGL
|
| | | | 1,838 | | |
Estimated total consideration for FSR
|
| | | | 65 | | |
Total estimated consideration
|
| | | $ | 1,903 | | |
|
| | |
FGL
|
| |
FSR
|
| |
Total
|
| |||||||||
| | |
(in millions)
|
| |||||||||||||||
Commercial mortgage loans – carrying value
|
| | | $ | 579 | | | | | $ | — | | | | | $ | 579 | | |
Commercial mortgage loans – fair value
|
| | | | 576 | | | | | | — | | | | | | 576 | | |
Net purchase accounting adjustment
|
| | | $ | (3) | | | | | $ | — | | | | | $ | (3) | | |
Other investments – carrying value
|
| | | $ | 119 | | | | | $ | — | | | | | $ | 119 | | |
Other investments – fair value
|
| | | | 115 | | | | | | — | | | | | | 115 | | |
Net purchase accounting adjustment(1)
|
| | | $ | (4) | | | | | $ | — | | | | | $ | (4) | | |
Reinsurance recoverables – carrying value
|
| | | $ | 3,426 | | | | | | — | | | | | $ | 3,426 | | |
Reinsurance recoverables – fair value
|
| | | | 3,363 | | | | | | — | | | | | | 3,363 | | |
Net purchase accounting adjustment
|
| | | $ | (63) | | | | | | — | | | | | $ | (63) | | |
|
| | |
FGL
|
| |
FSR
|
| |
Total
|
||||||||
| | |
(in millions)
|
||||||||||||||
Intangibles, net – carrying value
|
| | | $ | 1,184 | | | | | $ | — | | | | | $ | 1,184 |
Intangibles, net – fair value
|
| | | | 1,586 | | | | | | — | | | | | | 1,586 |
Net purchase accounting adjustment(3)
|
| | | $ | 402 | | | | | $ | — | | | | | $ | 402 |
Goodwill – carrying value
|
| | | $ | — | | | | | $ | — | | | | | $ | — |
Goodwill – fair value(4)
|
| | | | 79 | | | | | | — | | | | | | 79 |
Net purchase accounting adjustment
|
| | | $ | 79 | | | | | $ | — | | | | | $ | 79 |
Other assets(2) – carrying value
|
| | | $ | 204 | | | | | $ | 23 | | | | | $ | 227 |
Other assets – fair value
|
| | | | 199 | | | | | | 23 | | | | | | 222 |
Net purchase accounting adjustment
|
| | | $ | (5) | | | | | $ | — | | | | | $ | (5) |
Contractholder funds – carrying value
|
| | | $ | 20,052 | | | | | $ | — | | | | | $ | 20,052 |
Contractholder funds – fair value
|
| | | | 20,500 | | | | | | — | | | | | | 20,500 |
Net purchase accounting adjustment(5)
|
| | | $ | 448 | | | | | $ | — | | | | | $ | 448 |
Debt – carrying value
|
| | | $ | 300 | | | | | $ | — | | | | | $ | 300 |
Debt – fair value
|
| | | | 301 | | | | | | — | | | | | | 301 |
Net purchase accounting adjustment
|
| | | $ | 1 | | | | | $ | — | | | | | $ | 1 |
Other liabilities – carrying value
|
| | | $ | 903 | | | | | $ | 11 | | | | | $ | 914 |
Other liabilities – fair value
|
| | | | 879 | | | | | | 11 | | | | | | 890 |
Net purchase accounting adjustment(6)
|
| | | $ | (24) | | | | | $ | — | | | | | $ | (24) |
|
| | |
(in millions)
|
| |||
Assets | | | |||||
Related party investments
|
| | | | (3) | | |
Related party loans
|
| | | | (71) | | |
Funds withheld receivables
|
| | | | (930) | | |
Reinsurance recoverables
|
| | | | (1,004) | | |
Other assets(1)
|
| | | | (119) | | |
Liabilities | | | |||||
Funds withheld for reinsurance liabilities
|
| | | | (1,123) | | |
Insurance reserves
|
| | | | (1,004) | | |
| | |
FGL
|
| |
FSR
|
| |
Total
|
| |||||||||
| | |
(in millions)
|
| |||||||||||||||
Common stock
|
| | | $ | (1) | | | | | $ | — | | | | | $ | (1) | | |
Additional paid-in capital
|
| | | | (715) | | | | | | (178) | | | | | | (893) | | |
Retained earnings (accumulated deficit)
|
| | | | (914) | | | | | | 77 | | | | | | (837) | | |
Accumulated other comprehensive income
|
| | | | (291) | | | | | | — | | | | | | (291) | | |
Treasury stock
|
| | | | 13 | | | | | | — | | | | | | 13 | | |
Total adjustment
|
| | | $ | (1,908) | | | | | $ | (101) | | | | | $ | (2,009) | | |
|
| | |
Three Months Ended March 31, 2017
|
| |
Year Ended December 31, 2016
|
| ||||||||||||||||||||||||||||||
| | |
FGL
|
| |
FSR
|
| |
Total
|
| |
FGL
|
| |
FSR
|
| |
Total
|
| ||||||||||||||||||
| | |
(in millions)
|
| |||||||||||||||||||||||||||||||||
Calculation of amortization adjustment:
|
| | | | | | | ||||||||||||||||||||||||||||||
Historical amortization recognized on DAC and VOBA
|
| | | $ | 123 | | | | | $ | — | | | | | $ | 123 | | | | | $ | 54 | | | | | $ | — | | | | | $ | 54 | | |
Amortization after fair value
(including VOBA and other intangibles) |
| | | | 147 | | | | | | — | | | | | | 147 | | | | | | 130 | | | | | | — | | | | | | 130 | | |
Amortization expense adjustment for the period
|
| | | $ | 24 | | | | | $ | — | | | | | $ | 24 | | | | | $ | 76 | | | | | $ | — | | | | | $ | 76 | | |
|
| | |
Three Months Ended March 31, 2017
|
| |
Year Ended December 31, 2016
|
| ||||||||||||||||||||||||||||||
| | |
Purchase
Accounting Adjustments |
| |
Pro Forma
Adjustments (Assuming No Redemption) |
| |
Additional
Pro Forma Adjustments (Assuming Maximum Redemption) |
| |
Purchase
Accounting Adjustments |
| |
Pro Forma
Adjustments (Assuming No Redemption) |
| |
Additional
Pro Forma Adjustments (Assuming Maximum Redemption) |
| ||||||||||||||||||
| | |
(in millions)
|
| |||||||||||||||||||||||||||||||||
Pro forma net income (loss) before income taxes
|
| | | $ | (21) | | | | | $ | (14) | | | | | $ | — | | | | | $ | (41) | | | | | $ | (58) | | | | | $ | — | | |
Statutory tax rate
|
| | | | 35% | | | | | | 35% | | | | | | 35% | | | | | | 35% | | | | | | 35% | | | | | | 35% | | |
Income tax (benefit) expense
|
| | | $ | (7) | | | | | $ | (5) | | | | | $ | — | | | | | $ | (14) | | | | | $ | (21) | | | | | $ | — | | |
|
| | |
Three
Months Ended March 31, 2017 |
| |
Year Ended
December 31, 2016 |
| ||||||
| | |
(in millions)
|
| |||||||||
Premiums
|
| | | $ | — | | | | | $ | 3 | | |
Net investment income
|
| | | | 11 | | | | | | 61 | | |
Net investment gains (losses)
|
| | | | (11) | | | | | | (57) | | |
Insurance and investment product fees and other
|
| | | | 1 | | | | | | 3 | | |
Benefits and other changes in policy reserves
|
| | | | (4) | | | | | | 50 | | |
Income tax (benefit) expense
|
| | | | 1 | | | | | | (21) | | |
Impact to net income (loss)
|
| | | $ | (2) | | | | | $ | 39 | | |
|
| Combined Pro Forma Basic Weighted Average Shares (assuming no redemption) | | | |||||
|
Founders shares
|
| | | | 30,000,000 | | |
|
Shares issued as part of units purchased in IPO
|
| | | | 69,000,000 | | |
|
Share purchases pursuant to forward purchase agreements
|
| | | | 51,000,000 | | |
|
Share purchases pursuant to the Equity Commitment Letters
|
| | | | 36,000,000 | | |
|
Share purchases by the ROFO Financing participants
|
| | | | 20,000,000 | | |
|
Pro forma weighted average shares (basic)
|
| | | | 206,000,000 | | |
|
| Combined Pro Forma Diluted Weighted Average Shares (assuming no redemption) | | | |||||
|
Founders shares
|
| | | | 30,000,000 | | |
|
Shares issued as part of units purchased in IPO
|
| | | | 69,000,000 | | |
|
Share purchases pursuant to forward purchase agreements
|
| | | | 51,000,000 | | |
|
Share purchases pursuant to the Equity Commitment Letters
|
| | | | 36,000,000 | | |
|
Share purchases by the ROFO Financing participants
|
| | | | 20,000,000 | | |
|
Preferred warrants
|
| | | | 8,362,473(1) | | |
|
Pro forma weighted average shares (diluted)
|
| | | | 214,362,684 | | |
|
|
Combined Pro Forma Basic Weighted Average Shares (assuming maximum redemption)
|
| | |||||
|
Founders shares
|
| | | | 30,000,000 | | |
|
Shares issued as part of units purchased in IPO
|
| | | | 23,000,000(2) | | |
|
Share purchases pursuant to forward purchase agreements
|
| | | | 51,000,000 | | |
|
Share purchases pursuant to the Equity Commitment Letters
|
| | | | 36,000,000 | | |
|
Pro forma weighted average shares (basic)
|
| | | | 140,000,000 | | |
|
|
Combined Pro Forma Diluted Weighted Average Shares (assuming maximum redemption)
|
| | |||||
|
Founders shares
|
| | | | 30,000,000 | | |
|
Shares issued as part of units purchased in IPO
|
| | | | 23,000,000(2) | | |
|
Share purchases pursuant to forward purchase agreements
|
| | | | 51,000,000 | | |
|
Share purchases pursuant to the Equity Commitment Letters
|
| | | | 36,000,000 | | |
|
Preferred warrants
|
| | | | 11,168,735(3) | | |
|
Pro forma weighted average shares (diluted)
|
| | | | 151,169,016 | | |
|
| | |
Three Months Ended
March 31, 2017 |
| |
Year Ended
December 31, 2016 |
| ||||||||||||||||||
| | |
Pro Forma
Adjustments (Assuming No Redemption) |
| |
Additional
Pro Forma Adjustments (Assuming Maximum Redemption) |
| |
Pro Forma
Adjustments (Assuming No Redemption) |
| |
Additional
Pro Forma Adjustments (Assuming Maximum Redemption) |
| ||||||||||||
| | | | | | ||||||||||||||||||||
Net income
|
| | | | 68 | | | | | | 68 | | | | | | 53 | | | | | | 53 | | |
Mezzanine equity accretion
|
| | | | 7 | | | | | | 25 | | | | | | 29 | | | | | | 99 | | |
Income (loss) attributable to common shareholders
|
| | | | 61 | | | | | | 43 | | | | | | 24 | | | | | | (46) | | |
Basic earnings (loss) per share
|
| | | $ | 0.30 | | | | | $ | 0.31 | | | | | $ | 0.12 | | | | | $ | (0.33) | | |
Diluted earnings (loss) per share
|
| | | $ | 0.28 | | | | | $ | 0.28 | | | | | $ | 0.11 | | | | | $ | (0.33) | | |
| | |
FGL
|
| |
FSR
|
| ||||||
| | |
(in millions)
|
| |||||||||
Fixed maturity securities, available-for-sale
|
| | | $ | 20,052 | | | | | $ | — | | |
Equity securities, available-for-sale
|
| | | | 712 | | | | | | — | | |
Derivative investments
|
| | | | 351 | | | | | | — | | |
Commercial mortgage loans
|
| | | | 576 | | | | | | — | | |
Other invested assets
|
| | | | 115 | | | | | | — | | |
Related party investments
|
| | | | — | | | | | | 95 | | |
Total investments
|
| | | | 21,806 | | | | | | 95 | | |
Related party loans
|
| | | | 71 | | | | | | — | | |
Funds withheld receivable
|
| | | | — | | | | | | 1,626 | | |
Cash and cash equivalents
|
| | | | 887 | | | | | | 25 | | |
Accrued investment income
|
| | | | 225 | | | | | | — | | |
Reinsurance recoverable
|
| | | | 3,363 | | | | | | — | | |
Intangibles, net
|
| | | | 1,586 | | | | | | — | | |
Deferred tax assets
|
| | | | 36 | | | | | | — | | |
Income taxes receivable
|
| | | | — | | | | | | 8 | | |
Other assets
|
| | | | 199 | | | | | | 23 | | |
Total identifiable assets acquired
|
| | | | 28,173 | | | | | | 1,777 | | |
Contractholder funds
|
| | | | (20,500) | | | | | | — | | |
Future policy benefits
|
| | | | (3,435) | | | | | | — | | |
Funds withheld for insurance liabilities
|
| | | | (1,134) | | | | | | — | | |
Liability for policy and contract claims
|
| | | | (60) | | | | | | — | | |
Insurance reserves
|
| | | | — | | | | | | (1,665) | | |
Debt
|
| | | | (301) | | | | | | — | | |
Revolving credit facility
|
| | | | (105) | | | | | | — | | |
Other liabilities
|
| | | | (879) | | | | | | (11) | | |
Net identifiable liabilities acquired
|
| | | | 1,759 | | | | | | 101 | | |
Goodwill (bargain purchase gain)(1)
|
| | | | 79 | | | | | | (36) | | |
Total gross consideration
|
| | | $ | 1,838 | | | | | $ | 65 | | |
|
| | |
Fair Value
|
| | |||||||||||||||||
| | |
FGL
|
| |
FSR
|
| |
Total
|
| |
Useful Life
|
| |||||||||
| | |
(in millions)
|
| | |||||||||||||||||
Distribution channels
|
| | | $ | 44 | | | | | $ | — | | | | | $ | 44 | | | |
20 years
|
|
Trade names
|
| | | | 20 | | | | | | — | | | | | | 20 | | | |
10 years
|
|
Licenses
|
| | | | 7 | | | | | | — | | | | | | 7 | | | | indefinite | |
Total intangible assets
|
| | | $ | 71 | | | | | $ | — | | | | | $ | 71 | | | | ||
|
| | | | | | | | | | | | | | |
Combined Pro Forma
|
| |||||||||
| | |
CF Corp.
|
| |
FGL
|
| |
Assuming No
Redemptions |
| |
Assuming
Maximum Redemptions |
| ||||||||||||
| | |
(in millions, except share and per share amounts)
|
| |||||||||||||||||||||
As of and for the Three Months Ended (Unaudited)
|
| | | | | ||||||||||||||||||||
Book value per share(1)
|
| | | $ | 0.25 | | | | | $ | 32.74 | | | | | $ | 8.27 | | | | | $ | 7.51 | | |
Weighted average shares outstanding – basic
|
| | | | 19,933,292 | | | | | | 58,280,532 | | | | | | 206,000,000 | | | | | | 140,000,000 | | |
Weighted average shares outstanding – diluted
|
| | | | 84,000,000 | | | | | | 58,366,009 | | | | | | 214,362,684 | | | | | | 151,169,016 | | |
Net earnings (loss) per share – basic
|
| | | $ | — | | | | | $ | 1.85 | | | | | $ | 0.30 | | | | | $ | 0.31 | | |
Net earnings (loss) per share – diluted
|
| | | $ | — | | | | | $ | 1.85 | | | | | $ | 0.28 | | | | | $ | 0.28 | | |
Cash dividends per share
|
| | | $ | — | | | | | $ | 0.065 | | | | | $ | 0.018 | | | | | $ | 0.027 | | |
As of and for the Year Ended | | | | | | ||||||||||||||||||||
Weighted average shares outstanding – basic
|
| | | | 18,560,652 | | | | | | 58,275,013 | | | | | | 206,000,000 | | | | | | 140,000,000 | | |
Weighted average shares outstanding - diluted
|
| | | | 18,560,652 | | | | | | 58,578,163 | | | | | | 214,362,684 | | | | | | 151,169,016 | | |
Net earnings (loss) per share – basic
|
| | | $ | (0.02) | | | | | $ | 1.67 | | | | | $ | 0.12 | | | | | $ | (0.33) | | |
Net earnings (loss) per share – diluted
|
| | | $ | (0.02) | | | | | $ | 1.66 | | | | | $ | 0.11 | | | | | $ | (0.33) | | |
Cash dividends per share
|
| | | $ | — | | | | | $ | 0.260 | | | | | $ | 0.074 | | | | | $ | 0.108 | | |
| | |
March 31, 2017
|
| |||||||||||||||||||||
| | | | | | | | | | | | | | |
Pro Forma
|
| |||||||||
| | |
Historical
|
| |
Assuming No
Redemptions |
| |
Assuming
Maximum Redemptions |
| |||||||||||||||
| | |
CF Corp.
|
| |
FGL
|
| ||||||||||||||||||
| | |
(in millions)
|
| |||||||||||||||||||||
Cash and cash equivalents
|
| | | $ | 1 | | | | | $ | 887 | | | | | $ | 1,081 | | | | | $ | 887 | | |
Investments and cash equivalents held in Trust Account
|
| | | | 691 | | | | | | — | | | | | | — | | | | | | — | | |
| | | | | 692 | | | | | | 887 | | | | | | 1,081 | | | | | | 887 | | |
Long-term debt, including current portion
|
| | | | — | | | | | | 405 | | | | | | 449 | | | | | | 457 | | |
Deferred underwriting compensation
|
| | | | 45 | | | | | | — | | | | | | — | | | | | | — | | |
Preferred shares
|
| | | | — | | | | | | — | | | | | | 367 | | | | | | 818 | | |
Class A ordinary shares, subject to possible redemption
|
| | | | 641 | | | | | | — | | | | | | — | | | | | | — | | |
Shareholders’ equity
|
| | | | 5 | | | | | | 1,908 | | | | | | 1,704 | | | | | | 1,051 | | |
Total capitalization
|
| | | $ | 1,383 | | | | | $ | 3,200 | | | | | $ | 3,601 | | | | | $ | 3,213 | | |
|
|
Primary Selected Companies
|
| |
Secondary Selected Companies
|
|
|
•
American Equity Investment Life Holding Company
•
Athene Group Ltd.
|
| |
•
Ameriprise Financial, Inc.
•
CNO Financial Group, Inc.
•
Lincoln National Corporation
•
MetLife, Inc.
•
Principal Financial Group, Inc.
•
Primerica, Inc.
•
Prudential Financial, Inc.
•
Torchmark Corporation
•
Unum Group
•
Voya Financial, Inc.
|
|
|
Selected Approximate Implied Per Share
Equity Value Reference Range |
| |
Business Combination Consideration
|
|
|
$26.00 − $32.00
|
| |
$31.10
|
|
|
Announcement Date
|
| |
Acquiror
|
| |
Target
|
|
|
•
11/9/2015
|
| |
•
Anbang Insurance Group Co., Ltd.
|
| |
•
Fidelity & Guaranty Life
|
|
|
•
8/11/2015
|
| |
•
Sumitomo Life Insurance Company
|
| |
•
Symetra Financial Corporation
|
|
|
•
6/3/2014
|
| |
•
Dai-ichi Life Insurance Company, Limited
|
| |
•
Protective Life Corporation
|
|
|
•
12/21/2012
|
| |
•
Athene Holding Ltd.
|
| |
•
Aviva USA Corporation
|
|
|
•
7/13/2012
|
| |
•
Athene Holding Ltd.
|
| |
•
Presidential Life Corporation
|
|
|
•
10/7/2011
|
| |
•
Guggenheim Partners, LLC
|
| |
•
EquiTrust Life Insurance Company
|
|
|
Selected Approximate Implied Per Share
Equity Value Reference Range |
| |
Business Combination Consideration
|
|
|
$31.00 − $37.00
|
| |
$31.10
|
|
|
Selected Approximate Implied Per Share
Equity Value Reference Ranges: |
| |
Business Combination Consideration
|
| |||
|
Standalone
|
| |
Pro Forma for Transaction
|
| | ||
|
$30.00 − $34.00
|
| |
$36.00 − $43.00
|
| |
$31.10
|
|
Year
|
| |
2017
|
| |
2018
|
| |
2019
|
| |||||||||
Adjusted Operating EPS(1)
|
| | | $ | 2.59 | | | | | $ | 2.90 | | | | | $ | 3.24 | | |
Adjusted Operating ROE, excluding AOCI(2)
|
| | | | 9.8% | | | | | | 10.1% | | | | | | 10.4% | | |
Book Value/Share, excluding AOCI(3)
|
| | | $ | 27.46 | | | | | $ | 29.82 | | | | | $ | 32.51 | | |
| | |
For the Year Ended September 30,
|
| |||||||||||||||||||||||||||
(in millions)
|
| |
2018E
|
| |
2019E
|
| |
2020E
|
| |
2021E
|
| |
2022E
|
| |||||||||||||||
Total Revenue
|
| | | $ | 1,304.7 | | | | | $ | 1,384.3 | | | | | $ | 1,468.9 | | | | | $ | 1,510.2 | | | | | $ | 1,555.0 | | |
Net Income
|
| | | $ | 280.8 | | | | | $ | 318.8 | | | | | $ | 348.1 | | | | | $ | 349.9 | | | | | $ | 353.3 | | |
|
Sources of Funds(1)
|
| |
Uses(1)
|
| ||||||||||||
|
(in millions)
|
| |||||||||||||||
|
Debt Financing Commitment
|
| | | $ | 418 | | | | Debt | | | | $ | 405 | | |
|
Preferred Shares
|
| | | | 375 | | | |
FGL Equity Purchase Price
|
| | | | 1,835 | | |
|
Public shares and forward purchase shares
|
| | | | 1,200 | | | |
FSR Equity Purchase Price
|
| | | | 65 | | |
|
BTO & FNF equity financing
|
| | | | 360 | | | |
Fees & Other Adjustments(2)
|
| | | | 99 | | |
|
338(h)(10) Rebate
|
| | | | 30 | | | | | |||||||
|
ROFO shares
|
| | | | 200 | | | |
Cash to Balance Sheet
|
| | | | 179 | | |
|
Total Sources
|
| | | $ | 2,583 | | | |
Total Uses
|
| | | $ | 2,583 | | |
|
Name
|
| |
Age
|
| |
Position
|
|
Chinh E. Chu | | |
50
|
| | Co-Executive Chairman | |
William P. Foley, II | | |
72
|
| | Co-Executive Chairman | |
Christopher J. Littlefield | | |
50
|
| |
President, Chief Executive Officer and Director
|
|
Dennis R. Vigneau | | |
50
|
| | Chief Financial Officer | |
Eric L. Marhoun | | |
55
|
| | General Counsel and Secretary | |
James A. Quella | | |
67
|
| | Director | |
Keith W. Abell | | |
60
|
| | Director | |
Richard N. Massey | | |
60
|
| | Director | |
Menes O. Chee | | |
40
|
| | Director | |
Patrick S. Baird | | |
63
|
| | Director | |
Timothy M. Walsh | | |
54
|
| | Director | |
| | | | | | | | | | | | | | |
After Business Combination and Related Transactions
|
| |||||||||||||||||||||
| | |
Prior to Business Combination
and Related Transactions(1) |
| |
Assuming No Redemption
|
| |
Assuming Maximum
Redemption |
| |||||||||||||||||||||||||||
Directors and Executive Officers
|
| |
Number of
Shares Beneficially Owned(2) |
| |
Percentage of
Outstanding Ordinary Shares |
| |
Number of
Shares Beneficially Owned |
| |
Percentage of
Outstanding Ordinary Shares |
| |
Number of
Shares Beneficially Owned |
| |
Percentage of
Outstanding Ordinary Shares |
| ||||||||||||||||||
Chinh E. Chu(3)
|
| | | | 11,452,206 | | | | | | 13.6% | | | | | | 22,692,058(7) | | | | | | 8.0% | | | | | | 22,692,058 | | | | | | 10.3% | | |
William P. Foley, II(3)
|
| | | | 11,452,206 | | | | | | 13.6% | | | | | | 22,692,058(8) | | | | | | 8.0% | | | | | | 22,692,058 | | | | | | 10.3% | | |
Douglas B. Newton
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Richard N. Massey
|
| | | | 73,529 | | | | | | * | | | | | | 2,390,565 | | | | | | * | | | | | | 2,390,565 | | | | | | 1.1% | | |
James A. Quella
|
| | | | 36,765 | | | | | | * | | | | | | 1,195,282(9) | | | | | | * | | | | | | 1,195,282 | | | | | | * | | |
Keith Abell
|
| | | | 8,516 | | | | | | * | | | | | | 239,056 | | | | | | * | | | | | | 239,056 | | | | | | * | | |
Menes O. Chee
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Christopher J. Littlefield
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Dennis R. Vigneau
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Eric L. Marhoun
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
David Ducommun
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Patrick S. Baird
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Timothy M. Walsh
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
All officers and directors as a group (six individuals)
|
| | | | 12,712,716 | | | | | | 15.1% | | | | | | 49,209,019 | | | | | | 17.3% | | | | | | 49,209,019 | | | | | | 22.3% | | |
Greater than 5% Shareholders | | | | | | | | ||||||||||||||||||||||||||||||
CF Capital Growth, LLC
(our Sponsor)(3) |
| | | | 11,250,000 | | | | | | 13.4% | | | | | | 45,384,116(10) | | | | | | 16.0% | | | | | | 45,384,116(10) | | | | | | 20.6% | | |
BTO
|
| | | | 919,118 | | | | | | — | | | | | | 43,378,906(11) | | | | | | 15.3% | | | | | | 43,378,906(11) | | | | | | 19.7% | | |
FNF
|
| | | | — | | | | | | — | | | | | | 20,232,000(12) | | | | | | 7.1% | | | | | | 24,580,855(12) | | | | | | 11.1% | | |
Angelo, Gordon & Co., L.P.
|
| | | | 5,800,000(4) | | | | | | 6.9% | | | | | | 8,700,000(13) | | | | | | 3.1% | | | | | | 2,900,000 | | | | | | 1.3% | | |
Blue Pool Capital Limited
|
| | | | 5,000,000(5) | | | | | | 6.0% | | | | | | 7,500,000(14) | | | | | | 2.6% | | | | | | 2,500,000 | | | | | | 1.1% | | |
BlueMountain Capital Management, LLC
|
| | | | 7,000,000(6) | | | | | | 8.3% | | | | | | 10,500,000(15) | | | | | | 3.7% | | | | | | 3,500,000 | | | | | | 1.6% | | |
| Unaudited Interim Financial Statements | | | | | Page | | |
| | | | | F-2 | | | |
| | | | | F-3 | | | |
| | | | | F-4 | | | |
| | | | | F-5 | | | |
| Audited Annual Financial Statements | | | |||||
| | | | | F-17 | | | |
| | | | | F-18 | | | |
| | | | | F-19 | | | |
| | | | | F-20 | | | |
| | | | | F-21 | | | |
| | | | | F-22 | | | |
| | | | | F-44 | | | |
| | | | | F-45 | | | |
| | | | | F-46 | | |
| | |
March 31,
2017 |
| |
September 30,
2016 |
| ||||||
| | |
(Unaudited)
|
| | ||||||||
ASSETS
|
| | | ||||||||||
Related party investments
|
| | | $ | 95.2 | | | | | $ | 98.4 | | |
Cash and cash equivalents
|
| | | | 25.4 | | | | | | 32.1 | | |
Funds withheld receivables at fair value
|
| | | | 1,626.0 | | | | | | 1,650.4 | | |
Income tax receivable
|
| | | | 8.2 | | | | | | 16.5 | | |
Other assets
|
| | | | 22.1 | | | | | | 19.0 | | |
Total assets
|
| | | $ | 1,776.9 | | | | | $ | 1,816.4 | | |
LIABILITIES AND EQUITY
|
| | | ||||||||||
Insurance reserves at fair value
|
| | | $ | 1,664.8 | | | | | $ | 1,685.9 | | |
Other liabilities
|
| | | | 11.2 | | | | | | 9.9 | | |
Total liabilities
|
| | | | 1,676.0 | | | | | | 1,695.8 | | |
Commitments and contingencies | | | | | | | | | | | | | |
Shareholder’s equity: | | | | ||||||||||
Common stock
|
| | | | 0.4 | | | | | | 0.4 | | |
Additional paid-in capital
|
| | | | 177.7 | | | | | | 177.7 | | |
Accumulated deficit
|
| | | | (77.2) | | | | | | (57.7) | | |
Accumulated other comprehensive income (loss)
|
| | | | — | | | | | | 0.2 | | |
Total shareholder’s equity
|
| | | | 100.9 | | | | | | 120.6 | | |
Total liabilities and equity
|
| | | $ | 1,776.9 | | | | | $ | 1,816.4 | | |
|
| | |
Three months ended March 31,
|
| |
Six months ended March 31,
|
| ||||||||||||||||||
| | |
2017
|
| |
2016
|
| |
2017
|
| |
2016
|
| ||||||||||||
| | |
(Unaudited)
|
| |
(Unaudited)
|
| ||||||||||||||||||
Revenues: | | | | | | ||||||||||||||||||||
Net investment income
|
| | | $ | 0.1 | | | | | $ | 0.6 | | | | | $ | 0.1 | | | | | $ | 1.5 | | |
Net investment gains
|
| | | | 40.9 | | | | | | 40.3 | | | | | | 12.2 | | | | | | 28.6 | | |
Total revenues
|
| | | | 41.0 | | | | | | 40.9 | | | | | | 12.3 | | | | | | 30.1 | | |
Operating costs and expenses: | | | | | | ||||||||||||||||||||
Benefits and other changes in policy reserves
|
| | | | 42.0 | | | | | | 38.5 | | | | | | 26.3 | | | | | | 26.1 | | |
Acquisition and operating expenses
|
| | | | 3.1 | | | | | | 3.8 | | | | | | 5.5 | | | | | | 5.4 | | |
Total operating costs and expenses
|
| | | | 45.1 | | | | | | 42.3 | | | | | | 31.8 | | | | | | 31.5 | | |
Operating loss
|
| | | | (4.1) | | | | | | (1.4) | | | | | | (19.5) | | | | | | (1.4) | | |
Other income, net
|
| | | | 0.1 | | | | | | — | | | | | | 0.1 | | | | | | — | | |
Loss before income taxes
|
| | | | (4.0) | | | | | | (1.4) | | | | | | (19.4) | | | | | | (1.4) | | |
Income tax expense (benefit)
|
| | | | 0.1 | | | | | | (0.5) | | | | | | 0.1 | | | | | | (1.8) | | |
Net (loss) income
|
| | | $ | (4.1) | | | | | $ | (0.9) | | | | | $ | (19.5) | | | | | $ | 0.4 | | |
|
| | |
Six months ended March 31,
|
| |||||||||
| | |
2017
|
| |
2016
|
| ||||||
| | |
(Unaudited)
|
| |||||||||
Cash flows from operating activities: | | | | ||||||||||
Net (loss) income
|
| | | $ | (19.5) | | | | | $ | 0.4 | | |
Adjustments to reconcile net (loss) income to operating cash flows: | | | | | | | | | | | | | |
Deferred income taxes
|
| | | | 0.1 | | | | | | 0.2 | | |
Net recognized gains on investments and derivatives
|
| | | | (0.6) | | | | | | (3.9) | | |
Changes in operating assets and liabilities
|
| | | | 14.3 | | | | | | (4.4) | | |
Net change in cash due to operating activities
|
| | | | (5.7) | | | | | | (7.7) | | |
Cash flows from investing activities: | | | | ||||||||||
Proceeds from investments sold, matured or repaid
|
| | | | 2.4 | | | | | | 17.4 | | |
Cost of investments acquired
|
| | | | (3.8) | | | | | | (3.2) | | |
Net asset-based loan repayments
|
| | | | 0.4 | | | | | | 0.6 | | |
Other investing activities, net
|
| | | | — | | | | | | 7.9 | | |
Net change in cash due to investing activities
|
| | | | (1.0) | | | | | | 22.7 | | |
Net change in cash and cash equivalents
|
| | | | (6.7) | | | | | | 15.0 | | |
Cash and cash equivalents at beginning of period
|
| | | | 32.1 | | | | | | 18.0 | | |
Cash and cash equivalents at end of period
|
| | | $ | 25.4 | | | | | $ | 33.0 | | |
|
Asset Derivatives
|
| |
Classification
|
| |
March 31,
2017 |
| |
September 30,
2016 |
| ||||||
Derivatives not designated as hedging instruments: | | | | | ||||||||||||
Call option receivable from FGL
|
| |
Funds withheld receivables
|
| | | $ | 13.3 | | | | | $ | 11.3 | | |
Call options
|
| | Other assets | | | | | 10.5 | | | | | | 5.9 | | |
Total asset derivatives
|
| | | | | | $ | 23.8 | | | | | $ | 17.2 | | |
|
| | | | | |
Three months ended March 31,
|
| |
Six months ended March 31,
|
| ||||||||||||||||||
Classification
|
| |
Derivatives Not
Designated as Hedging Instruments |
| |
2017
|
| |
2016
|
| |
2017
|
| |
2016
|
| ||||||||||||
Revenues:
|
| | | | | | ||||||||||||||||||||||
Net investment gains
|
| |
Call options
|
| | | $ | 5.8 | | | | | $ | (1.4) | | | | | $ | 8.9 | | | | | $ | 0.5 | | |
| | |
March 31, 2017
|
| |
September 30, 2016
|
| ||||||||||||||||||||||||||||||||||||||||||
Assets
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Fair Value
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Fair Value
|
| ||||||||||||||||||||||||
Fixed maturity and equity securities included in funds withheld receivables
|
| | | $ | 80.5 | | | | | $ | 1,413.8 | | | | | $ | 49.1 | | | | | $ | 1,543.4 | | | | | $ | 69.9 | | | | | $ | 1,387.1 | | | | | $ | 78.1 | | | | | $ | 1,535.1 | | |
Call option receivable from FGL included in funds withheld receivables
|
| | | | — | | | | | | 13.3 | | | | | | — | | | | | | 13.3 | | | | | | — | | | | | | 11.3 | | | | | | — | | | | | | 11.3 | | |
Related party investments
|
| | | | — | | | | | | 2.0 | | | | | | 93.2 | | | | | | 95.2 | | | | | | — | | | | | | — | | | | | | 98.4 | | | | | | 98.4 | | |
Other invested assets included
in other assets |
| | | | — | | | | | | — | | | | | | 5.5 | | | | | | 5.5 | | | | | | — | | | | | | — | | | | | | 5.5 | | | | | | 5.5 | | |
Total financial assets
|
| | | $ | 80.5 | | | | | $ | 1,429.1 | | | | | $ | 147.8 | | | | | $ | 1,657.4 | | | | | $ | 69.9 | | | | | $ | 1,398.4 | | | | | $ | 182.0 | | | | | $ | 1,650.3 | | |
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves
|
| | | $ | — | | | | | $ | — | | | | | $ | 1,664.8 | | | | | $ | 1,664.8 | | | | | $ | — | | | | | $ | — | | | | | $ | 1,685.9 | | | | | $ | 1,685.9 | | |
Total financial liabilities
|
| | | $ | — | | | | | $ | — | | | | | $ | 1,664.8 | | | | | $ | 1,664.8 | | | | | $ | — | | | | | $ | — | | | | | $ | 1,685.9 | | | | | $ | 1,685.9 | | |
|
| | |
Fair Value at
|
| | | | | | | |
Range (Weighted average)
|
| ||||||||||||
Assets
|
| |
March 31,
2017 |
| |
September 30,
2016 |
| |
Valuation
Technique |
| |
Unobservable
Input(s) |
| |
March 31,
2017 |
| |
September 30,
2016 |
| ||||||
Related party investments −
HGI Energy |
| | | $ | 91.7 | | | | | $ | 91.0 | | | | Discounted Cash Flow |
| | Discount rate | | |
1.31%
|
| |
0.79%
|
|
Related party investments −
Salus preferred equity |
| | | | 1.2 | | | | | | 6.7 | | | | Market- approach |
| | Yield | | |
1% – 3%
|
| |
11%
|
|
| | | | | | | | | | | | | | | | | | RadioShack Corp. Recovery |
| |
—%
|
| |
5.5%
|
|
| | | | | | | | | | | | | | | | | | Discount rate | | |
7% – 9%
|
| |
15%
|
|
| | | | | | | | | | | | | | | | | |
Salus CLO Equity
|
| |
11.9%
|
| |
28.4%
|
|
Related party investments −
Salus CLO equity tranche |
| | | | 0.3 | | | | | | 0.7 | | | | Third party valuation |
| | Offered quote | | |
11.9%
|
| |
28.4%
|
|
| | | | | | | | | | | | | | | | | | Discount rate | | |
15%
|
| |
15%
|
|
| | | | | | | | | | | | | | | | | | RSH Recovery | | |
—%
|
| |
5.5%
|
|
| | | | | | | | | | | | | | | | | | Other loan recoveries | | |
0% – 100%
|
| |
0% – 100%
|
|
Other invested assets included in other assets
|
| | | | 5.5 | | | | | | 5.5 | | | | Discounted Cash Flow |
| | Probability of collection | | |
100%
|
| |
100%
|
|
| | | | | | | | | | | | | | | | | | Discount rate | | |
10%
|
| |
10%
|
|
Funds withheld receivables: | | | | | | | | ||||||||||||||||||
Fixed maturity securities | | | | | 33.6 | | | | | | 35.2 | | | | Matrix pricing |
| | Quoted prices | | |
100% – 117%
(106%) |
| |
98% – 122%
(109%) |
|
Fixed maturity securities | | | | | 5.1 | | | | | | 5.4 | | | | Loan Recovery Value |
| | Recovery rate | | |
56% – 100%
(81%) |
| |
56% – 100%
(82%) |
|
Fixed maturity securities | | | | | 10.0 | | | | | | 35.7 | | | | Broker- quoted |
| | Offered quotes | | |
99% – 105%
(100%) |
| |
97% – 100%
(100%) |
|
Loan participations | | | | | 0.4 | | | | | | 1.8 | | | | Loan Recovery Value |
| | Recovery rate | | |
56%
|
| |
52% – 100%
(71%) |
|
Total | | | | $ | 147.8 | | | | | $ | 182.0 | | | | | | | ||||||||
Liabilities | | | | | | | | ||||||||||||||||||
Insurance reserves | | | | $ | 1,664.8 | | | | | $ | 1,685.9 | | | | Discounted cash flow |
| | Non-performance risk spread |
| |
0.35%
|
| |
0.32%
|
|
| | | | | | | | | | | | | | | | | | Risk margin to reflect uncertainty |
| |
0.50%
|
| |
0.50%
|
|
Total | | | | $ | 1,664.8 | | | | | $ | 1,685.9 | | | | | | | ||||||||
|
| | |
Three months ended March 31, 2017
|
| |||||||||||||||||||||||||||||||||||||||||||||
| | |
Balance at
Beginning of Period |
| |
Total Gains (Losses)
|
| |
Purchases
|
| |
Sales
|
| |
Settlements
|
| |
Net
transfer In (Out) of Level 3(a) |
| |
Balance at
End of Period |
| |||||||||||||||||||||||||||
| | |
Included
in Earnings |
| |
Included
in AOCI |
| ||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Related party investments
|
| | | $ | 93.1 | | | | | $ | 0.1 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 93.2 | | |
Other invested assets included in other assets
|
| | | | 5.5 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5.5 | | |
Funds withheld receivables
|
| | | | 46.4 | | | | | | — | | | | | | — | | | | | | 6.1 | | | | | | (1.0) | | | | | | — | | | | | | (2.4) | | | | | | 49.1 | | |
Total assets at fair value
|
| | | $ | 145.0 | | | | | $ | 0.1 | | | | | $ | — | | | | | $ | 6.1 | | | | | $ | (1.0) | | | | | $ | — | | | | | $ | (2.4) | | | | | $ | 147.8 | | |
|
| | |
Balance at
Beginning of Period |
| |
Total (Gains) Losses
|
| |
Purchases
|
| |
Sales
|
| |
Settlements
|
| |
Net
transfer In (Out) of Level 3 |
| |
Balance at
End of Period |
| |||||||||||||||||||||||||||
| | |
Included
in Earnings |
| |
Included
in AOCI |
| ||||||||||||||||||||||||||||||||||||||||||
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves
|
| | | $ | 1,653.3 | | | | | $ | 44.3 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (32.8) | | | | | $ | — | | | | | $ | 1,664.8 | | |
Total liabilities at fair value
|
| | | $ | 1,653.3 | | | | | $ | 44.3 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (32.8) | | | | | $ | — | | | | | $ | 1,664.8 | | |
|
| | |
Six months ended March 31, 2017
|
| |||||||||||||||||||||||||||||||||||||||||||||
| | |
Balance at
Beginning of Period |
| |
Total Gains (Losses)
|
| |
Purchases
|
| |
Sales
|
| |
Settlements
|
| |
Net
transfer In (Out) of Level 3(a) |
| |
Balance at
End of Period |
| |||||||||||||||||||||||||||
| | |
Included
in Earnings |
| |
Included
in AOCI |
| ||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Related party investments
|
| | | $ | 98.4 | | | | | $ | (5.2) | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 93.2 | | |
Other invested assets included in other assets
|
| | | | 5.5 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5.5 | | |
Funds withheld receivables
|
| | | | 78.1 | | | | | | (1.3) | | | | | | — | | | | | | 9.1 | | | | | | (7.3) | | | | | | — | | | | | | (29.5) | | | | | | 49.1 | | |
Total assets at fair value
|
| | | $ | 182.0 | | | | | $ | (6.5) | | | | | $ | — | | | | | $ | 9.1 | | | | | $ | (7.3) | | | | | $ | — | | | | | $ | (29.5) | | | | | $ | 147.8 | | |
|
| | |
Balance at
Beginning of Period |
| |
Total (Gains) Losses
|
| |
Purchases
|
| |
Sales
|
| |
Settlements
|
| |
Net
transfer In (Out) of Level 3 |
| |
Balance at
End of Period |
| |||||||||||||||||||||||||||
| | |
Included
in Earnings |
| |
Included
in AOCI |
| ||||||||||||||||||||||||||||||||||||||||||
Liabilities
|
| | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves
|
| | | $ | 1,685.9 | | | | | $ | 30.9 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (52.0) | | | | | $ | — | | | | | $ | 1,664.8 | | |
Total liabilities at fair value
|
| | | $ | 1,685.9 | | | | | $ | 30.9 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (52.0) | | | | | $ | — | | | | | $ | 1,664.8 | | |
|
| | |
Three months ended March 31, 2016
|
| |||||||||||||||||||||||||||||||||||||||||||||
| | |
Balance at
Beginning of Period |
| |
Total Gains (Losses)
|
| |
Purchases
|
| |
Sales
|
| |
Settlements
|
| |
Net
transfer In (Out) of Level 3 |
| |
Balance at
End of Period |
| |||||||||||||||||||||||||||
| | |
Included
in Earnings |
| |
Included
in AOCI |
| ||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Related party investments
|
| | | $ | 61.8 | | | | | $ | (2.5) | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 59.3 | | |
Other invested assets included in
other assets |
| | | | 5.5 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5.5 | | |
Funds withheld receivables
|
| | | | 65.1 | | | | | | (0.3) | | | | | | — | | | | | | 3.1 | | | | | | (3.4) | | | | | | — | | | | | | — | | | | | | 64.5 | | |
Total assets at fair value
|
| | | $ | 132.4 | | | | | $ | (2.8) | | | | | $ | — | | | | | $ | 3.1 | | | | | $ | (3.4) | | | | | $ | — | | | | | $ | — | | | | | $ | 129.3 | | |
|
| | |
Balance at
Beginning of Period |
| |
Total (Gains) Losses
|
| |
Purchases
|
| |
Sales
|
| |
Settlements
|
| |
Net
transfer In (Out) of Level 3 |
| |
Balance at
End of Period |
| |||||||||||||||||||||||||||
| | |
Included
in Earnings |
| |
Included
in AOCI |
| ||||||||||||||||||||||||||||||||||||||||||
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves
|
| | | $ | 1,682.5 | | | | | $ | 40.6 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (36.6) | | | | | $ | — | | | | | $ | 1,686.5 | | |
Total liabilities at fair value
|
| | | $ | 1,682.5 | | | | | $ | 40.6 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (36.6) | | | | | $ | — | | | | | $ | 1,686.5 | | |
|
| | |
Six months ended March 31, 2016
|
| |||||||||||||||||||||||||||||||||||||||||||||
| | |
Balance at
Beginning of Period |
| |
Total Gains (Losses)
|
| |
Purchases
|
| |
Sales
|
| |
Settlements
|
| |
Net
transfer In (Out) of Level 3 |
| |
Balance at
End of Period |
| |||||||||||||||||||||||||||
| | |
Included
in Earnings |
| |
Included
in AOCI |
| ||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Corporate fixed maturity securities AFS
|
| | | $ | 14.1 | | | | | $ | (0.5) | | | | | $ | — | | | | | $ | — | | | | | $ | (13.6) | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Related party investments
|
| | | | 61.7 | | | | | | (2.4) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 59.3 | | |
Other invested assets included in other assets
|
| | | | 2.8 | | | | | | 2.7 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5.5 | | |
Funds withheld receivables
|
| | | | 74.7 | | | | | | (1.9) | | | | | | — | | | | | | 8.1 | | | | | | (16.4) | | | | | | — | | | | | | — | | | | | | 64.5 | | |
Total assets at fair value
|
| | | $ | 153.3 | | | | | $ | (2.1) | | | | | $ | — | | | | | $ | 8.1 | | | | | $ | (30.0) | | | | | $ | — | | | | | $ | — | | | | | $ | 70.0 | | |
|
| | |
Balance at
Beginning of Period |
| |
Total (Gains) Losses
|
| |
Purchases
|
| |
Sales
|
| |
Settlements
|
| |
Net
transfer In (Out) of Level 3 |
| |
Balance at
End of Period |
| |||||||||||||||||||||||||||
| | |
Included
in Earnings |
| |
Included
in AOCI |
| ||||||||||||||||||||||||||||||||||||||||||
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves
|
| | | $ | 1,731.9 | | | | | $ | 28.5 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (73.9) | | | | | $ | — | | | | | $ | 1,686.5 | | |
Total liabilities at fair value
|
| | | $ | 1,731.9 | | | | | $ | 28.5 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (73.9) | | | | | $ | — | | | | | $ | 1,686.5 | | |
|
| | |
March 31, 2017
|
| |||||||||||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Fair Value
|
| |
Carrying Amount
|
| |||||||||||||||
Assetss(a) | | | | | | | |||||||||||||||||||||||||
Policy loans, included in funds withheld receivables
|
| | | $ | — | | | | | $ | — | | | | | $ | 8.3 | | | | | $ | 8.3 | | | | | $ | 8.3 | | |
Total financial assets
|
| | | $ | — | | | | | $ | — | | | | | $ | 8.3 | | | | | $ | 8.3 | | | | | $ | 8.3 | | |
|
| | |
September 30, 2016
|
| |||||||||||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Fair Value
|
| |
Carrying Amount
|
| |||||||||||||||
Assets(a) | | | | | | | |||||||||||||||||||||||||
Policy loans, included in funds withheld receivables
|
| | | $ | — | | | | | $ | — | | | | | $ | 8.5 | | | | | $ | 8.5 | | | | | $ | 8.5 | | |
Total financial assets
|
| | | $ | — | | | | | $ | — | | | | | $ | 8.5 | | | | | $ | 8.5 | | | | | $ | 8.5 | | |
|
| | |
March 31, 2017
|
| |||||||||||||||||||||||||||
| | |
Cost or
Amortized Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized Losses |
| |
Fair
Value |
| |
Carrying
Value |
| |||||||||||||||
Funds withheld receivables with FGL | | | | | | | |||||||||||||||||||||||||
Corporates
|
| | | $ | 661.1 | | | | | $ | 10.0 | | | | | $ | (25.8) | | | | | $ | 645.3 | | | | | $ | 645.3 | | |
Asset/Mortgage-backed securities
|
| | | | 197.8 | | | | | | 1.1 | | | | | | (4.9) | | | | | | 194.0 | | | | | | 194.0 | | |
Municipals
|
| | | | 12.0 | | | | | | 0.1 | | | | | | (0.3) | | | | | | 11.8 | | | | | | 11.8 | | |
Government bonds
|
| | | | 1.1 | | | | | | — | | | | | | (0.1) | | | | | | 1.0 | | | | | | 1.0 | | |
Preferred stock
|
| | | | 8.5 | | | | | | 0.1 | | | | | | (0.4) | | | | | | 8.2 | | | | | | 8.2 | | |
Total funds withheld receivables with FGL
|
| | | | 880.5 | | | | | | 11.3 | | | | | | (31.5) | | | | | | 860.3 | | | | | | 860.3 | | |
Funds withheld receivables with third parties | | | | | | | |||||||||||||||||||||||||
Corporates
|
| | | | 404.4 | | | | | | 5.9 | | | | | | (7.2) | | | | | | 403.1 | | | | | | 403.1 | | |
Asset/Mortgage-backed securities
|
| | | | 135.4 | | | | | | 2.4 | | | | | | (1.1) | | | | | | 136.7 | | | | | | 136.7 | | |
Municipals
|
| | | | 56.2 | | | | | | 0.7 | | | | | | (0.4) | | | | | | 56.5 | | | | | | 56.5 | | |
Government bonds
|
| | | | 83.0 | | | | | | — | | | | | | (3.5) | | | | | | 79.5 | | | | | | 79.5 | | |
Agency bonds
|
| | | | 7.3 | | | | | | — | | | | | | — | | | | | | 7.3 | | | | | | 7.3 | | |
Total funds withheld receivables with third parties
|
| | | | 686.3 | | | | | | 9.0 | | | | | | (12.2) | | | | | | 683.1 | | | | | | 683.1 | | |
Total fixed maturity and equity securities included in
funds withheld receivables |
| | | | 1,566.8 | | | | | | 20.3 | | | | | | (43.7) | | | | | | 1,543.4 | | | | | | 1,543.4 | | |
Call option receivable from FGL included in funds withheld receivables
|
| | | | 8.9 | | | | | | 4.4 | | | | | | — | | | | | | 13.3 | | | | | | 13.3 | | |
Accrued interest
|
| | | | 17.0 | | | | | | — | | | | | | — | | | | | | 17.0 | | | | | | 17.0 | | |
Net receivables
|
| | | | 44.0 | | | | | | — | | | | | | — | | | | | | 44.0 | | | | | | 44.0 | | |
Policy loans and other
|
| | | | 8.3 | | | | | | — | | | | | | — | | | | | | 8.3 | | | | | | 8.3 | | |
Total funds withheld receivables
|
| | | $ | 1,645.0 | | | | | $ | 24.7 | | | | | $ | (43.7) | | | | | $ | 1,626.0 | | | | | $ | 1,626.0 | | |
|
| | |
September 30, 2016
|
| |||||||||||||||||||||||||||
| | |
Cost or
Amortized Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized Losses |
| |
Fair
Value |
| |
Carrying
Value |
| |||||||||||||||
Funds withheld receivables with FGL | | | | | | | |||||||||||||||||||||||||
Corporates
|
| | | $ | 638.5 | | | | | $ | 18.2 | | | | | $ | (29.5) | | | | | $ | 627.2 | | | | | $ | 627.2 | | |
Asset/Mortgage-backed securities
|
| | | | 238.8 | | | | | | 0.6 | | | | | | (7.9) | | | | | | 231.5 | | | | | | 231.5 | | |
Municipals
|
| | | | 12.1 | | | | | | 0.7 | | | | | | — | | | | | | 12.8 | | | | | | 12.8 | | |
Government bonds
|
| | | | 1.1 | | | | | | — | | | | | | — | | | | | | 1.1 | | | | | | 1.1 | | |
Preferred stock
|
| | | | 8.8 | | | | | | 0.3 | | | | | | (0.9) | | | | | | 8.2 | | | | | | 8.2 | | |
Total funds withheld receivables with FGL
|
| | | | 899.3 | | | | | | 19.8 | | | | | | (38.3) | | | | | | 880.8 | | | | | | 880.8 | | |
Funds withheld receivables with third parties | | | | | | | |||||||||||||||||||||||||
Corporates
|
| | | | 390.0 | | | | | | 18.8 | | | | | | (2.7) | | | | | | 406.1 | | | | | | 406.1 | | |
Asset/Mortgage-backed securities
|
| | | | 118.7 | | | | | | 1.9 | | | | | | (1.7) | | | | | | 118.9 | | | | | | 118.9 | | |
Municipals
|
| | | | 49.5 | | | | | | 4.1 | | | | | | — | | | | | | 53.6 | | | | | | 53.6 | | |
Government bonds
|
| | | | 67.7 | | | | | | 1.3 | | | | | | (0.2) | | | | | | 68.8 | | | | | | 68.8 | | |
Agency bonds
|
| | | | 6.6 | | | | | | 0.3 | | | | | | — | | | | | | 6.9 | | | | | | 6.9 | | |
Total funds withheld receivables with third parties
|
| | | | 632.5 | | | | | | 26.4 | | | | | | (4.6) | | | | | | 654.3 | | | | | | 654.3 | | |
Total fixed maturity and equity securities included in
funds withheld receivables |
| | | | 1,531.8 | | | | | | 46.2 | | | | | | (42.9) | | | | | | 1,535.1 | | | | | | 1,535.1 | | |
Call option receivable from FGL included in funds withheld receivables
|
| | | | 9.8 | | | | | | 1.5 | | | | | | — | | | | | | 11.3 | | | | | | 11.3 | | |
Accrued interest
|
| | | | 17.8 | | | | | | — | | | | | | — | | | | | | 17.8 | | | | | | 17.8 | | |
Net receivables
|
| | | | 77.7 | | | | | | — | | | | | | — | | | | | | 77.7 | | | | | | 77.7 | | |
Policy loans and other
|
| | | | 8.5 | | | | | | — | | | | | | — | | | | | | 8.5 | | | | | | 8.5 | | |
Total funds withheld receivables
|
| | | $ | 1,645.6 | | | | | $ | 47.7 | | | | | $ | (42.9) | | | | | $ | 1,650.4 | | | | | $ | 1,650.4 | | |
|
| | |
March 31, 2017
|
| |||||||||
| | |
Amortized Cost
|
| |
Fair Value
|
| ||||||
Corporate, Non-structured Hybrids, Municipal and Preferred stock: | | | | ||||||||||
Due in one year or less
|
| | | $ | 18.6 | | | | | $ | 18.6 | | |
Due after one year through five years
|
| | | | 201.6 | | | | | | 198.0 | | |
Due after five years through ten years
|
| | | | 498.0 | | | | | | 496.2 | | |
Due after ten years
|
| | | | 496.3 | | | | | | 481.6 | | |
Subtotal
|
| | | | 1,214.5 | | | | | | 1,194.4 | | |
Other securities which provide for periodic payments: | | | | ||||||||||
Asset/Mortgage-backed securities
|
| | | | 333.2 | | | | | | 330.7 | | |
Structured hybrids
|
| | | | 19.1 | | | | | | 18.3 | | |
Total fixed maturity and equity securities included in funds
withheld receivables |
| | |
$
|
1,566.8
|
| | | |
$
|
1,543.4
|
| |
|
| | |
Three months ended March 31,
|
| |
Six months ended March 31,
|
| ||||||||||||||||||
| | |
2017
|
| |
2016
|
| |
2017
|
| |
2016
|
| ||||||||||||
Realized losses on available-for-sale securities not included in funds withheld receivables
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (0.5) | | |
Realized and unrealized (losses) gains on related party
investments and other invested assets not included in funds withheld receivables |
| | | | (0.3) | | | | | | — | | | | | | (3.7) | | | | | | 4.4 | | |
Realized and unrealized gains (losses) on derivative instruments not included in funds withheld receivables
|
| | | | 5.8 | | | | | | (1.4) | | | | | | 8.9 | | | | | | 0.5 | | |
Realized and unrealized gains (losses) on funds withheld receivables
|
| | | | 35.4 | | | | | | 41.7 | | | | | | 7.0 | | | | | | 24.2 | | |
Net investment gains (losses)
|
| | | $ | 40.9 | | | | | $ | 40.3 | | | | | $ | 12.2 | | | | | $ | 28.6 | | |
|
Description
|
| |
Balance Sheet Classification
|
| |
March 31,
2017 |
| |
September 30,
2016 |
| ||||||
Assets: | | | | | ||||||||||||
HGI Energy Notes
|
| |
Related party investments
|
| | | $ | 91.7 | | | | | $ | 91.0 | | |
Spectrum Brands(a)
|
| |
Related party investments
|
| | | | 2.0 | | | | | | — | | |
Salus Preferred Equity
|
| |
Related party investments
|
| | | | 1.2 | | | | | | 6.7 | | |
EIC Preferred Equity
|
| |
Related party investments
|
| | | | — | | | | | | — | | |
Salus CLO
|
| |
Related party investments
|
| | | | 0.3 | | | | | | 0.7 | | |
Funds withheld receivables with FGL
|
| |
Funds withheld receivable
|
| | | | 930.4 | | | | | | 978.8 | | |
Liabilities: | | | | | ||||||||||||
Insurance reserves
|
| | Insurance reserves | | | | | 1,003.6 | | | | | | 1,054.1 | | |
Accounts payable to FGL
|
| | Other liabilities | | | | | — | | | | | | — | | |
Accounts payable to HRG
|
| | Other liabilities | | | | | 0.2 | | | | | | 0.2 | | |
| | |
Three months ended March 31,
|
| |
Six months ended March 31,
|
| ||||||||||||||||||
Statement of Operations
|
| |
2017
|
| |
2016
|
| |
2017
|
| |
2016
|
| ||||||||||||
Net investment income
|
| | | $ | — | | | | | $ | 0.7 | | | | | $ | 0.1 | | | | | $ | 1.5 | | |
Net investment gains (losses)
|
| | | | 26.5 | | | | | | 16.4 | | | | | | 21.5 | | | | | | 4.3 | | |
Benefits and other changes in policy reserves
|
| | | | 22.7 | | | | | | 15.7 | | | | | | 21.0 | | | | | | 6.4 | | |
Acquisition and operating expenses
|
| | | | 0.2 | | | | | | — | | | | | | 0.3 | | | | | | — | | |
| | |
September 30,
|
| |||||||||
| | |
2016
|
| |
2015
|
| ||||||
ASSETS
|
| | | ||||||||||
Related party investments (Note 9)
|
| | | $ | 98.4 | | | | | $ | 75.4 | | |
Cash and cash equivalents
|
| | | | 32.1 | | | | | | 18.0 | | |
Funds withheld receivables at fair value (Note 6)
|
| | | | 1,650.4 | | | | | | 1,710.1 | | |
Income tax receivable
|
| | | | 16.5 | | | | | | 22.5 | | |
Deferred tax assets (Note 8)
|
| | | | — | | | | | | 23.6 | | |
Other assets (Note 7)
|
| | | | 19.0 | | | | | | 34.3 | | |
Total assets
|
| | | $ | 1,816.4 | | | | | $ | 1,883.9 | | |
LIABILITIES AND SHAREHOLDER’S EQUITY
|
| | | ||||||||||
Insurance reserves at fair value
|
| | | $ | 1,685.9 | | | | | $ | 1,731.9 | | |
Other liabilities
|
| | | | 9.9 | | | | | | 12.6 | | |
Total liabilities
|
| | | | 1,695.8 | | | | | | 1,744.5 | | |
Commitments and contingencies
|
| | | ||||||||||
Shareholder’s equity: | | | | ||||||||||
Common stock ($1 par value, 425,000 shares authorized, 377,400 shares issued and outstanding at September 30, 2016 and 2015)
|
| | | | 0.4 | | | | | | 0.4 | | |
Additional paid-in capital
|
| | | | 177.7 | | | | | | 178.0 | | |
Accumulated deficit
|
| | | | (57.7) | | | | | | (39.0) | | |
Accumulated other comprehensive income
|
| | | | 0.2 | | | | | | — | | |
Total shareholder’s equity
|
| | | | 120.6 | | | | | | 139.4 | | |
Total liabilities and shareholder’s equity
|
| | | $ | 1,816.4 | | | | | $ | 1,883.9 | | |
|
| | |
Year ended September 30,
|
| |||||||||||||||
| | |
2016
|
| |
2015
|
| |
2014
|
| |||||||||
Revenues: | | | | | |||||||||||||||
Net investment income
|
| | | $ | 2.4 | | | | | $ | 8.9 | | | | | $ | 9.3 | | |
Net investment gains (losses)
|
| | | | 148.0 | | | | | | (107.7) | | | | | | 135.0 | | |
Total revenues
|
| | | | 150.4 | | | | | | (98.8) | | | | | | 144.3 | | |
Benefits and expenses: | | | | | |||||||||||||||
Benefits and other changes in policy reserves
|
| | | | 153.2 | | | | | | (43.5) | | | | | | 92.8 | | |
Acquisition and operating expenses
|
| | | | 9.7 | | | | | | 13.4 | | | | | | 11.4 | | |
Total benefits and expenses
|
| | | | 162.9 | | | | | | (30.1) | | | | | | 104.2 | | |
Operating (loss) income
|
| | | | (12.5) | | | | | | (68.7) | | | | | | 40.1 | | |
(Loss) income before income taxes
|
| | | | (12.5) | | | | | | (68.7) | | | | | | 40.1 | | |
Income tax expense (benefit)
|
| | | | 6.2 | | | | | | (24.0) | | | | | | 15.7 | | |
Net (loss) income
|
| | | $ | (18.7) | | | | | $ | (44.7) | | | | | $ | 24.4 | | |
Other comprehensive income: | | | | | |||||||||||||||
Unrealized investment gains: | | | | | |||||||||||||||
Changes in unrealized investment gains before reclassification adjustment
|
| | | $ | 0.3 | | | | | $ | — | | | | | $ | — | | |
Changes in unrealized investment gains after reclassification adjustment
|
| | | | 0.3 | | | | | | — | | | | | | — | | |
Changes in deferred income tax asset/liability
|
| | | | (0.1) | | | | | | — | | | | | | — | | |
Net unrealized gains on investments
|
| | | | 0.2 | | | | | | — | | | | | | — | | |
Net change to derive comprehensive income for the period
|
| | | | 0.2 | | | | | | — | | | | | | — | | |
Comprehensive (loss) income
|
| | | $ | (9.9) | | | | | $ | (44.7) | | | | | $ | 24.4 | | |
|
| | |
Common
Stock |
| |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |
Accumulated
Other Comprehensive Income |
| |
Total
Shareholder’s Equity |
| |||||||||||||||
Balances at September 30, 2013
|
| | | $ | 0.4 | | | | | $ | 166.2 | | | | | $ | (18.7) | | | | | $ | — | | | | | $ | 147.9 | | |
Net income
|
| | | | — | | | | | | — | | | | | | 24.4 | | | | | | — | | | | | | 24.4 | | |
Comprehensive income
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 24.4 | | |
Capital distributions
|
| | | | — | | | | | | (12.2) | | | | | | — | | | | | | — | | | | | | (12.2) | | |
Balances at September 30, 2014
|
| | | | 0.4 | | | | | | 154.0 | | | | | | 5.7 | | | | | | — | | | | | | 160.1 | | |
Net Loss
|
| | | | — | | | | | | — | | | | | | (44.7) | | | | | | — | | | | | | (44.7) | | |
Comprehensive loss
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | (44.7) | | |
Capital contributions
|
| | | | — | | | | | | 24.0 | | | | | | — | | | | | | — | | | | | | 24.0 | | |
Balances at September 30, 2015
|
| | | | 0.4 | | | | | | 178.0 | | | | | | (39.0) | | | | | | — | | | | | | 139.4 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | (18.7) | | | | | | — | | | | | | (18.7) | | |
Unrealized investment gains, net
|
| | | | — | | | | | | — | | | | | | — | | | | | | 0.2 | | | | | | 0.2 | | |
Comprehensive loss
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | (18.5) | | |
Stock Compensation
|
| | | | — | | | | | | (0.3) | | | | | | — | | | | | | — | | | | | | (0.3) | | |
Balance at September 30, 2016
|
| | | $ | 0.4 | | | | | $ | 177.7 | | | | | $ | (57.7) | | | | | $ | 0.2 | | | | | $ | 120.6 | | |
|
| | |
Fiscal
|
| |||||||||||||||
| | |
2016
|
| |
2015
|
| |
2014
|
| |||||||||
Cash flows from operating activities: | | | | | |||||||||||||||
Net (loss) income
|
| | | $ | (18.7) | | | | | $ | (44.7) | | | | | $ | 24.4 | | |
Adjustments to reconcile net (loss) income to operating cash flows: | | | | | | | | | | | | | | | | | | | |
Deferred income taxes
|
| | | | 23.6 | | | | | | (7.7) | | | | | | 6.3 | | |
Net recognized gains (losses) on investments and derivatives
|
| | | | 4.5 | | | | | | 57.0 | | | | | | (20.3) | | |
Changes in operating assets and liabilities
|
| | | | (21.1) | | | | | | (73.3) | | | | | | (26.1) | | |
Net change in cash due to operating activities
|
| | | | (11.7) | | | | | | (68.7) | | | | | | (15.7) | | |
Cash flows from investing activities: | | | | | |||||||||||||||
Proceeds from investments, sold, matured or repaid
|
| | | | 33.0 | | | | | | 16.9 | | | | | | 78.7 | | |
Cost of investments acquired
|
| | | | (7.2) | | | | | | (9.4) | | | | | | (37.1) | | |
Net change in cash due to investing activities
|
| | | | 25.8 | | | | | | 7.5 | | | | | | 41.6 | | |
Cash flows from financing activities: | | | | | |||||||||||||||
Capital contributions
|
| | | | — | | | | | | 24.0 | | | | | | — | | |
Dividends paid
|
| | | | — | | | | | | — | | | | | | (12.2) | | |
Net change in cash due to financing activities
|
| | | | — | | | | | | 24.0 | | | | | | (12.2) | | |
Net change in cash and cash equivalents
|
| | | | 14.1 | | | | | | (37.2) | | | | | | 13.7 | | |
Cash and cash equivalents at beginning of period
|
| | | | 18.0 | | | | | | 55.2 | | | | | | 41.5 | | |
Cash and cash equivalents at end of period
|
| | | $ | 32.1 | | | | | $ | 18.0 | | | | | $ | 55.2 | | |
Supplemental disclosures of cash flow information | | | | | |||||||||||||||
Taxes paid during the year
|
| | | $ | — | | | | | $ | 6.6 | | | | | $ | 16.0 | | |
Taxes received during the year
|
| | | | 21.9 | | | | | | — | | | | | | — | | |
| | |
Purchase Price
|
| |||
Cash paid at November 3, 2014 close
|
| | | $ | 17.9 | | |
Cash purchase price adjustments
|
| | | | (1.5) | | |
Contingent consideration premium increase benefit
|
| | | | 2.8 | | |
Total purchase price
|
| | | $ | 19.2 | | |
|
| | |
Purchase Price Allocation
|
| |||
Cash and cash equivalents
|
| | | $ | 8.5 | | |
Funds withheld receivables
|
| | | | 359.5 | | |
Insurance reserves
|
| | | | (346.9) | | |
Other liabilities
|
| | | | (1.9) | | |
Total net assets acquired
|
| | | $ | 19.2 | | |
|
| | | | | |
September 30,
|
| |||||||||
Derivatives not designated as hedging instruments:
|
| |
Classification
|
| |
2016
|
| |
2015
|
| ||||||
Assets: | | | | | ||||||||||||
Call option receivable from FGL
|
| |
Funds withheld receivables
|
| | | $ | 11.3 | | | | | $ | 5.4 | | |
Call options
|
| | Other assets | | | | | 5.9 | | | | | | 1.0 | | |
| | | | | | | $ | 17.2 | | | | | $ | 6.4 | | |
|
| | | | | |
Fiscal
|
| |||||||||||||||
Classification
|
| |
Derivatives Not
Designated as Hedging Instruments |
| |
2016
|
| |
2015
|
| |
2014
|
| |||||||||
Revenues: | | | | | | |||||||||||||||||
Net investment gains (losses)
|
| | Call options | | | | $ | 3.8 | | | | | $ | (7.6) | | | | | $ | 25.7 | | |
| | |
September 30, 2016
|
| |
September 30, 2015
|
| ||||||||||||||||||||||||||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Fair Value
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Fair Value
|
| ||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Fixed maturity and equity securities included in funds withheld receivables
|
| | | $ | 69.9 | | | | | $ | 1,387.1 | | | | | $ | 78.1 | | | | | $ | 1,535.1 | | | | | $ | 8.4 | | | | | $ | 1,555.0 | | | | | $ | 74.7 | | | | | $ | 1,638.1 | | |
Call option receivable from FGL included in funds withheld receivables
|
| | | | — | | | | | | 11.3 | | | | | | — | | | | | | 11.3 | | | | | | — | | | | | | 5.4 | | | | | | — | | | | | | 5.4 | | |
Related party investments
|
| | | | — | | | | | | — | | | | | | 98.4 | | | | | | 98.4 | | | | | | — | | | | | | 7.0 | | | | | | 61.7 | | | | | | 68.7 | | |
Corporate fixed maturity securities included in
other assets |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 14.1 | | | | | | 14.1 | | |
Other invested assets included
in other assets |
| | | | — | | | | | | — | | | | | | 5.5 | | | | | | 5.5 | | | | | | — | | | | | | — | | | | | | 2.8 | | | | | | 2.8 | | |
Total financial assets
|
| | | $ | 69.9 | | | | | $ | 1,398.4 | | | | | $ | 182.0 | | | | | $ | 1,650.3 | | | | | $ | 8.4 | | | | | $ | 1,567.4 | | | | | $ | 153.3 | | | | | $ | 1,729.1 | | |
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves
|
| | | $ | — | | | | | $ | — | | | | | $ | 1,685.9 | | | | | $ | 1,685.9 | | | | | $ | — | | | | | $ | — | | | | | $ | 1,731.9 | | | | | $ | 1,731.9 | | |
Total financial liabilities
|
| | | $ | — | | | | | $ | — | | | | | $ | 1,685.9 | | | | | $ | 1,685.9 | | | | | $ | — | | | | | $ | — | | | | | $ | 1,731.9 | | | | | $ | 1,731.9 | | |
|
| | |
Fair Value at
|
| | | | | | | |
Range (Weighted average)
|
| ||||||||||||
Assets
|
| |
September 30,
2016 |
| |
September 30,
2015 |
| |
Valuation
Technique |
| |
Unobservable Input(s)
|
| |
September 30,
2016 |
| |
September 30,
2015 |
| ||||||
Corporate fixed maturity securities included in other assets
|
| | | $ | — | | | | | $ | 14.1 | | | | Broker-quoted | | | Offered quotes | | |
—%
|
| |
83%
|
|
Related party investments −
HGI Energy |
| | | | 91.0 | | | | | | 50.0 | | | | Discounted Cash Flow |
| | Discount rate | | |
0.79%
|
| |
9%
|
|
Related party investments −
Salus preferred equity |
| | | | 6.7 | | | | | | 10.4 | | | |
Market-
approach |
| | Yield | | |
11%
|
| |
11%
|
|
| | | | | | | | | | | | | | | | | |
RadioShack Corp.
Recovery |
| |
5.5%
|
| |
30%
|
|
| | | | | | | | | | | | | | | | | | Discount Rate | | |
15%
|
| |
15%
|
|
| | | | | | | | | | | | | | | | | | Salus CLO Equity |
| |
28.4%
|
| |
41.8%
|
|
Related party investments −
Salus CLO equity tranche |
| | | | 0.7 | | | | | | 1.3 | | | | Third party valuation |
| | Offered quote | | |
28.4%
|
| |
41.8%
|
|
| | | | | | | | | | | | | | | | | | Discount rate | | |
15%
|
| |
15%
|
|
| | | | | | | | | | | | | | | | | | Constant default rate |
| |
—
|
| |
2%
|
|
| | | | | | | | | | | | | | | | | | RSH Recovery | | |
5.5%
|
| |
30%
|
|
| | | | | | | | | | | | | | | | | | Other loan recoveries |
| |
0% – 100%
|
| |
4% – 100%
|
|
| | |
Fair Value at
|
| | | | | | | |
Range (Weighted average)
|
| ||||||||||||
Assets
|
| |
September 30,
2016 |
| |
September 30,
2015 |
| |
Valuation
Technique |
| |
Unobservable Input(s)
|
| |
September 30,
2016 |
| |
September 30,
2015 |
| ||||||
Other invested assets included in
other assets |
| | | | 5.5 | | | | | | 2.8 | | | |
Discounted
Cash Flow |
| | Probability of collection |
| |
100%
|
| |
50%
|
|
| | | | | | | | | | | | | | | | | | Discount rate | | |
10%
|
| |
10%
|
|
Funds withheld receivables:
|
| | | | | | | ||||||||||||||||||
Fixed maturity and equity securities
|
| | | | 35.2 | | | | | | 39.1 | | | |
Matrix pricing
|
| | Quoted prices | | |
98% – 122%
(109%) |
| |
100% – 122%
(112%) |
|
Fixed maturity securities
|
| | | | 5.4 | | | | | | 19.2 | | | |
Loan
Recovery Value |
| | Recovery rate | | |
56% – 100%
(82%) |
| |
6% – 12%
(8%) |
|
Fixed maturity securities
|
| | | | 35.7 | | | | | | 6.7 | | | | Broker-quoted | | | Offered quotes | | |
97% – 100%
(100%) |
| |
99% – 103%
(101%) |
|
Loan participations
|
| | | | 1.8 | | | | | | 9.7 | | | |
Loan
Recovery Value |
| | Recovery rate | | |
52% – 100%
(71%) |
| |
100%
|
|
Total
|
| | | $ | 182.0 | | | | | $ | 153.3 | | | | | | | ||||||||
Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
Insurance reserves
|
| | | $ | 1,685.9 | | | | | $ | 1,731.9 | | | |
Discounted
cash flow |
| |
Non-performance
risk spread |
| |
0.32%
|
| |
0.16% – 0.46%
|
|
| | | | | | | | | | | | | | | | | | Risk margin to reflect uncertainty |
| |
0.50%
|
| |
0.50% – 1.00%
|
|
Total
|
| | | $ | 1,685.9 | | | | | $ | 1,731.9 | | | | | | | ||||||||
|
| | |
Fiscal 2016
|
| |||||||||||||||||||||||||||||||||||||||||||||
| | |
Balance at
Beginning of Period |
| |
Total Gains (Losses)
|
| |
Purchases
|
| |
Sales
|
| |
Settlements
|
| |
Net
Transfer In (Out) of Level 3s(a) |
| |
Balance at
End of Period |
| |||||||||||||||||||||||||||
| | |
Included
in Earnings |
| |
Included
in AOCI |
| ||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Corporate fixed maturity securities
|
| | | $ | 14.1 | | | | | $ | (0.5) | | | | | $ | — | | | | | $ | — | | | | | $ | (13.6) | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Related party investments
|
| | | | 61.7 | | | | | | (9.3) | | | | | | — | | | | | | 46.0 | | | | | | — | | | | | | — | | | | | | — | | | | | | 98.4 | | |
Other invested assets included
in other assets |
| | | | 2.8 | | | | | | 2.7 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5.5 | | |
Funds withheld receivables
|
| | | | 74.7 | | | | | | (3.6) | | | | | | — | | | | | | 36.2 | | | | | | (34.4) | | | | | | — | | | | | | 5.2 | | | | | | 78.1 | | |
Total assets at fair value
|
| | | $ | 153.3 | | | | | $ | (10.7) | | | | | $ | — | | | | | $ | 82.2 | | | | | $ | (48.0) | | | | | $ | — | | | | | $ | 5.2 | | | | | $ | 182.0 | | |
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves
|
| | | $ | 1,731.9 | | | | | $ | 162.7 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (208.7) | | | | | $ | — | | | | | $ | 1,685.9 | | |
Total liabilities at fair value
|
| | | $ | 1,731.9 | | | | | $ | 162.7 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (208.7) | | | | | $ | — | | | | | $ | 1,685.9 | | |
|
| | |
Fiscal 2015
|
| |||||||||||||||||||||||||||||||||||||||||||||
| | |
Balance at
Beginning of Period |
| |
Total Gains (Losses)
|
| |
Purchases
|
| |
Sales
|
| |
Settlements
|
| |
Net
Transfer In (Out) of Level 3(a) |
| |
Balance at
End of Period |
| |||||||||||||||||||||||||||
| | |
Included
in Earnings |
| |
Included
in AOCI |
| ||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Corporate fixed maturity securities
|
| | | $ | 16.3 | | | | | $ | (2.2) | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 14.1 | | |
Related party investments
|
| | | | 115.2 | | | | | | (56.2) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2.7 | | | | | | 61.7 | | |
Other invested assets included
in other assets |
| | | | — | | | | | | (16.3) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 19.1 | | | | | | 2.8 | | |
Funds withheld receivables
|
| | | | 58.9 | | | | | | (0.5) | | | | | | — | | | | | | 30.4 | | | | | | (14.1) | | | | | | — | | | | | | — | | | | | | 74.7 | | |
Total assets at fair value
|
| | | $ | 190.4 | | | | | $ | (75.2) | | | | | $ | — | | | | | $ | 30.4 | | | | | $ | (14.1) | | | | | $ | — | | | | | $ | 21.8 | | | | | $ | 153.3 | | |
|
| | |
Balance at
Beginning of Period |
| |
Total (Gains) Losses
|
| |
Purchases
|
| |
Sales
|
| |
Settlements
|
| |
Net
transfer In (Out) of Level 3 |
| |
Balance at
End of Period |
| |||||||||||||||||||||||||||
| | |
Included
in Earnings |
| |
Included
in AOCI |
| ||||||||||||||||||||||||||||||||||||||||||
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves
|
| | | $ | 1,408.9 | | | | | $ | (46.2) | | | | | $ | — | | | | | $ | 444.7 | | | | | $ | — | | | | | $ | (75.5) | | | | | $ | — | | | | | $ | 1,731.9 | | |
Total liabilities at fair value
|
| | | $ | 1,408.9 | | | | | $ | (46.2) | | | | | $ | — | | | | | $ | 444.7 | | | | | $ | — | | | | | $ | (75.5) | | | | | $ | — | | | | | $ | 1,731.9 | | |
|
| | |
Fiscal 2014
|
| |||||||||||||||||||||||||||||||||||||||||||||
| | |
Balance at
Beginning of Period |
| |
Total Gains (Losses)
|
| |
Purchases
|
| |
Sales
|
| |
Settlements
|
| |
Net
Transfer In (Out) of Level 3 |
| |
Balance at
End of Period |
| |||||||||||||||||||||||||||
| | |
Included
in Earnings |
| |
Included
in AOCI |
| ||||||||||||||||||||||||||||||||||||||||||
Assets | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Corporate fixed maturity securities
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 16.3 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 16.3 | | |
Related party investments
|
| | | | — | | | | | | — | | | | | | — | | | | | | 115.2 | | | | | | — | | | | | | — | | | | | | — | | | | | | 115.2 | | |
Funds withheld receivables
|
| | | | 34.6 | | | | | | 1.5 | | | | | | — | | | | | | 23.5 | | | | | | (0.7) | | | | | | — | | | | | | — | | | | | | 58.9 | | |
Total assets at fair value
|
| | | $ | 34.6 | | | | | $ | 1.5 | | | | | $ | — | | | | | $ | 155.0 | | | | | $ | (0.7) | | | | | $ | — | | | | | $ | — | | | | | $ | 190.4 | | |
|
| | |
Balance at
Beginning of Period |
| |
Total (Gains) Losses
|
| |
Purchases
|
| |
Sales
|
| |
Settlements
|
| |
Net
transfer In (Out) of Level 3 |
| |
Balance at
End of Period |
| |||||||||||||||||||||||||||
| | |
Included
in Earnings |
| |
Included
in AOCI |
| ||||||||||||||||||||||||||||||||||||||||||
Liabilities | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Insurance reserves
|
| | | $ | 1,316.5 | | | | | $ | 106.2 | | | | | $ | — | | | | | $ | 150.6 | | | | | $ | — | | | | | $ | (164.4) | | | | | $ | — | | | | | $ | 1,408.9 | | |
Total liabilities at fair value
|
| | | $ | 1,316.5 | | | | | $ | 106.2 | | | | | $ | — | | | | | $ | 150.6 | | | | | $ | — | | | | | $ | (164.4) | | | | | $ | — | | | | | $ | 1,408.9 | | |
|
| | |
September 30, 2016
|
| |||||||||||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Fair Value
|
| |
Carrying
Amount |
| |||||||||||||||
Assets(a) | | | | | | | |||||||||||||||||||||||||
Policy loans, included in funds withheld receivables
|
| | | $ | — | | | | | $ | — | | | | | $ | 8.5 | | | | | $ | 8.5 | | | | | $ | 8.5 | | |
Total financial assets
|
| | | $ | — | | | | | $ | — | | | | | $ | 8.5 | | | | | $ | 8.5 | | | | | $ | 8.5 | | |
|
| | |
September 30, 2015
|
| |||||||||||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Fair Value
|
| |
Carrying
Amount |
| |||||||||||||||
Assets(a) | | | | | | | |||||||||||||||||||||||||
Policy loans, included in funds withheld receivables
|
| | | $ | — | | | | | $ | — | | | | | $ | 9.0 | | | | | $ | 9.0 | | | | | $ | 9.0 | | |
Other invested assets, included in other assets
|
| | | | — | | | | | | — | | | | | | 2.5 | | | | | | 2.5 | | | | | | 2.5 | | |
Related party investments
|
| | | | — | | | | | | — | | | | | | 6.7 | | | | | | 6.7 | | | | | | 6.7 | | |
Total financial assets
|
| | | $ | — | | | | | $ | — | | | | | $ | 18.2 | | | | | $ | 18.2 | | | | | $ | 18.2 | | |
|
| | |
September 30, 2016
|
| |||||||||||||||||||||||||||
| | |
Cost or
Amortized Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized Losses |
| |
Fair Value
|
| |
Carrying
Value |
| |||||||||||||||
Funds withheld receivables with FGL | | | | | | | |||||||||||||||||||||||||
Corporates
|
| | | $ | 638.5 | | | | | $ | 18.2 | | | | | $ | (29.5) | | | | | $ | 627.2 | | | | | $ | 627.2 | | |
Asset/Mortgage-backed securities
|
| | | | 238.8 | | | | | | 0.6 | | | | | | (7.9) | | | | | | 231.5 | | | | | | 231.5 | | |
Municipals
|
| | | | 12.1 | | | | | | 0.7 | | | | | | — | | | | | | 12.8 | | | | | | 12.8 | | |
Government bonds
|
| | | | 1.1 | | | | | | — | | | | | | — | | | | | | 1.1 | | | | | | 1.1 | | |
Preferred stock
|
| | | | 8.8 | | | | | | 0.3 | | | | | | (0.9) | | | | | | 8.2 | | | | | | 8.2 | | |
Total funds withheld receivables with FGL
|
| | | | 899.3 | | | | | | 19.8 | | | | | | (38.3) | | | | | | 880.8 | | | | | | 880.8 | | |
Funds withheld receivables with third parties | | | | | | | |||||||||||||||||||||||||
Corporates
|
| | | | 390.0 | | | | | | 18.8 | | | | | | (2.7) | | | | | | 406.1 | | | | | | 406.1 | | |
Asset/Mortgage-backed securities
|
| | | | 118.7 | | | | | | 1.9 | | | | | | (1.7) | | | | | | 118.9 | | | | | | 118.9 | | |
Municipals
|
| | | | 49.5 | | | | | | 4.1 | | | | | | — | | | | | | 53.6 | | | | | | 53.6 | | |
Government bonds
|
| | | | 67.7 | | | | | | 1.3 | | | | | | (0.2) | | | | | | 68.8 | | | | | | 68.8 | | |
Agency bonds
|
| | | | 6.6 | | | | | | 0.3 | | | | | | — | | | | | | 6.9 | | | | | | 6.9 | | |
Total funds withheld receivables with third parties
|
| | | | 632.5 | | | | | | 26.4 | | | | | | (4.6) | | | | | | 654.3 | | | | | | 654.3 | | |
Total fixed maturity and equity securities included in funds withheld receivables
|
| | | | 1,531.8 | | | | | | 46.2 | | | | | | (42.9) | | | | | | 1,535.1 | | | | | | 1,535.1 | | |
Call option receivable from FGL included in funds withheld receivables
|
| | | | 9.8 | | | | | | 1.5 | | | | | | — | | | | | | 11.3 | | | | | | 11.3 | | |
Accrued interest
|
| | | | 17.8 | | | | | | — | | | | | | — | | | | | | 17.8 | | | | | | 17.8 | | |
Net receivables
|
| | | | 77.7 | | | | | | — | | | | | | — | | | | | | 77.7 | | | | | | 77.7 | | |
Policy loans and other
|
| | | | 8.5 | | | | | | — | | | | | | — | | | | | | 8.5 | | | | | | 8.5 | | |
Total funds withheld receivables
|
| | | $ | 1,645.6 | | | | | $ | 47.7 | | | | | $ | (42.9) | | | | | $ | 1,650.4 | | | | | $ | 1,650.4 | | |
|
| | |
September 30, 2015
|
| |||||||||||||||||||||||||||
| | |
Cost or
Amortized Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized Losses |
| |
Fair Value
|
| |
Carrying
Value |
| |||||||||||||||
Funds withheld receivables with FGL | | | | | | | |||||||||||||||||||||||||
Corporates
|
| | | $ | 740.4 | | | | | $ | 4.5 | | | | | $ | (67.9) | | | | | $ | 677.0 | | | | | $ | 677.0 | | |
Asset/Mortgage-backed securities
|
| | | | 274.6 | | | | | | 1.3 | | | | | | (6.6) | | | | | | 269.3 | | | | | | 269.3 | | |
Municipals
|
| | | | 28.5 | | | | | | 0.1 | | | | | | (0.6) | | | | | | 28.0 | | | | | | 28.0 | | |
Preferred stock
|
| | | | 38.9 | | | | | | 1.4 | | | | | | (1.0) | | | | | | 39.3 | | | | | | 39.3 | | |
Total funds withheld receivables with FGL
|
| | | | 1,082.4 | | | | | | 7.3 | | | | | | (76.1) | | | | | | 1,013.6 | | | | | | 1,013.6 | | |
Funds withheld receivables with third parties | | | | | | | |||||||||||||||||||||||||
Corporates
|
| | | | 420.8 | | | | | | 3.7 | | | | | | (18.5) | | | | | | 406.0 | | | | | | 406.0 | | |
Asset/Mortgage-backed securities
|
| | | | 125.4 | | | | | | 1.3 | | | | | | (1.0) | | | | | | 125.7 | | | | | | 125.7 | | |
Municipals
|
| | | | 72.9 | | | | | | 0.8 | | | | | | (0.7) | | | | | | 73.0 | | | | | | 73.0 | | |
Government bonds
|
| | | | 8.3 | | | | | | 0.1 | | | | | | — | | | | | | 8.4 | | | | | | 8.4 | | |
Agency bonds
|
| | | | 11.5 | | | | | | — | | | | | | (0.1) | | | | | | 11.4 | | | | | | 11.4 | | |
Total funds withheld receivables with third parties
|
| | | | 638.9 | | | | | | 5.9 | | | | | | (20.3) | | | | | | 624.5 | | | | | | 624.5 | | |
Total fixed maturity and equity securities included in funds withheld receivables
|
| | | | 1,721.3 | | | | | | 13.2 | | | | | | (96.4) | | | | | | 1,638.1 | | | | | | 1,638.1 | | |
Call option receivable from FGL included in funds withheld receivables
|
| | | | 12.3 | | | | | | — | | | | | | (6.9) | | | | | | 5.4 | | | | | | 5.4 | | |
Accrued interest
|
| | | | 20.5 | | | | | | — | | | | | | — | | | | | | 20.5 | | | | | | 20.5 | | |
Net receivables
|
| | | | 41.1 | | | | | | — | | | | | | — | | | | | | 41.1 | | | | | | 41.1 | | |
Policy loans and other
|
| | | | 5.0 | | | | | | — | | | | | | — | | | | | | 5.0 | | | | | | 5.0 | | |
Total funds withheld receivables
|
| | | $ | 1,800.2 | | | | | $ | 13.2 | | | | | $ | (103.3) | | | | | $ | 1,710.1 | | | | | $ | 1,710.1 | | |
|
| | |
September 30, 2016
|
| |||||||||
| | |
Amortized Cost
|
| |
Fair Value
|
| ||||||
Corporate, Non-structured Hybrids, Municipal and Preferred stock: | | | | ||||||||||
Due in one year or less
|
| | | $ | 12.8 | | | | | $ | 11.9 | | |
Due after one year through five years
|
| | | | 231.4 | | | | | | 228.2 | | |
Due after five years through ten years
|
| | | | 420.8 | | | | | | 429.3 | | |
Due after ten years
|
| | | | 487.1 | | | | | | 493.3 | | |
Subtotal
|
| | | | 1,152.1 | | | | | | 1,162.7 | | |
Other securities which provide for periodic payments: | | | | ||||||||||
Asset/Mortgage-backed securities
|
| | | | 357.5 | | | | | | 350.4 | | |
Structured hybrids
|
| | | | 22.2 | | | | | | 22.0 | | |
Total fixed maturity and equity securities included in funds withheld receivables
|
| | | $ | 1,531.8 | | | | | $ | 1,535.1 | | |
|
| | |
Fiscal
|
| |||||||||||||||
| | |
2016
|
| |
2015
|
| |
2014
|
| |||||||||
Realized losses on available-for-sale securities not included
in funds withheld receivables |
| | | $ | (0.5) | | | | | $ | (2.2) | | | | | $ | — | | |
Realized (losses) gains on equity securities not included in funds withheld receivables
|
| | | | — | | | | | | (4.7) | | | | | | 15.4 | | |
Realized and unrealized (losses) gains on related party investments and other invested assets not included in funds withheld receivables
|
| | | | (5.6) | | | | | | (49.8) | | | | | | 2.8 | | |
Realized and unrealized gains (losses) on derivative instruments not included in funds withheld receivables
|
| | | | 3.8 | | | | | | (7.6) | | | | | | 25.7 | | |
Realized and unrealized gains (losses) on funds withheld receivables
|
| | | | 150.3 | | | | | | (43.4) | | | | | | 91.1 | | |
Net investment gains (losses)
|
| | | $ | 148.0 | | | | | $ | (107.7) | | | | | $ | 135.0 | | |
|
| | |
September 30,
|
| |||||||||
| | |
2016
|
| |
2015
|
| ||||||
Other invested assets
|
| | | $ | 8.4 | | | | | $ | 7.2 | | |
Derivatives
|
| | | | 5.9 | | | | | | 1.0 | | |
Asset-based loans
|
| | | | 1.7 | | | | | | 4.5 | | |
Corporate fixed-maturity securities, available-for-sale
|
| | | | — | | | | | | 14.1 | | |
Other assets
|
| | | | 3.0 | | | | | | 7.5 | | |
Total other assets
|
| | | $ | 19.0 | | | | | $ | 34.3 | | |
|
| | |
September 30, 2015
|
| |||||||||||||||||||||||||||
| | |
Cost or
Amortized Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized Losses |
| |
Fair Value
|
| |
Carrying
Value |
| |||||||||||||||
Corporate fixed-maturity securities,
available-for-sale |
| | | $ | 14.1 | | | | | $ | — | | | | | $ | — | | | | | $ | 14.1 | | | | | $ | 14.1 | | |
Total
|
| | | $ | 14.1 | | | | | $ | — | | | | | $ | — | | | | | $ | 14.1 | | | | | $ | 14.1 | | |
|
| | |
Fiscal
|
| |||||||||||||||
| | |
2016
|
| |
2015
|
| |
2014
|
| |||||||||
(Loss) income from continuing operations before income taxes: | | | | | |||||||||||||||
United States
|
| | | $ | (12.5) | | | | | $ | (68.7) | | | | | $ | 40.1 | | |
Outside the United States
|
| | | | — | | | | | | — | | | | | | — | | |
Total (loss) income before income taxes
|
| | | $ | (12.5) | | | | | $ | (68.7) | | | | | $ | 40.1 | | |
|
| | |
Fiscal
|
| |||||||||||||||
| | |
2016
|
| |
2015
|
| |
2014
|
| |||||||||
Current: | | | | | |||||||||||||||
Federal
|
| | | $ | (17.4) | | | | | $ | (16.4) | | | | | $ | 9.4 | | |
Deferred: | | | | | |||||||||||||||
Federal
|
| | | | 23.6 | | | | | | (7.6) | | | | | | 6.3 | | |
Income tax expense (benefit)
|
| | | $ | 6.2 | | | | | $ | (24.0) | | | | | $ | 15.7 | | |
|
| | |
Fiscal
|
| |||||||||||||||
| | |
2016
|
| |
2015
|
| |
2014
|
| |||||||||
Expected income tax (benefit) expense at Federal statutory rate
|
| | | $ | (4.4) | | | | | $ | (24.0) | | | | | $ | 14.0 | | |
Valuation allowance for deferred tax assets
|
| | | | 12.0 | | | | | | — | | | | | | — | | |
State and local income taxes, net of federal income tax benefit
|
| | | | (1.7) | | | | | | — | | | | | | 1.7 | | |
Other
|
| | | | 0.3 | | | | | | — | | | | | | — | | |
Reported income tax expense (benefit)
|
| | | $ | 6.2 | | | | | $ | (24.0) | | | | | $ | 15.7 | | |
Effective tax rate
|
| | | | (49.6)% | | | | | | 34.9% | | | | | | 39.2% | | |
| | |
September 30,
|
| ||||||||||||
| | |
2016
|
| |
2015
|
| | ||||||||
Deferred tax assets: | | | | | ||||||||||||
Net operating loss carryforwards
|
| | | $ | 4.4 | | | | | $ | — | | | | ||
Unrealized tax losses on securities
|
| | | | 12.2 | | | | | | 17.1 | | | | ||
Insurance receivables
|
| | | | 0.4 | | | | | | 21.2 | | | | ||
Other
|
| | | | — | | | | | | 0.2 | | | | ||
Total deferred tax assets
|
| | | | 17.0 | | | | | | 38.5 | | | | ||
Less: Valuation allowance
|
| | | | (12.0) | | | | | | — | | | | ||
Net deferred tax assets
|
| | | | 5.0 | | | | | | 38.5 | | | | ||
Deferred tax liabilities: | | | | | ||||||||||||
Insurance reserves and claim related adjustments
|
| | | | (4.9) | | | | | | (14.9) | | | | ||
Other
|
| | | | (0.1) | | | | | | — | | | | ||
Total deferred tax liabilities
|
| | | | (5.0) | | | | | | (14.9) | | | | ||
Net deferred tax asset
|
| | | $ | — | | | | | $ | 23.6 | | | | ||
|
| | |
Fiscal
|
| |||||||||||||||
| | |
2016
|
| |
2015
|
| |
2014
|
| |||||||||
Unrecognized tax benefits at beginning of year
|
| | | $ | 1.9 | | | | | $ | 1.2 | | | | | $ | — | | |
Gross increase — tax positions in prior period
|
| | | | — | | | | | | 0.7 | | | | | | 1.2 | | |
Gross decrease — tax positions in prior period
|
| | | | (1.9) | | | | | | — | | | | | | — | | |
Gross increase — tax positions in current period
|
| | | | 0.5 | | | | | | — | | | | | | — | | |
Unrecognized tax benefits at end of year
|
| | | $ | 0.5 | | | | | $ | 1.9 | | | | | $ | 1.2 | | |
|
| | |
September 30,
|
| ||||||||||||
Description
|
| |
Balance Sheet
Classification |
| |
2016
|
| |
2015
|
| ||||||
Assets: | | | | | ||||||||||||
HGI Energy Notes
|
| |
Related party investments
|
| | | $ | 91.0 | | | | | $ | 50.0 | | |
Salus Preferred Equity
|
| |
Related party investments
|
| | | | 6.7 | | | | | | 10.4 | | |
EIC Preferred Equity
|
| |
Related party investments
|
| | | | — | | | | | | 6.7 | | |
Salus CLO
|
| |
Related party investments
|
| | | | 0.7 | | | | | | 8.3 | | |
Funds withheld receivables with FGL
|
| |
Funds withheld receivable
|
| | | | 978.8 | | | | | | 1,058.0 | | |
Liabilities: | | | | | ||||||||||||
Insurance reserves
|
| | Insurance reserves | | | | | 1,054.1 | | | | | | 1,102.7 | | |
Accounts payable to FGL
|
| | Other liabilities | | | | | — | | | | | | 7.8 | | |
Accounts payable to HRG
|
| | Other liabilities | | | | | 0.2 | | | | | | — | | |
| | |
September 30,
|
| |||||||||||||||
Statement of Comprehensive (Loss) Income Classification
|
| |
2016
|
| |
2015
|
| |
2014
|
| |||||||||
Net investment income
|
| | | $ | 2.4 | | | | | $ | 6.1 | | | | | $ | 7.4 | | |
Net investment gains (losses)
|
| | | | 101.1 | | | | | | (57.2) | | | | | | 123.5 | | |
Benefits and other changes in policy reserves
|
| | | | 96.5 | | | | | | (70.1) | | | | | | 86.0 | | |
Acquisition and operating expenses
|
| | | | 0.6 | | | | | | — | | | | | | — | | |
| | |
Amortized
cost |
| |
Fair value
|
| |
Amount at which
shown in the balance sheet |
| |||||||||
Fixed maturities: | | | | | |||||||||||||||
Bonds: | | | | | |||||||||||||||
United States Government and government agencies and authorities
|
| | | $ | 72.8 | | | | | $ | 74.0 | | | | | $ | 74.0 | | |
States, municipalities and political subdivisions
|
| | | | 61.6 | | | | | | 66.4 | | | | | | 66.4 | | |
Foreign governments
|
| | | | 2.6 | | | | | | 2.8 | | | | | | 2.8 | | |
Public utilities
|
| | | | 146.8 | | | | | | 145.5 | | | | | | 145.5 | | |
All other corporate bonds
|
| | | | 881.7 | | | | | | 887.8 | | | | | | 887.8 | | |
Mortgage-backed, asset-backed and collateralized
|
| | | | 357.5 | | | | | | 350.4 | | | | | | 350.4 | | |
Total fixed maturities
|
| | | | 1,523.0 | | | | | | 1,526.9 | | | | | | 1,526.9 | | |
Equity securities: | | | | | |||||||||||||||
Nonredeemable preferred stock
|
| | | | 8.8 | | | | | | 8.2 | | | | | | 8.2 | | |
Policy loans
|
| | | | 8.5 | | | | | | 8.5 | | | | | | 8.5 | | |
Short term investments
|
| | | | 95.5 | | | | | | 95.5 | | | | | | 95.5 | | |
Derivative investments
|
| | | | 9.8 | | | | | | 11.3 | | | | | | 11.3 | | |
Total investments included in funds withheld receivables(b)
|
| | |
$
|
1,645.6
|
| | | |
$
|
1,650.4
|
| | | |
$
|
1,650.4
|
| |
|
| | |
As of or for the year ended
September 30, |
| |||||||||||||||
| | |
2016
|
| |
2015
|
| |
2014
|
| |||||||||
Life Insurance (single segment): | | | | | |||||||||||||||
Future policy benefits, losses, claims and loss expenses
|
| | | $ | 1,751.3 | | | | | $ | 1,856.0 | | | | | $ | 1,418.4 | | |
Net investment income
|
| | | | 148.0 | | | | | | (107.7) | | | | | | 135.0 | | |
Benefits, claims, losses and settlement expenses
|
| | | | 153.2 | | | | | | (43.5) | | | | | | 92.8 | | |
Other operating expenses
|
| | | | (9.7) | | | | | | (13.4) | | | | | | (11.4) | | |
Fiscal 2016
|
| |
Gross
Amount |
| |
Ceded
to other companies |
| |
Assumed from
other companies |
| |
Net
Amount |
| |
Percentage
of amount assumed to net |
| |||||||||||||||
Life insurance in force
|
| | | $ | — | | | | | $ | — | | | | | $ | 244.5 | | | | | $ | 244.5 | | | | | | 100.0% | | |
Premiums and other considerations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Traditional life insurance premiums
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 5.7 | | | | | | 100.0% | | |
Annuity product charges
|
| | | | — | | | | | | — | | | | | | 96.3 | | | | | | 96.3 | | | | | | 100.0% | | |
Total premiums and other considerations
|
| | | $ | — | | | | | $ | — | | | | | $ | 96.3 | | | | | $ | 102.0 | | | | | | 100.0% | | |
|
Fiscal 2015
|
| |
Gross
Amount |
| |
Ceded
to other companies |
| |
Assumed from
other companies |
| |
Net
Amount |
| |
Percentage
of amount assumed to net |
| |||||||||||||||
Life insurance in force
|
| | | $ | — | | | | | $ | — | | | | | $ | 255.5 | | | | | $ | 255.5 | | | | | | 100.0% | | |
Premiums and other considerations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Traditional life insurance premiums
|
| | | $ | — | | | | | $ | — | | | | | $ | 3.9 | | | | | $ | 3.9 | | | | | | 100.0% | | |
Annuity product charges
|
| | | | — | | | | | | — | | | | | | 94.2 | | | | | | 94.2 | | | | | | 100.0% | | |
Total premiums and other considerations
|
| | | $ | — | | | | | $ | — | | | | | $ | 98.1 | | | | | $ | 98.1 | | | | | | 100.0% | | |
|
Fiscal 2014
|
| |
Gross
Amount |
| |
Ceded
to other companies |
| |
Assumed from
other companies |
| |
Net
Amount |
| |
Percentage
of amount assumed to net |
| |||||||||||||||
Life insurance in force
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | | —% | | |
Premiums and other considerations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Traditional life insurance premiums
|
| | | $ | — | | | | | $ | — | | | | | $ | 0.9 | | | | | $ | 0.9 | | | | | | 100.0% | | |
Annuity product charges
|
| | | | — | | | | | | — | | | | | | 5.3 | | | | | | 5.3 | | | | | | 100.0% | | |
Total premiums and other considerations
|
| | | $ | — | | | | | $ | — | | | | | $ | 6.2 | | | | | $ | 6.2 | | | | | | 100.0% | | |
|
| | |
Page
|
| |||
Article I
|
| ||||||
DEFINITIONS AND TERMS
|
| ||||||
| | | | A-2 | | | |
| | | | A-11 | | | |
Article II
|
| ||||||
THE MERGER
|
| ||||||
| | | | A-12 | | | |
| | | | A-12 | | | |
| | | | A-12 | | | |
| | | | A-12 | | | |
| | | | A-12 | | | |
| | | | A-13 | | | |
| | | | A-13 | | | |
| | | | A-14 | | | |
| | | | A-15 | | | |
Article III
|
| ||||||
EXCHANGE OF CERTIFICATES
|
| ||||||
| | | | A-15 | | | |
| | | | A-15 | | | |
| | | | A-16 | | | |
| | | | A-16 | | | |
| | | | A-16 | | | |
| | | | A-16 | | | |
| | | | A-16 | | | |
Article IV
|
| ||||||
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
|
| ||||||
| | | | A-17 | | | |
| | | | A-17 | | | |
| | | | A-18 | | | |
| | | | A-19 | | | |
| | | | A-19 | | | |
| | | | A-19 | | | |
| | | | A-20 | | | |
| | | | A-20 | | | |
| | | | A-21 | | | |
| | | | A-21 | | | |
| | | | A-21 | | | |
| | | | A-22 | | | |
| | | | A-23 | | | |
| | | | A-23 | | | |
| | | | A-23 | | | |
| | | | A-24 | | | |
| | | | A-25 | | | |
| | | | A-25 | | |
| | |
Page
|
| |||
| | | | A-25 | | | |
| | | | A-26 | | | |
| | | | A-26 | | | |
| | | | A-26 | | | |
| | | | A-26 | | | |
| | | | A-26 | | | |
| | | | A-27 | | | |
| | | | A-27 | | | |
| | | | A-27 | | | |
| | | | A-27 | | | |
Article V
|
| ||||||
REPRESENTATIONS AND WARRANTIES OF CF CORP, PARENT AND MERGER SUB
|
| ||||||
| | | | A-27 | | | |
| | | | A-28 | | | |
| | | | A-28 | | | |
| | | | A-28 | | | |
| | | | A-29 | | | |
| | | | A-29 | | | |
| | | | A-29 | | | |
| | | | A-29 | | | |
| | | | A-30 | | | |
| | | | A-30 | | | |
| | | | A-31 | | | |
| | | | A-33 | | | |
| | | | A-33 | | | |
| | | | A-35 | | | |
| | | | A-35 | | | |
| | | | A-35 | | | |
| | | | A-35 | | | |
| | | | A-35 | | | |
| | | | A-35 | | | |
| | | | A-36 | | | |
| | | | A-36 | | | |
| | | | A-36 | | | |
Article VI
|
| ||||||
COVENANTS
|
| ||||||
| | | | A-36 | | | |
| | | | A-38 | | | |
| | | | A-39 | | | |
| | | | A-41 | | | |
| | | | A-43 | | | |
| | | | A-44 | | | |
| | | | A-46 | | | |
| | | | A-46 | | | |
| | | | A-46 | | | |
| | | | A-47 | | |
| | |
Page
|
| |||
| | | | A-54 | | | |
| | | | A-55 | | | |
| | | | A-55 | | | |
| | | | A-56 | | | |
| | | | A-57 | | | |
| | | | A-57 | | | |
| | | | A-57 | | | |
| | | | A-57 | | | |
| | | | A-58 | | | |
| | | | A-58 | | | |
Article VII
|
| ||||||
CONDITIONS PRECEDENT
|
| ||||||
| | | | A-58 | | | |
| | | | A-58 | | | |
| | | | A-59 | | | |
Article VIII
|
| ||||||
TERMINATION, AMENDMENT AND WAIVER
|
| ||||||
| | | | A-59 | | | |
| | | | A-60 | | | |
| | | | A-61 | | | |
| | | | A-61 | | | |
| | | | A-61 | | | |
| | | | A-61 | | | |
Article IX
|
| ||||||
GENERAL PROVISIONS
|
| ||||||
| | | | A-62 | | | |
| | | | A-62 | | | |
| | | | A-63 | | | |
| | | | A-63 | | | |
| | | | A-64 | | | |
| | | | A-64 | | | |
| | | | A-64 | | | |
| | | | A-65 | | | |
| | | | A-65 | | | |
| | | | A-66 | | | |
| | | | A-66 | | | |
| | | | A-66 | | | |
| | | | A-67 | | | |
EXHIBITS
|
| ||||||
Exhibit A
Surviving Corporation Certificate of Incorporation
|
| | |||||
Exhibit B
Surviving Corporation By-laws
|
| | |||||
Exhibit C
Stockholder Written Consent
|
| | |||||
SCHEDULES
|
| ||||||
Schedule 7.01(d)
Governmental Consents
|
| |
| if to CF Corp, to: | | ||||||
| | | | CF Corporation 1701 Village Center Circle Las Vegas, Nevada 89134 |
| |||
| | | | Facsimile: | | | 212-588-8713 | |
| | | | Email: | | | newton@cc.capital | |
| | | | Attention: | | | Douglas Newton | |
| with a copy to (which shall not constitute notice): | | ||||||
| | | | Debevoise & Plimpton LLP 919 Third Avenue New York, New York 10022 |
| |||
| | | | Facsimile: | | | 212-909-6836 | |
| | | | Email: | | | nfpotter@debevoise.com | |
| | | | Attention: | | | Nicholas F. Potter, Esq. | |
| | | | Winston & Strawn LLP 200 Park Avenue New York, New York 10166 |
| |||
| | | | Facsimile: | | | 212-294-4700 | |
| | | | Email: | | | jrubinstein@winston.com | |
| | | | Attention: | | | Joel L. Rubinstein, Esq. | |
| if to Parent or Merger Sub, to: | | ||||||
| | | | c/o CF Corporation 1701 Village Center Circle Las Vegas, Nevada 89134 |
| |||
| | | | Facsimile: | | | 212-588-8713 | |
| | | | Email: | | | newton@cc.capital | |
| | | | Attention: | | | Douglas Newton | |
| with a copy to (which shall not constitute notice): | | ||||||
| | | | Debevoise & Plimpton LLP 919 Third Avenue New York, New York 10022 |
| |||
| | | | Facsimile: | | | 212-909-6836 | |
| | | | Email: | | | nfpotter@debevoise.com | |
| | | | Attention: | | | Nicholas F. Potter, Esq. | |
| | | | Winston & Strawn LLP 200 Park Avenue New York, New York 10166 |
| |||
| | | | Facsimile: | | | 212-294-4700 | |
| | | | Email: | | | jrubinstein@winston.com | |
| | | | Attention: | | | Joel L. Rubinstein, Esq. | |
| if to the Company, to | | ||||||
| | | | Fidelity & Guaranty Life 601 Locust Street, 14th Floor Des Moines, IA 50309-3738 |
| |||
| | | | Email: | | | Eric.Marhoun@fglife.com | |
| | | | Attention: | | | General Counsel & Secretary | |
| with a copy to (which shall not constitute notice) : | | ||||||
| | | | Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036 |
| |||
| | | | Facsimile: | | | 212-735-2000 | |
| | | | Email: | | | Todd.Freed@skadden.com | |
| | | | Attention: | | | Todd E. Freed, Esq. | |
| | | | Skadden, Arps, Slate, Meagher & Flom LLP 1440 New York Avenue, N.W. Washington, D.C. 20005 |
| |||
| | | | Facsimile: | | | 202-393-5760 | |
| | | | Email: | | | Chris.Ulery@skadden.com | |
| | | | Attention: | | | Christopher J. Ulery, Esq. | |
| CF CORPORATION | | |||
| By: | | | /s/ Chinh Chu | |
| | | | Name: Chinh Chu | |
| | | | Title: Co-Executive Chairman | |
| FGL US Holdings Inc. | | |||
| By: | | | /s/ Menes O. Chee | |
| | | | Name: Menes O. Chee | |
| | | | Title: President and Secretary | |
| FGL Merger Sub Inc. | | |||
| By: | | | /s/ Menes O. Chee | |
| | | | Name: Menes O. Chee | |
| | | | Title: President and Secretary | |
| FIDELITY & GUARANTY LIFE | | |||
| By: | | | /s/ Christopher J. Littlefield | |
| | | | Name: Christopher J. Littlefield | |
| | | | Title: President and Chief Executive Officer | |
| CF CORPORATION | | |||
| By: | | | /s/ Chinh E. Chu | |
| | | | Name: Chinh E. Chu | |
| | | | Title: Co-Executive Chairman | |
| FGL US HOLDINGS INC. | | |||
| By: | | | /s/ Menes O. Chee | |
| | | | Name: Menes O. Chee | |
| | | | Title: President and Secretary | |
| FGL MERGER SUB INC. | | |||
| By: | | | /s/ Menes O. Chee | |
| | | | Name: Menes O. Chee | |
| | | | Title: President and Secretary | |
| FIDELITY & GUARANTY LIFE | | |||
| By: | | | /s/ Eric L. Marhoun | |
| | | | Name: Eric L. Marhoun | |
| | | | Title: Executive Vice President, General Counsel & Secretary | |
| | | | | D-1 | | | |
| | | | | D-1 | | | |
| | | | | D-4 | | | |
| | | | | D-6 | | | |
| | | | | D-6 | | | |
| | | | | D-6 | | | |
| | | | | D-8 | | | |
| | | | | D-9 | | | |
| | | | | D-9 | | | |
| | | | | D-9 | | | |
| | | | | D-10 | | | |
| | | | | D-10 | | | |
| | | | | D-11 | | | |
| | | | | D-11 | | | |
| | | | | D-12 | | | |
| | | | | D-13 | | | |
| | | | | D-13 | | | |
| | | | | D-13 | | | |
| | | | | D-13 | | | |
| | | | | D-13 | | | |
| | | | | D-13 | | | |
| | | | | D-13 | | | |
| | | | | D-14 | | | |
| | | | | D-14 | | | |
| | | | | D-14 | | | |
| | | | | D-14 | | | |
| | | | | D-15 | | | |
| | | | | D-15 | | | |
| | | | | D-15 | | | |
| | | | | D-15 | | | |
| | | | | D-15 | | |
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