Fidelity National Financial(FNF) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements of Fidelity National Financial, Inc. and its subsidiaries, including balance sheets, earnings, equity, cash flows, and detailed notes Condensed Consolidated Balance Sheets The Condensed Consolidated Balance Sheets provide a snapshot of the company's financial position as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and equity | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | Change (Millions) | |:---|:---|:---|:---| | Total Assets | $102,331 | $95,263 | +$7,068 | | Total Liabilities | $93,512 | $86,731 | +$6,781 | | Total Equity | $8,819 | $8,532 | +$287 | | Investments | $68,022 | $63,615 | +$4,407 | | Reinsurance Recoverable | $15,781 | $13,380 | +$2,401 | | Contractholder Funds | $59,813 | $56,404 | +$3,409 | | Funds Withheld for Reinsurance Liabilities | $12,469 | $10,758 | +$1,711 | Condensed Consolidated Statements of Earnings The Condensed Consolidated Statements of Earnings show a decrease in net earnings for both the three and six months ended June 30, 2025, compared to the prior year | Metric | 3 Months Ended June 30, 2025 (Millions) | 3 Months Ended June 30, 2024 (Millions) | Change (Millions) | |:---|:---|:---|:---| | Total Revenues | $3,635 | $3,158 | +$477 | | Total Expenses | $3,253 | $2,700 | +$553 | | Net Earnings | $293 | $343 | -$50 | | Net Earnings per Share (Diluted) | $1.02 | $1.12 | -$0.10 | | Metric | 6 Months Ended June 30, 2025 (Millions) | 6 Months Ended June 30, 2024 (Millions) | Change (Millions) | |:---|:---|:---|:---| | Total Revenues | $6,364 | $6,457 | -$93 | | Total Expenses | $5,871 | $5,668 | +$203 | | Net Earnings | $376 | $612 | -$236 | | Net Earnings per Share (Diluted) | $1.32 | $2.04 | -$0.72 | Condensed Consolidated Statements of Comprehensive Earnings The Condensed Consolidated Statements of Comprehensive Earnings show an increase in comprehensive earnings attributable to common shareholders for both the three and six months ended June 30, 2025, primarily due to unrealized gains on investments and other financial instruments, offsetting the decrease in net earnings | Metric | 3 Months Ended June 30, 2025 (Millions) | 3 Months Ended June 30, 2024 (Millions) | Change (Millions) | |:---|:---|:---|:---| | Net Earnings | $293 | $343 | -$50 | | Other Comprehensive Earnings (Loss) | $17 | -$58 | +$75 | | Comprehensive Earnings Attributable to FNF Common Shareholders | $295 | $248 | +$47 | | Metric | 6 Months Ended June 30, 2025 (Millions) | 6 Months Ended June 30, 2024 (Millions) | Change (Millions) | |:---|:---|:---|:---| | Net Earnings | $376 | $612 | -$236 | | Other Comprehensive Earnings (Loss) | $203 | $32 | +$171 | | Comprehensive Earnings Attributable to FNF Common Shareholders | $564 | $586 | -$22 | Condensed Consolidated Statements of Equity The Condensed Consolidated Statements of Equity detail changes in shareholders' equity for the three and six months ended June 30, 2025, and June 30, 2024, reflecting movements in retained earnings, paid-in capital, and treasury stock | Metric | June 30, 2025 (Millions) | June 30, 2024 (Millions) | Change (Millions) | |:---|:---|:---|:---| | Total FNF Shareholders' Equity | $7,906 | $7,981 | -$75 | | Additional Paid-in Capital | $6,022 | $5,942 | +$80 | | Retained Earnings | $6,071 | $5,536 | +$535 | | Accumulated Other Comprehensive Loss | $(1,849) | $(2,087) | +$238 | | Treasury Stock (Cost) | $(2,338) | $(2,131) | -$207 | - Dividends declared for common shares were $0.50 per share for the three months ended June 30, 2025, compared to $0.48 per share for the same period in 2024. For the six months ended June 30, 2025, dividends were $1.00 per share, up from $0.96 per share in 2024[18][20] Condensed Consolidated Statements of Cash Flows The Condensed Consolidated Statements of Cash Flows show a net decrease in cash and cash equivalents for the six months ended June 30, 2025, contrasting with a net increase in the prior year | Cash Flow Activity | 6 Months Ended June 30, 2025 (Millions) | 6 Months Ended June 30, 2024 (Millions) | Change (Millions) | |:---|:---|:---|:---| | Net Cash Provided by Operating Activities | $3,011 | $2,954 | +$57 | | Net Cash Used in Investing Activities | $(4,268) | $(3,021) | -$1,247 | | Net Cash Provided by Financing Activities | $1,050 | $2,190 | -$1,140 | | Net (Decrease) Increase in Cash and Cash Equivalents | $(207) | $2,123 | -$2,330 | | Cash and Cash Equivalents at End of Period | $3,272 | $4,890 | -$1,618 | Notes to Unaudited Condensed Consolidated Financial Statements These notes provide essential context and detailed breakdowns for the unaudited condensed consolidated financial statements, covering accounting policies, recent developments, segment information, and financial instrument disclosures Note A — Basis of Financial Statements Note A outlines the basis of preparation for the financial statements, confirming adherence to GAAP and Form 10-Q instructions, and describes business segments, recent corporate developments, and accounting policy updates - FNF is a leading provider of title insurance, escrow, and other title-related services, mortgage transaction services through ServiceLink, and annuity and life insurance products via its majority-owned subsidiary F&G Annuities & Life[24] - Recent developments include F&G's public offering of 8,000,000 shares of common stock on March 24, 2025, redemption of $300 million 5.50% Senior Notes on February 1, 2025, and issuance of $375 million 7.30% Junior Subordinated Notes due 2065 on January 13, 2025[26][27][28] | Metric | 3 Months Ended June 30, 2025 (Millions) | 3 Months Ended June 30, 2024 (Millions) | 6 Months Ended June 30, 2025 (Millions) | 6 Months Ended June 30, 2024 (Millions) | |:---|:---|:---|:---|:---| | Income Tax Expense | $98 | $116 | $127 | $179 | | Income Tax Expense as % of Earnings Before Taxes | 26% | 25% | 26% | 23% | - The company updated its significant accounting policies for Derivative Financial Instruments and Funds Withheld Arrangements, primarily due to executing certain derivative transactions and changes in how embedded derivatives in funds withheld arrangements are reported[35][47][48] Note B — Summary of Reserve for Title Claim Losses Note B summarizes the reserve for title claim losses, detailing changes in the reserve balance, provision for current year claims, and ongoing legal proceedings related to past claims | Metric | 6 Months Ended June 30, 2025 (Millions) | 6 Months Ended June 30, 2024 (Millions) | |:---|:---|:---|\n| Beginning Balance | $1,713 | $1,770 | | Total Title Claim Loss Provision | $120 | $107 | | Total Title Claims Paid, Net of Recoupments | $(131) | $(140) | | Ending Balance | $1,695 | $1,721 | | Provision for Title Insurance Claim Losses as % of Title Insurance Premiums | 4.5% | 4.5% | - The Ninth Circuit affirmed the district court's Settlement and Bar Orders on February 20, 2025, barring further claims against Chicago Title Company related to the Gina Champion-Cain alcoholic beverage license scheme. Appellants' petition for rehearing was denied, and petitions for writ of certiorari to the U.S. Supreme Court are pending[51][52] - Management believes the recorded reserves for title claim losses are adequate to cover losses related to the Champion-Cain matter and other claims, despite the inherent uncertainty in estimating future payments[54][56] Note C — Fair Value of Financial Instruments Note C details the company's fair value measurements for financial instruments, categorizing them into a three-level hierarchy and NAV based on input observability, and provides valuation methodologies and changes in Level 3 instruments - The company categorizes financial instruments into a three-level fair value hierarchy (Level 1, 2, 3) and Net Asset Value (NAV) based on the observability of inputs used in valuation techniques[57][58][59][60] | Category | June 30, 2025 (Millions) | December 31, 2024 (Millions) | |:---|:---|:---| | Total Financial Assets at Fair Value | $59,311 | $57,195 | | Total Financial Liabilities at Fair Value | $6,494 | $5,745 | - Valuation methodologies for various instruments, including fixed maturity securities, derivatives, and investments in unconsolidated affiliates, rely on market approaches, discounted cash flow models, and NAV as a practical expedient, incorporating both observable and unobservable inputs[67][70][73][78][80] | Level 3 Assets (Fair Value) | June 30, 2025 (Millions) | December 31, 2024 (Millions) | |:---|:---|:---| | Fixed Maturity Securities | $12,991 | $11,734 | | Equity Securities | $15 | $10 | | Investment in Unconsolidated Affiliates | $272 | $272 | | Market Risk Benefits Asset | $213 | $189 | | Total Level 3 Assets | $13,272 | $11,734 | | Level 3 Liabilities (Fair Value) | June 30, 2025 (Millions) | December 31, 2024 (Millions) | |:---|:---|:---| | Indexed Annuities/IUL Embedded Derivatives | $5,727 | $5,220 | | Market Risk Benefits Liability | $711 | $549 | | Total Level 3 Liabilities | $6,510 | $5,843 | Note D — Investments Note D provides a comprehensive overview of the company's investment portfolio, including fixed maturity securities, equity securities, and mortgage loans, detailing fair value, credit loss allowances, and interest and investment income | Investment Category | June 30, 2025 (Millions) | December 31, 2024 (Millions) | |:---|:---|:---| | Total Available-for-Sale Securities (Fair Value) | $52,047 | $48,218 | | Total Investments (Fair Value) | $68,022 | $63,615 | | Allowance for Expected Credit Losses (AFS Securities) | $103 | $67 | - The allowance for expected credit losses on AFS securities increased from $67 million to $103 million, reflecting the company's assessment of credit-related declines in fair value[117] | Mortgage Loan Type | June 30, 2025 (Millions) | December 31, 2024 (Millions) | |:---|:---|:---| | Commercial Mortgage Loans (Net) | $3,068 | $2,705 | | Residential Mortgage Loans (Net) | $3,872 | $3,221 | | Total Mortgage Loans (Net) | $6,940 | $5,926 | - As of June 30, 2025, the company had $76 million in mortgage loans (commercial and residential) that were over 90 days past due or in non-accrual status, down from $94 million at December 31, 2024[129][130] | Income Source | 3 Months Ended June 30, 2025 (Millions) | 3 Months Ended June 30, 2024 (Millions) | 6 Months Ended June 30, 2025 (Millions) | 6 Months Ended June 30, 2024 (Millions) | |:---|:---|:---|:---|:---| | Gross Investment Income | $843 | $855 | $1,668 | $1,636 | | Investment Expense | $(66) | $(72) | $(131) | $(143) | | Interest and Investment Income | $777 | $783 | $1,537 | $1,493 | | Recognized Gains/Losses Component | 3 Months Ended June 30, 2025 (Millions) | 3 Months Ended June 30, 2024 (Millions) | 6 Months Ended June 30, 2025 (Millions) | 6 Months Ended June 30, 2024 (Millions) | |:---|:---|:---|:---|:---| | Net Realized/Unrealized Gains (Losses) on Derivatives and Embedded Derivatives | $83 | $(27) | $(141) | $141 | | Change in Allowance for Expected Credit Losses | $(21) | $(31) | $(44) | $(31) | | Total Recognized Gains and Losses, Net | $98 | $(88) | $(189) | $187 | | Unconsolidated VIEs | June 30, 2025 (Millions) | December 31, 2024 (Millions) | |:---|:---|:---| | Carrying Value | $30,761 | $26,807 | | Maximum Loss Exposure | $32,913 | $28,945 | Note E — Derivative Financial Instruments Note E details the company's use of derivative financial instruments for hedging market risks, including interest rate swaps, foreign currency swaps, equity options, and futures contracts, along with credit risk management and collateral agreements | Derivative Type | June 30, 2025 Notional (Millions) | June 30, 2025 Assets (Millions) | June 30, 2025 Liabilities (Millions) | |:---|:---|:---|:---| | Total Derivatives Designated as Hedging Instruments | $371 | $12 | $3 | | Total Derivatives Not Designated as Hedging Instruments | $38,493 | $961 | $5,714 | | Total Derivatives | $38,864 | $973 | $5,717 | - The company uses interest rate swaps and foreign currency swaps for fair value hedges and equity options/futures for economic hedges of product-related equity market risk, particularly for indexed annuities and IUL contracts[152][153][154][156][158] | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | |:---|:---|:---| | Fair Value Collateral | $924 | $782 | | Collateral Held | $856 | $771 | | Net Credit Risk | $68 | $34 | - Credit risk on derivatives is managed by transacting with creditworthy counterparties, obtaining collateral, and establishing exposure limits. Collateral agreements require posting collateral when net exposures exceed pre-determined thresholds, with most thresholds set to zero[162][163] Note F — Commitments and Contingencies Note F outlines the company's legal and regulatory contingencies, including ongoing class action lawsuits and stockholder derivative lawsuits, and details unfunded investment commitments in the F&G segment - The company is a defendant in class action lawsuits related to the MOVEit file transfer software vulnerability and the LoanCare Data Security Breach. A class-wide settlement for the LoanCare case received preliminary approval on March 24, 2025[168][169][170] - A stockholder derivative lawsuit alleging breach of fiduciary duties related to F&G's preferred stock investment and director compensation was dismissed with prejudice on May 9, 2025[171][172][174] | Commitment Type | June 30, 2025 (Millions) | |:---|:---| | Unconsolidated VIEs: Limited partnerships | $1,226 | | Direct Lending | $949 | | Fixed Maturity Securities, ABS | $355 | | Other Fixed Maturity Securities, AFS | $155 | | Commercial Mortgage Loans | $68 | | Residential Mortgage Loans | $273 | | Other Assets | $183 | | Total Unfunded Commitments | $3,483 | Note G — Dividends Note G reports the declaration of a cash dividend of $0.50 per share, payable on September 30, 2025, to FNF common shareholders of record as of September 16, 2025 - On August 6, 2025, the Board of Directors declared a cash dividend of $0.50 per share, payable on September 30, 2025, to FNF common shareholders of record as of September 16, 2025[177] Note H — Segment Information Note H provides summarized financial information for the company's reportable segments: Title, F&G, and Corporate and Other, detailing revenues, significant expenses, net earnings, and asset allocation | Segment | 3 Months Ended June 30, 2025 (Millions) | 3 Months Ended June 30, 2024 (Millions) | |:---|:---|:---| | Total Segment Revenues: | | | | Title | $2,213 | $1,931 | | F&G | $1,364 | $1,172 | | Corporate and Other | $86 | $82 | | Net Earnings (Loss) from Continuing Operations: | | | | Title | $283 | $164 | | F&G | $42 | $204 | | Corporate and Other | $(4) | $2 | | Segment | 6 Months Ended June 30, 2025 (Millions) | 6 Months Ended June 30, 2024 (Millions) | |:---|:---|:---| | Total Segment Revenues: | | | | Title | $3,987 | $3,594 | | F&G | $2,272 | $2,741 | | Corporate and Other | $161 | $176 | | Net Earnings (Loss) from Continuing Operations: | | | | Title | $413 | $338 | | F&G | $21 | $320 | | Corporate and Other | $(2) | $8 | - The Title segment's net earnings increased significantly in both periods, while the F&G segment experienced a substantial decrease in net earnings, particularly for the six-month period[179][180][182][183] | Segment | June 30, 2025 Assets (Millions) | June 30, 2024 Assets (Millions) | |:---|:---|:---| | Title | $8,022 | $8,019 | | F&G | $91,819 | $78,493 | | Corporate and Other | $2,490 | $2,312 | | Total Assets | $102,331 | $88,824 | Note I — Supplemental Cash Flow Information Note I provides supplemental cash flow details, including cash payments for interest, income taxes, and deferred sales inducements, as well as non-cash investing and financing activities | Cash Paid For (6 Months Ended June 30) | 2025 (Millions) | 2024 (Millions) | |:---|:---|:---| | Interest | $113 | $96 | | Income Taxes | $155 | $66 | | Deferred Sales Inducements | $158 | $120 | | Non-Cash Activities (6 Months Ended June 30) | 2025 (Millions) | 2024 (Millions) | |:---|:---|:---| | Investments Transferred Subject to Reinsurance Agreement | $(500) | — | | Liabilities Assumed in Acquisitions | $2 | $190 | Note J — Revenue Recognition Note J disaggregates the company's revenue by stream and segment, explaining recognition policies for various services, and provides details on contract balances, including trade receivables and unearned revenue liabilities | Revenue Stream (6 Months Ended June 30) | 2025 (Millions) | 2024 (Millions) | |:---|:---|:---| | Total Revenue from Insurance Contracts | $3,875 | $3,699 | | Total Revenue from Contracts with Customers | $1,002 | $925 | | Total Other Revenue | $1,370 | $1,706 | | Total Revenues | $6,364 | $6,457 | - Direct title insurance premiums and agency title insurance premiums are recognized at the time of closing the underlying transaction. Life insurance premiums are recognized when due from the policyholder[187][191] | Contract Balance | June 30, 2025 (Millions) | December 31, 2024 (Millions) | |:---|:---|:---| | Trade Receivables | $378 | $362 | | Deferred Revenue (Contract Liabilities) | $94 | $92 | | Unearned Revenue Liabilities (URL) | $474 | $401 | - For the six months ended June 30, 2025, $62 million of revenue included in deferred revenue at the beginning of the period was recognized. URL for universal life products increased from $401 million to $474 million[198][199] Note K — Value of Business Acquired ("VOBA"), Deferred Acquisition Costs ("DAC") and Deferred Sales Inducements ("DSI") Note K details the components of 'Other intangible assets, net,' including VOBA, DAC, and DSI, providing roll-forward tables, amortization expenses, and assumption updates | Intangible Asset | June 30, 2025 (Millions) | December 31, 2024 (Millions) | |:---|:---|:---| | Value of Business Acquired (VOBA) | $1,272 | $1,349 | | Deferred Acquisition Costs (DAC) | $3,359 | $3,036 | | Deferred Sales Inducements (DSI) | $753 | $625 | | Total Other Intangible Assets, Net | $6,326 | $5,976 | | Amortization Expense (6 Months Ended June 30) | 2025 (Millions) | 2024 (Millions) | |:---|:---|:---| | VOBA Amortization | $77 | $95 | | DAC Amortization | $167 | $125 | | DSI Amortization | $30 | $16 | - F&G annually reviews cash flow assumptions for VOBA, DAC, and DSI. In 2025, the option budget assumption was updated. In 2024, several assumptions including surrender rates, GMWB election timing, premium persistency, mortality improvement, and option budgets were updated[207][208] Note L — F&G Reinsurance Note L details F&G's reinsurance activities, including effects on net premiums and benefits, changes to third-party reinsurance agreements, and composition of reinsurance recoverable, addressing credit losses and concentration risk | Reinsurance Effect (6 Months Ended June 30) | 2025 (Millions) | 2024 (Millions) | |:---|:---|:---| | Direct Net Premiums Earned | $805 | $977 | | Ceded Net Premiums Earned | $(43) | $(48) | | Net Premiums Earned | $762 | $929 | | Direct Net Benefits Incurred | $1,634 | $1,872 | | Ceded Net Benefits Incurred | $(117) | $(103) | | Net Benefits Incurred | $1,517 | $1,769 | - F&G amended its flow reinsurance agreement with Everlake effective January 1, 2025, to cede future MYGA business and an inforce block of MYGA policies. A strategic partnership with a new reinsurance vehicle backed by Blackstone managed funds was launched on August 6, 2025, for a forward flow reinsurance agreement on certain fixed indexed annuity products[212][213][214] | Principal Reinsurer | June 30, 2025 Recoverable (Millions) | December 31, 2024 Recoverable (Millions) | |:---|:---|:---| | Aspida Life Re Ltd. | $8,379 | $7,844 | | Somerset Reinsurance Ltd. | $4,028 | $2,822 | | Everlake | $1,844 | $1,168 | | Wilton Reassurance Company | $1,049 | $1,066 | | Total Reinsurance Recoverable, Gross | $15,795 | $13,389 | | Allowance for Expected Credit Losses | $(18) | $(20) | | Net Reinsurance Recoverable | $15,777 | $13,369 | - F&G has significant concentration of reinsurance risk with Aspida Re, Somerset, Everlake, and Wilton Re, mitigated by monitoring financial condition and collateral arrangements. No material change in expected credit loss reserve for reinsurance recoverables[219][220] Note M — F&G Insurance Subsidiary Financial Information and Regulatory Matters Note M provides statutory financial information for F&G's U.S. and non-U.S. insurance subsidiaries, highlighting differences between SAP and GAAP, and detailing statutory net income, capital and surplus, and accounting practices | U.S. Subsidiary (6 Months Ended June 30) | 2025 Statutory Net Income (Loss) (Millions) | 2024 Statutory Net Income (Loss) (Millions) | |:---|:---|:---| | FGL Insurance (IA) | $(203) | $77 | | FGL NY Insurance (NY) | $6 | $6 | | Raven Re (VT) | $20 | $28 | | Corbeau Re (VT) | $(98) | $(399) | | U.S. Subsidiary (Statutory Capital and Surplus) | June 30, 2025 (Millions) | December 31, 2024 (Millions) | |:---|:---|:---| | FGL Insurance (IA) | $1,313 | $1,654 | | FGL NY Insurance (NY) | $100 | $97 | | Raven Re (VT) | $163 | $168 | | Corbeau Re (VT) | $204 | $178 | - FGL Insurance applies Iowa-prescribed accounting practices for indexed annuities and IUL products, accounting for equity option derivatives at amortized cost and indexed annuity reserves based on Standard Valuation Law. Permitted practices for FGL Insurance, Raven Re, and Corbeau Re resulted in increases to statutory capital and surplus of $252 million and $454 million at June 30, 2025 and December 31, 2024, respectively[224][225][226] | Non-U.S. Subsidiary (6 Months Ended June 30) | 2025 Net Income (Loss) (Millions) | 2024 Net Income (Loss) (Millions) | |:---|:---|:---| | F&G Cayman Re (Cayman Islands) | $19 | $(16) | | F&G Life Re (Bermuda) | $49 | $79 | - F&G Cayman Re has permitted practices approved by CIMA to include LOCs as an admitted asset and use best estimate reserve calculations for PRT reinsurance transactions. Without these, statutory surplus would be negative[228] Note N — Notes Payable Note N details the company's notes payable, including various senior and junior notes issued by FNF and F&G, their interest rates, maturity dates, and redemption terms, covering revolving credit facilities and recent debt activities | Note Type | June 30, 2025 (Millions) | December 31, 2024 (Millions) | |:---|:---|:---| | 4.50% Notes, net of discount | $447 | $447 | | 3.40% Notes, net of discount | $646 | $646 | | 2.45% Notes, net of discount | $596 | $595 | | 3.20% Notes, net of discount | $444 | $444 | | 6.50% F&G Notes, net of discount | $545 | $545 | | 7.40% F&G Notes, net of discount | $497 | $497 | | 5.50% F&G Notes, net of discount | — | $301 | | 7.95% F&G Notes, net of discount | $336 | $336 | | 6.25% F&G Notes, net of discount | $493 | $492 | | 7.30% F&G Notes, net of discount | $364 | — | | Total Notes Payable | $4,397 | $4,321 | - On January 13, 2025, F&G completed a public offering of $375 million aggregate principal amount of its 7.30% Junior Subordinated Notes due 2065. On February 1, 2025, F&G redeemed the outstanding $300 million aggregate principal amount of its 5.50% Senior Notes due May 1, 2025[233][246] - The company has an Amended Revolving Credit Facility of $800 million with $800 million available borrowing capacity as of June 30, 2025, and F&G has a $750 million F&G Credit Facility with $750 million remaining borrowing availability[240][242] | Gross Principal Maturities of Notes Payable | Amount (Millions) | |:---|:---| | 2025 (remaining) | $— | | 2026 | $32 | | 2027 | $— | | 2028 | $950 | | 2029 | $550 | | Thereafter | $2,920 | | Total | $4,452 | Note O — Market Risk Benefits Note O presents the balances and changes in Market Risk Benefits (MRBs) associated with indexed and fixed rate annuities, reconciling MRBs in asset and liability positions and discussing primary drivers of changes | Metric (Indexed Annuities) | June 30, 2025 (Millions) | December 31, 2024 (Millions) | |:---|:---|:---| | Balance, Beginning of Period, Net Liability | $420 | $314 | | Balance, End of Period, Net Liability | $608 | $420 | | Net Amount at Risk | $1,608 | $1,327 | | MRB Position | June 30, 2025 (Millions) | December 31, 2024 (Millions) | |:---|:---|:---| | Total MRB Asset | $213 | $189 | | Total MRB Liability | $711 | $549 | - The net MRB liability increased for the six months ended June 30, 2025, due to attributed fees, interest accrual, and MRB reserves for new contracts. Changes in risk-free rates had a favorable impact, while decreases in equity market projections led to an unfavorable change in MRBs[250][251] - Annual reviews of cash flow assumptions for MRBs, typically in the third quarter, led to updates in 2024 for surrender rates, rider benefit election utilization, mortality improvement, and option budgets, increasing the net MRB liability[254] Note P — Contractholder Funds Note P summarizes the balances and changes in contractholder funds' account balances for various products, including indexed annuities, fixed rate annuities, universal life, FABN, and FHLB, detailing issuances, withdrawals, and interest credited | Product (June 30, 2025) | Balance, End of Period (Millions) | Net Liability, After Reinsurance (Millions) | |:---|:---|:---| | Indexed Annuities | $31,622 | $30,168 | | Fixed Rate Annuities | $19,270 | $6,660 | | Universal Life | $3,044 | $2,254 | | FABN | $2,822 | $2,835 | | FHLB | $2,449 | $2,449 | | Total Gross Liability | $59,813 | $59,813 | | Product (December 31, 2024) | Balance, End of Period (Millions) | Net Liability, After Reinsurance (Millions) | |:---|:---|:---| | Indexed Annuities | $30,235 | $29,593 | | Fixed Rate Annuities | $17,442 | $6,433 | | Universal Life | $2,817 | $2,019 | | FABN | $2,463 | $2,463 | | FHLB | $2,852 | $2,852 | | Total Gross Liability | $56,404 | $56,404 | - For the six months ended June 30, 2025, updates to the option budget assumption decreased Contractholder funds by approximately $26 million. For the year ended December 31, 2024, updates to surrender assumptions and indexed annuities assumptions decreased Contractholder funds by approximately $89 million[262][263] | Product (June 30, 2025) | Weighted-Average Crediting Rate | |:---|:---| | Indexed Annuities | 2.30% | | Fixed Rate Annuities | 4.57% | | Universal Life | 5.94% | Note Q — Future Policy Benefits Note Q details the balances and changes in Future Policy Benefits (FPB) for traditional life, immediate annuities, and Pension Risk Transfer (PRT) contracts, providing information on expected net premiums, DPL, and key assumption inputs | Product (Net Liability) | June 30, 2025 (Millions) | December 31, 2024 (Millions) | |:---|:---|:---| | Traditional Life | $1,303 | $1,302 | | Immediate Annuities | $1,289 | $1,297 | | PRT | $6,772 | $6,054 | | Immediate Annuities DPL | $92 | $90 | | PRT DPL | $7 | $6 | | Total FPB | $9,463 | $8,749 | - For traditional life, immediate annuities, and PRT, market data updates in 2025 resulted in decreased discount rates, driving an increase to the FPB. In 2024, increased discount rates led to a decrease in FPB[272][273][275] | Product (6 Months Ended June 30) | 2025 Gross Premiums (Millions) | 2024 Gross Premiums (Millions) | |:---|:---|:---| | Traditional Life | $50 | $57 | | Immediate Annuities | $12 | $12 | | PRT | $743 | $908 | | Total | $805 | $977 | - F&G conducts annual premium deficiency testing for long-duration contracts and VOBA. In 2024, the traditional life block of business failed premium deficiency testing for VOBA recoverability, leading to an increased amortization liability[276] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations, covering business overview, key trends, critical accounting policies, detailed financial analysis, and liquidity and capital resources Overview The overview section briefly describes the company's business and recent developments, including the redomestication from Delaware to Nevada on June 11, 2025, which did not alter its core operations - On June 11, 2025, the company redomesticated from Delaware to Nevada. This change did not impact the business, physical location, management, assets, liabilities, or net worth of the company[280] Business Trends and Conditions This section discusses key external factors and market conditions influencing the Title and F&G segments, including real estate activity, interest rates, market volatility, and demographic trends Title Segment The Title segment's revenue is closely tied to real estate activity, with the MBA forecasting increased U.S. mortgage originations for 2025-2027, and median existing-home prices reaching a record $435,300 | U.S. Residential Mortgage Originations Forecast (Trillions) | 2027 | 2026 | 2025 | 2024 | |:---|:---|:---|:---|:---| | Purchase Originations | $1.5 | $1.4 | $1.3 | $1.3 | | Refinance Originations | $0.8 | $0.8 | $0.7 | $0.5 | | Total U.S. Mortgage Originations | $2.3 | $2.2 | $2.0 | $1.8 | - Average interest rates for a 30-year fixed rate mortgage were 6.8% for the three and six months ended June 30, 2025, compared to 7.0% and 6.9% for the corresponding periods in 2024[284] - Median existing-home sales prices increased to a record $435,300, approximately 2% higher than the corresponding period in 2024, while existing-home sales remained unchanged[285] - Commercial volumes and commercial fee-per-file increased in the three and six months ended June 30, 2025, compared to the corresponding periods in 2024[287] F&G Segment The F&G segment is influenced by market conditions, interest rates, and the aging U.S. population, with significant growth observed in the fixed index annuity and IUL markets - As of June 30, 2025, F&G's reserves, net of reinsurance, were $6.7 billion, with a weighted average crediting rate on fixed rate annuities of 4.57%[293] - The fixed index annuity market grew to $130 billion in sales in 2024, and the registered index-linked annuities (RILA) market reached $62 billion in sales in 2024. The IUL market expanded to $2 billion in annual sales in 2024[296] Critical Accounting Policies and Estimates There were no changes to the company's critical accounting policies during the six months ended June 30, 2025, with management continuing to make estimates and assumptions affecting reported financial amounts - There were no changes to the company's critical accounting policies during the six months ended June 30, 2025[298] Results of Operations This section provides a detailed analysis of the company's financial performance, covering consolidated results and segment-specific performance for Title, F&G, and Corporate and Other, highlighting changes in revenues, expenses, and net earnings Consolidated Results of Operations Consolidated net earnings decreased for both the three and six months ended June 30, 2025, compared to the prior year, driven by increased total expenses, particularly benefits and policy reserve changes | Metric | 3 Months Ended June 30, 2025 (Millions) | 3 Months Ended June 30, 2024 (Millions) | Change (Millions) | |:---|:---|:---|:---| | Total Revenues | $3,635 | $3,158 | +$477 | | Total Expenses | $3,253 | $2,700 | +$553 | | Net Earnings | $293 | $343 | -$50 | | Income Tax Expense | $98 | $116 | -$18 | | Metric | 6 Months Ended June 30, 2025 (Millions) | 6 Months Ended June 30, 2024 (Millions) | Change (Millions) | |:---|:---|:---|:---| | Total Revenues | $6,364 | $6,457 | -$93 | | Total Expenses | $5,871 | $5,668 | +$203 | | Net Earnings | $376 | $612 | -$236 | | Income Tax Expense | $127 | $179 | -$52 | - The increase in income tax expense as a percentage of earnings before taxes for the six months ended June 30, 2025 (26%) compared to 2024 (23%) is primarily due to an increase in the valuation allowance[307] Title Segment Results The Title segment experienced revenue growth in both the three and six months ended June 30, 2025, driven by increases in direct and agency title premiums, higher average fee per file, and increased closed order volumes | Metric | 3 Months Ended June 30, 2025 (Millions) | 3 Months Ended June 30, 2024 (Millions) | Change (Millions) | |:---|:---|:---|:---| | Total Revenues | $2,213 | $1,931 | +$282 | | Total Expenses | $1,846 | $1,696 | +$150 | | Earnings Before Income Taxes | $367 | $235 | +$132 | | Total Title Premiums | $1,471 | $1,348 | +$123 | | Closed Orders (Thousands) | 246 | 229 | +17 | | Average Fee per File | $3,894 | $3,759 | +$135 | | Metric | 6 Months Ended June 30, 2025 (Millions) | 6 Months Ended June 30, 2024 (Millions) | Change (Millions) | |:---|:---|:---|:---| | Total Revenues | $3,987 | $3,594 | +$393 | | Total Expenses | $3,449 | $3,141 | +$308 | | Earnings Before Income Taxes | $538 | $453 | +$85 | | Total Title Premiums | $2,662 | $2,381 | +$281 | | Closed Orders (Thousands) | 447 | 415 | +32 | | Average Fee per File | $3,834 | $3,668 | +$166 | - Personnel costs increased by 10% for the three months and 9% for the six months ended June 30, 2025, primarily due to elevated health claims, inflationary salary increases, and increased variable costs from higher revenues[322] - The provision for title claim losses remained consistent at an average rate of 4.5% of title premiums for all periods[324] F&G Segment Results The F&G segment experienced a decrease in earnings before income taxes for both the three and six months ended June 30, 2025, primarily due to higher benefits and other changes in policy reserves and market risk benefit losses | Metric | 3 Months Ended June 30, 2025 (Millions) | 3 Months Ended June 30, 2024 (Millions) | Change (Millions) | |:---|:---|:---|:---| | Total Revenues | $1,364 | $1,172 | +$192 | | Total Benefits and Expenses | $1,307 | $918 | +$389 | | Earnings Before Income Taxes | $57 | $254 | -$197 | | Life Insurance Premiums and Other Fees | $608 | $487 | +$121 | | Interest and Investment Income | $682 | $684 | -$2 | | Recognized Gains and (Losses), Net | $51 | $(17) | +$68 | | Benefits and Other Changes in Policy Reserves | $993 | $608 | +$385 | | Market Risk Benefit (Gains) Losses | $(4) | $20 | -$24 | | Metric | 6 Months Ended June 30, 2025 (Millions) | 6 Months Ended June 30, 2024 (Millions) | Change (Millions) | |:---|:---|:---|:---| | Total Revenues | $2,272 | $2,741 | -$469 | | Total Benefits and Expenses | $2,241 | $2,345 | -$104 | | Earnings Before Income Taxes | $31 | $396 | -$365 | | Life Insurance Premiums and Other Fees | $1,097 | $1,205 | -$108 | | Interest and Investment Income | $1,348 | $1,300 | +$48 | | Recognized Gains and (Losses), Net | $(212) | $195 | -$407 | | Benefits and Other Changes in Policy Reserves | $1,517 | $1,769 | -$252 | | Market Risk Benefit (Gains) Losses | $105 | $9 | +$96 | - The decrease in earnings for the six-month period was significantly impacted by a $407 million negative swing in Recognized gains and (losses), net, and a $96 million increase in Market risk benefit losses[332] | Investment Portfolio (Fair Value) | June 30, 2025 (Millions) | December 31, 2024 (Millions) | |:---|:---|:---| | Total Fixed Maturity Available for Sale Securities | $50,193 | $46,317 | | Limited Partnerships | $4,027 | $3,288 | | Commercial Mortgage Loans | $2,827 | $2,404 | | Residential Mortgage Loans | $3,632 | $2,916 | | Total Investments | $64,108 | $59,503 | | Credit Quality (Fair Value) | June 30, 2025 (Millions) | June 30, 2025 Percent | December 31, 2024 (Millions) | December 31, 2024 Percent | |:---|:---|:---|:---|:---| | AAA/AA/A (NAIC 1) | $32,035 | 64% | $29,174 | 63% | | BBB (NAIC 2) | $15,998 | 32% | $15,082 | 33% | | Total | $50,193 | 100% | $46,317 | 100% | - The gross unrealized loss position on the fixed maturity available-for-sale and equity portfolio was $3,465 million as of June 30, 2025, primarily due to higher treasury rates[377] Corporate and Other Segment Results The Corporate and Other segment reported a loss from continuing operations for both the three and six months ended June 30, 2025, primarily influenced by valuations of deferred compensation plan assets and intercompany dividends | Metric | 3 Months Ended June 30, 2025 (Millions) | 3 Months Ended June 30, 2024 (Millions) | Change (Millions) | |:---|:---|:---|:---| | Total Revenues | $86 | $82 | +$4 | | Total Expenses | $100 | $86 | +$14 | | Loss from Continuing Operations Before Income Taxes | $(14) | $(4) | -$10 | | Metric | 6 Months Ended June 30, 2025 (Millions) | 6 Months Ended June 30, 2024 (Millions) | Change (Millions) | |:---|:---|:---|:---| | Total Revenues | $161 | $176 | -$15 | | Total Expenses | $181 | $182 | -$1 | | Loss from Continuing Operations Before Income Taxes | $(20) | $(6) | -$14 | - The increase in three-month revenues was primarily due to a $7 million increase in valuations associated with deferred compensation plan assets. The six-month revenue decrease was due to an $11 million decrease in these valuations[391] - Personnel costs increased by $11 million for the three months ended June 30, 2025, largely due to the increased valuations of deferred compensation plan assets, which affect both revenue and personnel costs[392] Liquidity and Capital Resources This section discusses the company's cash requirements, sources of liquidity, and cash flow activities from operations, investing, and financing, highlighting dividend payments, debt management, and stock repurchases - As of June 30, 2025, the company had $3,272 million in cash and cash equivalents, $1,451 million in short-term investments, and $800 million available under its Revolving Credit Facility, plus $750 million under the Amended F&G Credit agreement[395] - The company paid cash dividends of $0.50 per share, totaling approximately $135 million, in the second quarter of 2025. The Board declared another $0.50 per share dividend payable on September 30, 2025[177][394] - Cash provided by operating activities increased by $57 million to $3,011 million for the six months ended June 30, 2025, primarily due to increased net cash inflows from net earnings and reduced outflows from changes in other assets and liabilities[402] - Cash used in investing activities increased by $1,247 million to $4,268 million for the six months ended June 30, 2025, mainly due to increased purchases of investment securities and additional investments in unconsolidated affiliates[403] - Cash provided by financing activities decreased by $1,140 million to $1,050 million for the six months ended June 30, 2025, driven by increased contractholder withdrawals, reduced contractholder deposits, and increased treasury stock purchases[405] - The company repurchased 3,270,000 shares of FNF common stock for approximately $184 million under the 2024 Repurchase Program during the six months ended June 30, 2025[407] Item 3. Quantitative and Qualitative Disclosures about Market Risk There have been no material changes in the market risks described in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes in market risks have occurred since the Annual Report on Form 10-K for the year ended December 31, 2024[411] Item 4. Controls and Procedures The company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the period - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[412] - No changes in internal control over financial reporting occurred during the three and six months ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[413] PART II. OTHER INFORMATION Item 1. Legal Proceedings This section incorporates by reference the discussion of legal proceedings from Note F Commitments and Contingencies in Part I, Item 1 of this report - Legal proceedings are discussed in Note F Commitments and Contingencies to the unaudited Condensed Consolidated Financial Statements[415] Item 1A. Risk Factors This section highlights key risk factors, including the highly regulated nature of the F&G segment, potential changes in state and NAIC regulations, and the evolving landscape of ERISA and DOL's 'fiduciary rule' - The F&G segment is highly regulated by state insurance departments, the NAIC, and federal regulators, with potential for new laws, interpretations, or disciplinary actions to materially affect the business[417][419][421] - The DOL's New Fiduciary Rule, which significantly broadens the definition of 'fiduciary' under ERISA, was stayed by district courts, and appeals are in abeyance. The final outcome could materially affect agent business practices, compensation, and liability exposure[425][426][427][428][429][430] - F&G's reinsurance subsidiaries in Bermuda and the Cayman Islands are subject to local regulations (BMA and CIMA), which may limit activities or impose additional requirements[431][432][433] Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities This section summarizes the company's repurchases of equity securities during the three months ended June 30, 2025, under its publicly announced stock repurchase program | Period | Total Number of Shares Purchased | Average Price Paid per Share | |:---|:---|:---| | 4/1/2025 - 4/30/2025 | 60,000 | $64.31 | | 5/1/2025 - 5/31/2025 | 820,000 | $54.64 | | 6/1/2025 - 06/30/2025 | 2,000,000 | $55.15 | | Total (3 Months Ended June 30, 2025) | 2,880,000 | $55.20 | - As of June 30, 2025, 21,730,000 shares remained available for purchase under the 2024 Repurchase Program, which authorizes the purchase of up to 25 million shares through July 31, 2027[435][436] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities during the reporting period - None[437] Item 4. Mine Safety Disclosures Mine safety disclosures are not applicable to the company - Not applicable[438] Item 5. Other Information No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three and six months ended June 30, 2025 - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three and six months ended June 30, 2025[439] Item 6. Exhibits This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, indentures, and certifications required by the Sarbanes-Oxley Act - Exhibits include the Plan of Conversion, Articles of Incorporation, Bylaws, Ninth Supplemental Indenture, and certifications from the Chief Executive Officer and Chief Financial Officer[440] Signatures This section contains the required signatures, certifying the due authorization and filing of the report on behalf of Fidelity National Financial, Inc - The report is signed by Anthony J. Park, Chief Financial Officer (Principal Financial and Accounting Officer), on August 7, 2025[443]