February 18, 2020 - EXHIBIT 99.2 - 8-K: Current report filing



Table of Contents
FINANCIAL RESULTS
Financial Highlights	3
Condensed Consolidated Statements of Income (GAAP view)	4
Segment Results of Operations (Management view)	5
Reconciliation of Earnings Measures	6
Retirement Services Segment Highlights	7
Condensed Consolidated Balance Sheets	8

ASSETS
Investments (GAAP view)	10
Net Invested Assets (Management view)	11
Investment Funds (GAAP view)	12
Net Alternative Investments (Management view)	13
Funds Withheld at Interest (GAAP view)	14
Net Investment Earned Rates	15
Credit Quality of Securities & Net Invested Assets	17

LIABILITIES
Net Reserve Liabilities & Rollforwards	20
Deferred Annuity Liability Characteristics	22

CAPITAL
Capitalization & Regulatory Capital Ratios	23
Financial Strength, Credit Ratings & Share Data	24

ADDITIONAL INFORMATION
Notes to the Financial Supplement	25
Non-GAAP Reconciliations	27



Financial Highlights Unaudited (in millions, except percentages and per share data)
	Quarterly Trends															Δ				Year-to-Date						Δ
	4Q’18			1Q’19			2Q’19			3Q’19			4Q’19			Q/Q		Y/Y		2018			2019			Y/Y
SELECTED INCOME STATEMENT DATA
Net income (loss) available to AHL common shareholders	$	(104	)	$	708		$	720		$	276		$	432		57	%	NM		$	1,053		$	2,136		103	%
Adjusted operating income available to common shareholders	240			287			370			243			389			60	%	62	%	1,140			1,289			13	%

FINANCIAL RATIOS
Return on assets (ROA)	(0.34		)%	2.19		%	2.12		%	0.78		%	1.19		%	41bps		NM		0.95		%	1.55		%	60bps
Adjusted operating ROA	0.88		%	1.02		%	1.28		%	0.82		%	1.34		%	52bps		46bps		1.22		%	1.11		%	(11)bps
Net investment spread – Retirement Services	1.43		%	1.36		%	1.68		%	1.13		%	1.84		%	71bps		41bps		1.70		%	1.50		%	(20)bps
Return on equity (ROE)	(4.8		)%	30.8		%	25.6		%	8.5		%	12.8		%	NM		NM		12.1		%	19.7		%	NM
Adjusted operating ROE	10.8		%	12.8		%	16.2		%	10.6		%	16.7		%	NM		NM		13.9		%	14.1		%	20bps
Adjusted operating ROE – Retirement Services	16.0		%	14.4		%	18.9		%	13.5		%	21.6		%	NM		NM		18.4		%	17.3		%	NM

EARNINGS AND BOOK VALUE PER COMMON SHARE
Earnings per common share – basic¹	$	(0.53	)	$	3.65		$	3.76		$	1.50		$	2.43		62	%	NM		$	5.34		$	11.44		114	%
Earnings per common share – diluted class A²	(0.53		)	3.64			3.75			1.50			2.42			61	%	NM		5.32			11.41			114	%
Adjusted operating earnings per common share³	1.23			1.50			1.95			1.34			2.21			65	%	80	%	5.82			6.97			20	%
Book value per common share	42.45			52.12			66.69			74.20			76.21			3	%	80	%	42.45			76.21			80	%
Adjusted book value per common share³	45.59			47.30			49.50			50.74			54.02			6	%	18	%	45.59			54.02			18	%

SELECTED BALANCE SHEET DATA
Total assets	$	125,505		$	132,857		$	138,980		$	144,202		$	146,875		2	%	17	%	$	125,505		$	146,875		17	%
Gross invested assets	111,034			113,771			116,671			121,140			124,563			3	%	12	%	111,034			124,563			12	%
Invested assets – ACRA noncontrolling interests	—			—			—			—			(7,077		)	NM		NM		—			(7,077		)	NM
Net invested assets	111,034			113,771			116,671			121,140			117,486			(3	)%	6	%	111,034			117,486			6	%
Total liabilities	117,229			122,740			126,615			130,657			132,734			2	%	13	%	117,229			132,734			13	%
Net reserve liabilities	107,732			111,791			114,680			118,825			114,652			(4	)%	6	%	107,732			114,652			6	%
Debt	991			991			991			992			1,467			48	%	48	%	991			1,467			48	%
Total AHL shareholders’ equity	8,276			10,117			12,365			13,545			13,391			(1	)%	62	%	8,276			13,391			62	%
Adjusted AHL common shareholders’ equity	8,823			9,102			9,127			9,204			9,445			3	%	7	%	8,823			9,445			7	%

DEPOSITS
Retail	$	2,018		$	1,816		$	1,909		$	1,921		$	1,136		(41	)%	(44	)%	$	7,542		$	6,782		(10	)%
Flow reinsurance	1,136			1,020			1,125			609			1,196			96	%	5	%	2,423			3,950			63	%
Funding agreements	225			—			299			503			499			(1	)%	122	%	650			1,301			100	%
Pension risk transfer	1,785			1,923			706			2,604			809			(69	)%	(55	)%	2,581			6,042			134	%
Gross organic deposits	5,164			4,759			4,039			5,637			3,640			(35	)%	(30	)%	13,196			18,075			37	%
Gross inorganic deposits	7,878			—			—			—			—			NM		NM		26,982			—			NM
Gross deposits	13,042			4,759			4,039			5,637			3,640			(35	)%	(72	)%	40,178			18,075			(55	)%
Deposits attributable to ACRA noncontrolling interest⁴	—			—			—			—			(544		)	NM		NM		—			(544		)	NM
Net deposits	$	13,042		$	4,759		$	4,039		$	5,637		$	3,096		(45	)%	(76	)%	$	40,178		$	17,531		(56	)%

Note: “NM” represents changes that are not meaningful. Please refer to Notes to the Financial Supplement section and the Non-GAAP Measure Reconciliations for discussion of non-GAAP metrics. 1 Basic earnings per common share, including basic weighted average common shares outstanding, includes all classes eligible to participate in dividends for each period presented. 2 Diluted earnings per common share on a GAAP basis for Class A common shares, including diluted Class A weighted average common shares outstanding, includes the dilutive impacts, if any, of Class B common shares, Class M common shares and any other stock-based awards. 3 Represents Class A common shares outstanding or weighted average common shares outstanding assuming conversion or settlement of all outstanding items that are able to be converted to or settled in Class A common shares, including the impacts of Class B common shares, Class M common shares and any other stock-based awards, but excluding any awards for which the exercise or conversion price exceeds the market value of our Class A common shares on the applicable measurement date. 4 Deposits attributable to ACRA noncontrolling interest in 4Q’19 were related to pension risk transfer activity. ACRA noncontrolling interest reserve liabilities at inception on October 1, 2019 were $6.1 billion.



Condensed Consolidated Statements of Income (GAAP view) Unaudited (in millions, except percentages)
	Quarterly Trends															Δ				Year-to-Date						Δ
	4Q’18			1Q’19			2Q’19			3Q’19			4Q’19			Q/Q		Y/Y		2018			2019			Y/Y
REVENUE
Premiums	$	1,857		$	2,000		$	787		$	2,688		$	907		(66	)%	(51	)%	$	3,462		$	6,382		84	%
Product charges	128			125			132			135			132			(2	)%	3	%	449			524			17	%
Net investment income	1,121			1,066			1,161			1,070			1,225			14	%	9	%	4,004			4,522			13	%
Investment related gains (losses)	(1,902		)	1,772			1,316			688			976			42	%	NM		(1,324		)	4,752			NM
Other-than-temporary impairment investment losses
Other-than-temporary impairment losses	(14		)	(2		)	(7		)	(34		)	(1		)	97	%	93	%	(24		)	(44		)	(83	)%
Other-than-temporary impairment losses reclassified to (from) other comprehensive income	2			1			1			9			(5		)	NM		NM		6			6			—	%
Net other-than-temporary impairment losses	(12		)	(1		)	(6		)	(25		)	(6		)	76	%	50	%	(18		)	(38		)	NM
Other revenues	4			12			9			6			10			67	%	150	%	26			37			42	%
Revenues related to consolidated variable interest entities
Net investment income	17			16			21			20			17			(15	)%	—	%	56			74			32	%
Investment related gains (losses)	(35		)	5			3			2			(5		)	NM		86	%	(18		)	5			NM
Total revenues	$	1,178		$	4,995		$	3,423		$	4,584		$	3,256		(29	)%	176	%	$	6,637		$	16,258		145	%

BENEFITS AND EXPENSES
Interest sensitive contract benefits	$	(825	)	$	1,516		$	1,094		$	801		$	1,146		43	%	NM		$	290		$	4,557		NM
Amortization of deferred sales inducements	(12		)	5			13			20			36			80	%	NM		54			74			37	%
Future policy and other policy benefits	2,018			2,329			1,111			2,955			1,192			(60	)%	(41	)%	4,281			7,587			77	%
Amortization of deferred acquisition costs and value of business acquired	(33		)	231			261			323			143			(56	)%	NM		174			958			NM
Dividends to policyholders	5			9			9			12			6			(50	)%	20	%	37			36			(3	)%
Policy and other operating expenses	172			165			185			194			200			3	%	16	%	626			744			19	%
Total benefits and expenses	1,325			4,255			2,673			4,305			2,723			(37	)%	106	%	5,462			13,956			156	%
Income (loss) before income taxes	(147		)	740			750			279			533			91	%	NM		1,175			2,302			96	%
Income tax expense (benefit)	(43		)	32			30			(14		)	69			NM		NM		122			117			(4	)%
Net income (loss)	(104		)	708			720			293			464			58	%	NM		1,053			2,185			108	%
Less: Net income attributable to noncontrolling interests	—			—			—			—			13			NM		NM		—			13			NM
Net income (loss) attributable to Athene Holding Ltd. shareholders	(104		)	708			720			293			451			54	%	NM		1,053			2,172			106	%
Less: Preferred stock dividends	—			—			—			17			19			12	%	NM		—			36			NM
Net income (loss) available to Athene Holding Ltd. common shareholders	$	(104	)	$	708		$	720		$	276		$	432		57	%	NM		$	1,053		$	2,136		103	%



Segment Results of Operations (Management view) Unaudited (in millions, except percentages and per share data)
	Quarterly Trends															Δ				Year-to-Date						Δ
	4Q’18			1Q’19			2Q’19			3Q’19			4Q’19			Q/Q		Y/Y		2018			2019			Y/Y
CONSOLIDATED
Fixed income and other investment income	$	1,142		$	1,154		$	1,175		$	1,168		$	1,185		1	%	4	%	$	3,897		$	4,682		20	%
Alternative investment income	62			49			170			124			154			24	%	148	%	335			497			48	%
Net investment earnings	1,204			1,203			1,345			1,292			1,339			4	%	11	%	4,232			5,179			22	%
Cost of crediting	(516		)	(535		)	(547		)	(576		)	(521		)	10	%	(1	)%	(1,659		)	(2,179		)	(31	)%
Other liability costs¹	(332		)	(260		)	(295		)	(358		)	(259		)	28	%	22	%	(981		)	(1,172		)	(19	)%
Cost of funds	(848		)	(795		)	(842		)	(934		)	(780		)	16	%	8	%	(2,640		)	(3,351		)	(27	)%
Operating expenses	(82		)	(82		)	(87		)	(79		)	(86		)	(9	)%	(5	)%	(303		)	(334		)	(10	)%
Interest expense	(12		)	(13		)	(12		)	(12		)	(17		)	(42	)%	(42	)%	(49		)	(54		)	(10	)%
Management fees from ACRA	—			—			—			—			2			NM		NM		—			2			NM
Pre-tax adjusted operating income	262			313			404			267			458			72	%	75	%	1,240			1,442			16	%
Income tax expense – operating	(22		)	(26		)	(34		)	(7		)	(50		)	NM		NM		(100		)	(117		)	(17	)%
Adjusted operating income	240			287			370			260			408			57	%	70	%	1,140			1,325			16	%
Preferred stock dividends	—			—			—			(17		)	(19		)	(12	)%	NM		—			(36		)	NM
Adjusted operating income available to common shareholders	$	240		$	287		$	370		$	243		$	389		60	%	62	%	$	1,140		$	1,289		13	%

Adjusted operating earnings per common share	$	1.23		$	1.50		$	1.95		$	1.34		$	2.21		65	%	80	%	$	5.82		$	6.97		20	%

RETIREMENT SERVICES
Fixed income and other investment income	$	1,132		$	1,151		$	1,170		$	1,159		$	1,172		1	%	4	%	$	3,825		$	4,652		22	%
Alternative investment income	99			20			151			105			134			28	%	35	%	363			410			13	%
Net investment earnings	1,231			1,171			1,321			1,264			1,306			3	%	6	%	4,188			5,062			21	%
Cost of crediting	(516		)	(535		)	(547		)	(576		)	(521		)	10	%	(1	)%	(1,659		)	(2,179		)	(31	)%
Other liability costs¹	(332		)	(260		)	(295		)	(358		)	(259		)	28	%	22	%	(981		)	(1,172		)	(19	)%
Cost of funds	(848		)	(795		)	(842		)	(934		)	(780		)	16	%	8	%	(2,640		)	(3,351		)	(27	)%
Operating expenses	(65		)	(62		)	(68		)	(67		)	(69		)	(3	)%	(6	)%	(242		)	(266		)	(10	)%
Interest expense	—			(2		)	(1		)	—			(5		)	NM		NM		(5		)	(8		)	(60	)%
Management fees from ACRA	—			—			—			—			2			NM		NM		—			2			NM
Pre-tax adjusted operating income	318			312			410			263			454			73	%	43	%	1,301			1,439			11	%
Income tax expense – operating	(22		)	(26		)	(34		)	(7		)	(50		)	NM		NM		(100		)	(117		)	(17	)%
Adjusted operating income available to common shareholders	$	296		$	286		$	376		$	256		$	404		58	%	36	%	$	1,201		$	1,322		10	%

CORPORATE & OTHER
Fixed income and other investment income	$	10		$	3		$	5		$	9		$	13		44	%	30	%	$	72		$	30		(58	)%
Alternative investment income	(37		)	29			19			19			20			5	%	NM		(28		)	87			NM
Net investment earnings	(27		)	32			24			28			33			18	%	NM		44			117			166	%
Operating expenses	(17		)	(20		)	(19		)	(12		)	(17		)	(42	)%	—	%	(61		)	(68		)	(11	)%
Interest expense	(12		)	(11		)	(11		)	(12		)	(12		)	—	%	—	%	(44		)	(46		)	(5	)%
Adjusted operating income (loss)	(56		)	1			(6		)	4			4			—	%	NM		(61		)	3			NM
Preferred stock dividends	—			—			—			(17		)	(19		)	(12	)%	NM		—			(36		)	NM
Adjusted operating income (loss) available to common shareholders	$	(56	)	$	1		$	(6	)	$	(13	)	$	(15	)	(15	)%	73	%	$	(61	)	$	(33	)	46	%

Note: Please refer to Notes to the Financial Supplement section and the Non-GAAP Measure Reconciliations for discussion on adjusted operating income available to common shareholders and adjusted operating earnings per common share. 1 Other liability costs primarily includes DAC, DSI and VOBA amortization and rider reserve changes for all products, the cost of liabilities on products other than deferred annuities and institutional costs including offsets for premiums, product charges and other revenues.



Reconciliation of Earnings Measures Unaudited (in millions, except percentages and per share data)
	Quarterly Trends															Δ				Year-to-Date						Δ
	4Q’18			1Q’19			2Q’19			3Q’19			4Q’19			Q/Q		Y/Y		2018			2019			Y/Y
RECONCILIATION OF NET INCOME (LOSS) AVAILABLE TO ATHENE HOLDING LTD. COMMON SHAREHOLDERS TO ADJUSTED OPERATING INCOME AVAILABLE TO COMMON SHAREHOLDERS
Net income (loss) available to Athene Holding Ltd. common shareholders	$	(104	)	$	708		$	720		$	276		$	432		57	%	NM		$	1,053		$	2,136		103	%
Non-operating adjustments
Realized gains (losses) on sale of AFS securities	(20		)	12			41			46			26			(43	)%	NM		13			125			NM
Unrealized, impairments and other investment gains (losses)	(40		)	29			10			(31		)	(12		)	61	%	70	%	(18		)	(4		)	78	%
Change in fair value of reinsurance assets	(100		)	616			570			314			(89		)	NM		11	%	(402		)	1,411			NM
Offsets to investment gains (losses)	46			(199		)	(204		)	(163		)	28			NM		(39	)%	133			(538		)	NM
Investment gains (losses), net of offsets	(114		)	458			417			166			(47		)	NM		59	%	(274		)	994			NM
Change in fair values of derivatives and embedded derivatives – FIAs, net of offsets	(288		)	(27		)	(57		)	(117		)	136			NM		NM		242			(65		)	NM
Integration, restructuring and other non-operating expenses	(4		)	(1		)	(11		)	(34		)	(24		)	29	%	NM		(22		)	(70		)	NM
Stock compensation expense	(3		)	(3		)	(3		)	(3		)	(3		)	—	%	—	%	(11		)	(12		)	(9	)%
Income tax (expense) benefit – non-operating	65			(6		)	4			21			(19		)	NM		NM		(22		)	—			NM
Less: Total non-operating adjustments	(344		)	421			350			33			43			30	%	NM		(87		)	847			NM
Adjusted operating income available to common shareholders	$	240		$	287		$	370		$	243		$	389		60	%	62	%	$	1,140		$	1,289		13	%

RECONCILIATION OF BASIC EARNINGS (LOSS) PER CLASS A COMMON SHARES TO ADJUSTED OPERATING EARNINGS PER COMMON SHARE
Basic earnings (loss) per share – Class A common shares	$	(0.53	)	$	3.65		$	3.76		$	1.50		$	2.43		62	%	NM		$	5.34		$	11.44		114	%
Non-operating adjustments
Realized gains (losses) on sale of AFS securities	(0.11		)	0.06			0.21			0.25			0.15			(40	)%	NM		0.06			0.68			NM
Unrealized, impairments and other investment gains (losses)	(0.20		)	0.16			0.05			(0.17		)	(0.07		)	59	%	65	%	(0.09		)	(0.02		)	78	%
Change in fair value of reinsurance assets	(0.51		)	3.20			3.01			1.72			(0.50		)	NM		2	%	(2.05		)	7.64			NM
Offsets to investment gains (losses)	0.23			(1.04		)	(1.07		)	(0.89		)	0.16			NM		(30	)%	0.68			(2.91		)	NM
Investment gains (losses), net of offsets	(0.59		)	2.38			2.20			0.91			(0.26		)	NM		56	%	(1.40		)	5.39			NM
Change in fair values of derivatives and embedded derivatives – FIAs, net of offsets	(1.47		)	(0.14		)	(0.30		)	(0.65		)	0.77			NM		NM		1.24			(0.36		)	NM
Integration, restructuring and other non-operating expenses	(0.02		)	(0.01		)	(0.06		)	(0.18		)	(0.13		)	28	%	NM		(0.12		)	(0.37		)	NM
Stock compensation expense	(0.01		)	(0.01		)	(0.02		)	(0.02		)	(0.02		)	—	%	(100	)%	(0.05		)	(0.07		)	(40	)%
Income tax (expense) benefit – non-operating	0.33			(0.03		)	0.02			0.12			(0.11		)	NM		NM		(0.11		)	—			NM
Less: Total non-operating adjustments	(1.76		)	2.19			1.84			0.18			0.25			39	%	NM		(0.44		)	4.59			NM
Effect of items convertible to or settled in Class A common shares	—			(0.04		)	(0.03		)	(0.02		)	(0.03		)	(50	)%	NM		(0.04		)	(0.12		)	NM
Adjusted operating earnings per common share	$	1.23		$	1.50		$	1.95		$	1.34		$	2.21		65	%	80	%	$	5.82		$	6.97		20	%

Note: Please refer to Notes to the Financial Supplement section for discussion on adjusted operating income available to common shareholders.



Retirement Services Segment Highlights Unaudited (in millions, except percentages)
	Quarterly Trends															Δ				Year-to-Date						Δ
	4Q’18			1Q’19			2Q’19			3Q’19			4Q’19			Q/Q		Y/Y		2018			2019			Y/Y
NET INVESTMENT SPREAD – RETIREMENT SERVICES
Net investment earned rate	4.57		%	4.21		%	4.63		%	4.31		%	4.57		%	26bps		0bps		4.60		%	4.43		%	(17)bps
Cost of crediting	1.91		%	1.92		%	1.92		%	1.96		%	1.83		%	(13)bps		(8)bps		1.82		%	1.91		%	9bps
Other liability costs	1.23		%	0.93		%	1.03		%	1.22		%	0.90		%	(32)bps		(33)bps		1.08		%	1.02		%	(6)bps
Cost of funds	3.14		%	2.85		%	2.95		%	3.18		%	2.73		%	(45)bps		(41)bps		2.90		%	2.93		%	3bps
Net investment spread	1.43		%	1.36		%	1.68		%	1.13		%	1.84		%	71bps		41bps		1.70		%	1.50		%	(20)bps

Average net invested assets	$	107,939		$	111,443		$	114,059		$	117,338		$	114,149		(3	)%	6	%	$	90,995		$	114,310		26	%

COST OF CREDITING – RETIREMENT SERVICES
FIA option costs	$	261		$	265		$	265		$	265		$	252		(5	)%	(3	)%	$	837		$	1,047		25	%
Fixed interest credited to policyholders	182			179			183			188			177			(6	)%	(3	)%	594			727			22	%
Cost of crediting on deferred annuities	443			444			448			453			429			(5	)%	(3	)%	1,431			1,774			24	%
Average account value on deferred annuities	88,874			89,809			90,675			91,467			87,660			(4	)%	(1	)%	73,567			89,878			22	%
Cost of crediting on deferred annuities rate	2.00		%	1.98		%	1.98		%	1.98		%	1.95		%	(3)bps		(5)bps		1.95		%	1.97		%	2bps

Cost of crediting on institutional products	$	73		$	91		$	99		$	123		$	92		(25	)%	26	%	$	228		$	405		78	%
Average institutional reserve liabilities	7,827			9,809			10,470			13,320			12,931			(3	)%	65	%	6,683			11,632			74	%
Cost of crediting on institutional products rate	3.74		%	3.69		%	3.76		%	3.68		%	2.85		%	(83)bps		(89)bps		3.42		%	3.47		%	5bps

Cost of crediting	$	516		$	535		$	547		$	576		$	521		(10	)%	1	%	$	1,659		$	2,179		31	%

OTHER LIABILITY COSTS – RETIREMENT SERVICES
Change in rider reserve	$	173		$	154		$	138		$	114		$	124		9	%	(28	)%	$	615		$	530		(14	)%
DAC, DSI and VOBA amortization	130			91			125			226			131			(42	)%	1	%	272			573			111	%
Other¹	29			15			32			18			4			(78	)%	(86	)%	94			69			(27	)%
Other liability costs	$	332		$	260		$	295		$	358		$	259		(28	)%	(22	)%	$	981		$	1,172		19	%

INVESTMENT MARGIN ON DEFERRED ANNUITIES – RETIREMENT SERVICES
Net investment earned rate	4.57		%	4.21		%	4.63		%	4.31		%	4.57		%	26bps		0bps		4.60		%	4.43		%	(17)bps
Cost of crediting on deferred annuities	2.00		%	1.98		%	1.98		%	1.98		%	1.95		%	(3)bps		(5)bps		1.95		%	1.97		%	2bps
Investment margin on deferred annuities	2.57		%	2.23		%	2.65		%	2.33		%	2.62		%	29bps		5bps		2.65		%	2.46		%	(19)bps

Note: Please refer to Notes to the Financial Supplement section and the Non-GAAP Reconciliations for discussion on net investment spread, investment margin on deferred annuities, net investment earned rate, cost of crediting on deferred annuities and other liability costs. 1 Other primarily includes payout annuities, policy maintenance costs, reinsurance expense allowances, excise taxes and non-deferred acquisition costs, net of product charges.



Condensed Consolidated Balance Sheets Unaudited (in millions, except percentages)
	December 31, 2018		December 31, 2019		Δ
ASSETS
Investments
Available-for-sale securities, at fair value	$	59,265	$	71,374	20	%
Trading securities, at fair value	1,949		2,054		5	%
Equity securities, at fair value	216		247		14	%
Mortgage loans, net of allowances	10,340		14,306		38	%
Investment funds	703		731		4	%
Policy loans	488		417		(15	)%
Funds withheld at interest	15,023		15,181		1	%
Derivative assets	1,043		2,888		177	%
Short-term investments	191		596		212	%
Other investments	122		158		30	%
Total investments	89,340		107,952		21	%
Cash and cash equivalents	2,911		4,237		46	%
Restricted cash	492		402		(18	)%
Investments in related parties
Available-for-sale securities, at fair value	1,437		3,804		165	%
Trading securities, at fair value	249		785		215	%
Equity securities, at fair value	120		58		(52	)%
Mortgage loans	291		653		124	%
Investment funds	2,232		2,886		29	%
Funds withheld at interest	13,577		13,220		(3	)%
Other investments	386		487		26	%
Accrued investment income	682		807		18	%
Reinsurance recoverable	5,534		4,863		(12	)%
Deferred acquisition costs, deferred sales inducements and value of business acquired	5,907		5,008		(15	)%
Other assets	1,635		985		(40	)%
Assets of consolidated variable interest entities
Investments
Trading securities, at fair value	35		16		(54	)%
Equity securities, at fair value – related party	50		6		(88	)%
Investment funds	624		683		9	%
Cash and cash equivalents	2		3		50	%
Other assets	1		20		NM
Total assets	$	125,505	$	146,875	17	%



Condensed Consolidated Balance Sheets, continued Unaudited (in millions, except percentages)
	December 31, 2018			December 31, 2019		Δ
LIABILITIES
Interest sensitive contract liabilities	$	96,610		$	102,745	6	%
Future policy benefits	16,704			23,330		40	%
Other policy claims and benefits	142			138		(3	)%
Dividends payable to policyholders	118			113		(4	)%
Short-term debt	—			475		NM
Long-term debt	991			992		—	%
Derivative liabilities	85			97		14	%
Payables for collateral on derivatives and securities to repurchase	969			3,255		236	%
Funds withheld liability	721			408		(43	)%
Other liabilities	889			1,181		33	%
Total liabilities	117,229			132,734		13	%

EQUITY
Preferred stock	—			—		NM
Common stock	—			—		NM
Additional paid-in-capital	3,462			4,171		20	%
Retained earnings	5,286			6,939		31	%
Accumulated other comprehensive income (loss)	(472		)	2,281		NM
Total Athene Holding Ltd. shareholders’ equity	8,276			13,391		62	%
Noncontrolling interests	—			750		NM
Total equity	8,276			14,141		71	%
Total liabilities and equity	$	125,505		$	146,875	17	%



Investments (GAAP view) Unaudited (in millions, except percentages)
	December 31, 2018				December 31, 2019
	Carrying Value		Percent of Total		Carrying Value		Percent of Total
INVESTMENTS AND INVESTMENTS IN RELATED PARTIES SUMMARY
Investments
Available-for-sale securities, at fair value
U.S. government and agencies	$	57	0.1	%	$	36	—	%
U.S. state, municipal and political subdivisions	1,293		1.2	%	1,541		1.2	%
Foreign governments	161		0.1	%	327		0.3	%
Corporate	37,097		34.4	%	47,228		36.4	%
CLO	5,361		5.0	%	7,349		5.7	%
ABS	4,920		4.6	%	5,118		3.9	%
CMBS	2,357		2.2	%	2,400		1.8	%
RMBS	8,019		7.5	%	7,375		5.7	%
Total available-for-sale securities, at fair value	59,265		55.1	%	71,374		55.0	%
Trading securities, at fair value	1,949		1.8	%	2,054		1.6	%
Equity securities, at fair value	216		0.2	%	247		0.2	%
Mortgage loans, net of allowances	10,340		9.6	%	14,306		11.0	%
Investment funds	703		0.6	%	731		0.6	%
Policy loans	488		0.4	%	417		0.3	%
Funds withheld at interest	15,023		14.0	%	15,181		11.7	%
Derivative assets	1,043		1.0	%	2,888		2.2	%
Short-term investments	191		0.2	%	596		0.5	%
Other investments	122		0.1	%	158		0.1	%
Total investments	89,340		83.0	%	107,952		83.2	%
Investments in related parties
Available-for-sale securities, at fair value
Corporate	—		—	%	19		—	%
CLO	562		0.5	%	936		0.7	%
ABS	875		0.8	%	2,849		2.2	%
Total available-for-sale securities, at fair value	1,437		1.3	%	3,804		2.9	%
Trading securities, at fair value	249		0.2	%	785		0.6	%
Equity securities, at fair value	120		0.1	%	58		—	%
Mortgage loans	291		0.3	%	653		0.5	%
Investment funds	2,232		2.1	%	2,886		2.2	%
Funds withheld at interest	13,577		12.6	%	13,220		10.2	%
Other investments	386		0.4	%	487		0.4	%
Total investments in related parties	18,292		17.0	%	21,893		16.8	%
Total investments including related parties	$	107,632	100.0	%	$	129,845	100.0	%



Net Invested Assets (Management view) Unaudited (in millions, except percentages)
	December 31, 2018				December 31, 2019
	Invested Asset Value¹		Percent of Total		Invested Asset Value¹		Percent of Total
NET INVESTED ASSETS
Corporate	$	55,772	50.2	%	$	55,077	46.9	%
CLO	8,275		7.5	%	10,223		8.7	%
Credit	64,047		57.7	%	65,300		55.6	%
RMBS	9,814		8.9	%	8,394		7.1	%
Mortgage loans	14,423		13.0	%	18,528		15.8	%
CMBS	3,018		2.7	%	2,930		2.5	%
Real estate	27,255		24.6	%	29,852		25.4	%
ABS	7,706		6.9	%	10,317		8.8	%
Alternative investments	4,492		4.1	%	5,586		4.8	%
State, municipal, political subdivisions and foreign government	2,122		1.9	%	2,260		1.9	%
Equity securities	467		0.4	%	365		0.3	%
Short-term investments	765		0.7	%	624		0.5	%
U.S. government and agencies	134		0.1	%	49		0.0	%
Other investments	15,686		14.1	%	19,201		16.3	%
Cash and equivalents	2,881		2.6	%	1,958		1.7	%
Policy loans and other	1,165		1.0	%	1,175		1.0	%
Net invested assets	$	111,034	100.0	%	$	117,486	100.0	%

1 Net invested assets includes our economic ownership of ACRA investments but does not include the investments associated with the noncontrolling interest. Please refer to Notes to the Financial Supplement for discussion on net invested assets including net alternative investments and Non-GAAP Measure Reconciliations for the reconciliation of investments including related parties to net invested assets.



Investment Funds (GAAP view) Unaudited (in millions, except percentages)
	December 31, 2018				December 31, 2019
	Carrying Value		Percent of Total		Carrying Value		Percent of Total
INVESTMENT FUNDS INCLUDING RELATED PARTIES¹
Investment funds
Real estate	$	215	6.0	%	$	277	6.4	%
Credit funds	172		4.8	%	153		3.6	%
Private equity	253		7.1	%	236		5.5	%
Real assets	56		1.6	%	64		1.5	%
Natural resources	4		0.1	%	1		—	%
Other	3		0.1	%	—		—	%
Total investment funds	703		19.7	%	731		17.0	%
Investment funds – related parties
Differentiated investments
AmeriHome	463		13.0	%	487		11.3	%
Catalina	233		6.5	%	271		6.3	%
Athora	105		3.0	%	132		3.1	%
Venerable	92		2.6	%	99		2.3	%
Other	196		5.5	%	222		5.2	%
Total differentiated investments	1,089		30.6	%	1,211		28.2	%
Real estate	497		14.0	%	736		17.1	%
Credit funds	316		8.9	%	370		8.6	%
Private equity	18		0.5	%	105		2.4	%
Real assets	145		4.1	%	182		4.2	%
Natural resources	104		2.9	%	163		3.8	%
Public equities	63		1.8	%	119		2.8	%
Total investment funds – related parties	2,232		62.8	%	2,886		67.1	%
Investment funds – assets of consolidated VIEs
MidCap	553		15.5	%	547		12.7	%
Real estate	30		0.8	%	117		2.7	%
Real assets	41		1.2	%	19		0.5	%
Total investment funds – assets of consolidated VIEs	624		17.5	%	683		15.9	%
Total investment funds including related parties and funds owned by consolidated VIEs	$	3,559	100.0	%	$	4,300	100.0	%

Note: The investment funds balances include the entire investment fund balance attributable to ACRA as ACRA is 100% consolidated. 1 Investment funds, including related parties and investment funds of consolidated VIE’s, is the GAAP measure which does not include investments that we view as alternative investments. Alternative investments include CLO equity tranche securities that are included in trading securities in the GAAP view, a nonredeemable preferred stock viewed as an alternative investment for management view but included in equity securities for GAAP view, investment funds included in our funds withheld at interest reinsurance portfolios, net assets of VIEs other than investment funds as well as royalties and other investments. Please refer to Notes to the Financial Supplement section for discussion on net invested assets including net alternative investments and the Non-GAAP Measure Reconciliations section for the reconciliation of investment funds to net alternative investments.



Net Alternative Investments (Management view) Unaudited (in millions, except percentages)
	December 31, 2018				December 31, 2019
	Invested Asset Value¹		Percent of Total		Invested Asset Value¹		Percent of Total
NET ALTERNATIVE INVESTMENTS
Retirement Services
Differentiated investments
AmeriHome	$	568	12.6	%	$	595	10.7	%
MidCap	553		12.3	%	547		9.8	%
Catalina	232		5.2	%	271		4.9	%
Venerable	92		2.1	%	99		1.8	%
Other	229		5.1	%	208		3.7	%
Total differentiated investments	1,674		37.3	%	1,720		30.9	%
Real estate	1,015		22.6	%	1,430		25.6	%
Credit	537		11.9	%	968		17.3	%
Private equity	279		6.2	%	378		6.8	%
Real assets	276		6.2	%	349		6.2	%
Natural resources	55		1.2	%	51		0.9	%
Other	4		0.1	%	58		1.0	%
Total Retirement Services	3,840		85.5	%	4,954		88.7	%
Corporate & Other
Athora	130		2.9	%	140		2.5	%
Credit	203		4.5	%	128		2.3	%
Natural resources	213		4.8	%	245		4.4	%
Public equities²	100		2.2	%	119		2.1	%
Other	6		0.1	%	—		—	%
Total Corporate & Other	652		14.5	%	632		11.3	%
Net alternative investments¹	$	4,492	100.0	%	$	5,586	100.0	%

Note: Net invested assets includes our economic ownership of ACRA investments but does not include the investments associated with the noncontrolling interest.
1 Net alternative investments does not correspond to the total investment funds, including related parties and VIEs, on our condensed consolidated balance sheets. Net alternative investments adjusts the GAAP presentation to include CLO equity tranche securities that are included in trading securities in the GAAP view, a nonredeemable preferred stock viewed as an alternative investment for management view but included in equity securities for GAAP view, investment funds included in our funds withheld at interest reinsurance portfolios, net assets of VIEs other than investment funds, as well as royalties and other investments. Please refer to Notes to the Financial Supplement section for discussion on net invested assets including net alternative investments and the Non-GAAP Measure Reconciliations section for the reconciliation of investment funds, including related parties and VIEs to net alternative investments.
2 Public Equities include: OneMain Financial (OMF) - 2.8 million and 2.8 million of shares, respectively, as of December 31, 2019 and December 31, 2018; Caesars Entertainment (Ticker: CZR) - 0.0 million and 5.5 million of shares as of December 31, 2019 and December 31, 2018.



Funds Withheld at Interest (GAAP view) Unaudited (in millions, except percentages)
	December 31, 2018					December 31, 2019
	Carrying Value			Percent of Total		Carrying Value			Percent of Total
FUNDS WITHHELD AT INTEREST INCLUDING RELATED PARTIES
Fixed maturity securities
U.S. government and agencies	$	77		0.3	%	$	15		0.1	%
U.S. state, municipal and political subdivisions	563			2.0	%	482			1.7	%
Foreign governments	145			0.5	%	143			0.5	%
Corporate	16,267			56.9	%	14,590			51.4	%
CLO	1,990			7.0	%	2,586			9.1	%
ABS	1,601			5.6	%	2,510			8.8	%
CMBS	575			2.0	%	756			2.7	%
RMBS	1,876			6.6	%	1,482			5.2	%
Total fixed maturity securities	23,094			80.9	%	22,564			79.5	%
Equity securities	66			0.2	%	74			0.3	%
Mortgage loans	3,815			13.3	%	4,357			15.3	%
Investment funds	660			2.3	%	807			2.8	%
Derivative assets	77			0.3	%	224			0.8	%
Short-term investments	641			2.2	%	157			0.6	%
Cash and cash equivalents	455			1.6	%	239			0.8	%
Other assets and liabilities	(208		)	(0.8	)%	(21		)	(0.1	)%
Total funds withheld at interest including related parties¹	$	28,600		100.0	%	$	28,401		100.0	%

1 Funds withheld at interest represents a receivable for amounts contractually withheld by ceding companies in accordance with modco and funds withheld reinsurance agreements in which we act as the reinsurer. In managing our business we utilize invested assets, where we adjust the presentation for funds withheld and modco transactions to include or exclude the underlying investments based upon the contractual transfer of economic exposure to such underlying investments.



Net Investment Earned Rates (NIER) Unaudited (In millions, except percentages)
	Quarterly Trends															Δ				Year-to-Date						Δ
	4Q’18			1Q’19			2Q’19			3Q’19			4Q’19			Q/Q		Y/Y		2018			2019			Y/Y
NIER – CONSOLIDATED
Fixed income and other investments	4.35		%	4.28		%	4.26		%	4.11		%	4.29		%	18bps		(6)bps		4.37		%	4.23		%	(14)bps
Alternative investments	5.81		%	4.36		%	14.13		%	9.26		%	11.15		%	189bps		NM		8.51		%	9.84		%	133bps
Total net investment earned rate	4.40		%	4.28		%	4.67		%	4.35		%	4.62		%	27bps		22bps		4.54		%	4.48		%	(6)bps

NIER SUMMARY – RETIREMENT SERVICES
Fixed income and other investments	4.35		%	4.28		%	4.26		%	4.11		%	4.29		%	18bps		(6)bps		4.36		%	4.23		%	(13)bps
Alternative investments	11.00		%	2.13		%	14.46		%	8.90		%	10.94		%	204bps		(6)bps		11.15		%	9.32		%	NM
Total net investment earned rate	4.57		%	4.21		%	4.63		%	4.31		%	4.57		%	26bps		0bps		4.60		%	4.43		%	(17)bps

Fixed income and other investment income	$	1,132		$	1,151		$	1,170		$	1,159		$	1,172		1	%	4	%	$	3,825		$	4,652		22	%
Alternatives investment income	99			20			151			105			134			28	%	35	%	363			410			13	%
Total net investment earnings	$	1,231		$	1,171		$	1,321		$	1,264		$	1,306		3	%	6	%	$	4,188		$	5,062		21	%

Fixed income and other investments	$	104,342		$	107,641		$	109,888		$	112,611		$	109,250		(3	)%	5	%	$	87,741		$	109,909		25	%
Alternatives investments	3,597			3,802			4,171			4,727			4,899			4	%	36	%	3,254			4,401			35	%
Total average net invested assets	$	107,939		$	111,443		$	114,059		$	117,338		$	114,149		(3	)%	6	%	$	90,995		$	114,310		26	%

NIER SUMMARY – CORPORATE & OTHER
Fixed income and other investments	4.34		%	4.28		%	4.26		%	4.12		%	4.29		%	17bps		(5)bps		4.77		%	4.11		%	(66)bps
Alternative investments	(22.46		)%	17.66		%	11.96		%	11.95		%	12.82		%	87bps		NM		(4.12		)%	13.51		%	NM
Total net investment earned rate	(7.57		)%	13.19		%	8.39		%	7.28		%	7.16		%	(12)bps		NM		1.99		%	8.33		%	NM

Fixed income and other investment income	$	10		$	3		$	5		$	9		$	13		44	%	30	%	$	72		$	30		(58	)%
Alternatives investment income	(37		)	29			19			19			20			5	%	NM		(28		)	87			NM
Total net investment earnings	$	(27	)	$	32		$	24		$	28		$	33		18	%	NM		$	44		$	117		166	%

Fixed income and other investments	$	824		$	320		$	539		$	935		$	1,218		30	%	48	%	$	1,501		$	776		(48	)%
Alternatives investments	660			639			623			632			619			(2	)%	(6	)%	681			633			(7	)%
Total average net invested assets	$	1,484		$	959		$	1,162		$	1,567		$	1,837		17	%	24	%	$	2,182		$	1,409		(35	)%

Note: Please refer to Notes to the Financial Supplement section and the Non-GAAP Measure Reconciliations for discussion on net investment earned rate. The investment results above are presented net of investment management fees.



Net Investment Earned Rates (NIER), continued Unaudited (in millions, except percentages)
	Quarterly Trends										Δ		Year-to-Date				Δ
	4Q’18		1Q’19		2Q’19¹		3Q’19		4Q’19		Q/Q	Y/Y	2018		2019		Y/Y
NIER BY ASSET CLASS
Corporate securities	3.99	%	3.93	%	4.12	%	3.94	%	4.15	%	21bps	16bps	3.95	%	4.03	%	8bps
Structured securities
RMBS	6.03	%	6.03	%	5.07	%	4.39	%	5.03	%	64bps	(100)bps	5.84	%	5.15	%	(69)bps
CLO	4.69	%	4.76	%	4.73	%	4.57	%	4.45	%	(12)bps	(24)bps	4.91	%	4.62	%	(29)bps
ABS	4.55	%	3.95	%	4.34	%	4.14	%	3.88	%	(26)bps	(67)bps	4.58	%	4.02	%	(56)bps
CMBS	4.18	%	4.16	%	3.93	%	3.96	%	5.27	%	131bps	109bps	4.33	%	4.37	%	4bps
Total structured securities	5.07	%	4.90	%	4.64	%	4.33	%	4.52	%	19bps	(55)bps	5.13	%	4.58	%	(55)bps
State, municipal, political subdivisions and U.S. and foreign government	4.19	%	4.27	%	3.80	%	3.88	%	4.07	%	19bps	(12)bps	4.35	%	4.01	%	(34)bps
Mortgage loans	4.99	%	4.91	%	4.54	%	4.66	%	4.58	%	(8)bps	(41)bps	5.15	%	4.66	%	(49)bps
Alternative investments	5.81	%	4.36	%	14.13	%	9.26	%	11.15	%	189bps	NM	8.51	%	9.84	%	133bps
Other U.S. and Bermuda net invested assets	2.45	%	2.70	%	2.84	%	2.94	%	3.33	%	39bps	88bps	2.30	%	2.93	%	63bps
Consolidated net investment earned rate	4.40	%	4.28	%	4.67	%	4.35	%	4.62	%	27bps	22bps	4.54	%	4.48	%	(6)bps

Note: Please refer to Notes to the Financial Supplement section and the Non-GAAP Measure Reconciliations for discussion on net investment earned rate. The investment results above are presented net of investment management fees. 1 In the second quarter of 2019, we implemented a new management fee structure which changed the allocation of fees by asset class. Although the implementation of the new management fee structure had impacts on the allocation of fees by asset class, on a consolidated basis the impact was immaterial.



Credit Quality of Securities Unaudited (in millions, except percentages)
	December 31, 2018				December 31, 2019
CREDIT QUALITY OF AFS SECURITIES (GAAP VIEW)	Fair Value		Percent of Total		Fair Value		Percent of Total
NAIC designation
1	$	31,311	51.6	%	$	38,667	51.4	%
2	25,871		42.6	%	32,336		43.0	%
Total investment grade	57,182		94.2	%	71,003		94.4	%
3	2,746		4.5	%	3,300		4.4	%
4	533		0.9	%	740		1.0	%
5	232		0.4	%	94		0.1	%
6	9		0.0	%	41		0.1	%
Total below investment grade	3,520		5.8	%	4,175		5.6	%
Total AFS securities including related parties	$	60,702	100.0	%	$	75,178	100.0	%

NRSRO designation
AAA/AA/A	$	19,690	32.4	%	$	28,299	37.7	%
BBB	23,326		38.4	%	29,032		38.6	%
Non-rated¹	9,624		15.9	%	10,014		13.3	%
Total investment grade²	52,640		86.7	%	67,345		89.6	%
BB	2,670		4.4	%	3,403		4.5	%
B	875		1.4	%	813		1.1	%
CCC	2,340		3.9	%	1,981		2.6	%
CC and lower	1,296		2.1	%	1,076		1.4	%
Non-rated¹	881		1.5	%	560		0.8	%
Total below investment grade	8,062		13.3	%	7,833		10.4	%
Total AFS securities including related parties	$	60,702	100.0	%	$	75,178	100.0	%

	Invested Asset Value³		% NAIC 1 or 2		Invested Asset Value³		% NAIC 1 or 2
SUMMARY OF NAIC 1 & 2 DESIGNATIONS BY ASSET CLASS (MANAGEMENT VIEW)
Corporate securities	$	52,496	93.8	%	$	51,175	92.9	%
RMBS	9,410		96.0	%	8,001		95.3	%
CLO	7,823		94.5	%	10,053		98.3	%
ABS	7,146		92.8	%	9,476		91.8	%
CMBS	2,797		92.7	%	2,634		89.9	%
Total structured securities	27,176		94.3	%	30,164		94.7	%
State, municipal, political subdivisions and U.S. and foreign government	2,233		99.0	%	2,291		99.2	%
Short-term investments	775		100.0	%	597		95.5	%
Total NAIC 1 & 2 Designations	$	82,680			$	84,227

1 Securities denoted as non-rated by the NRSRO were classified as investment or non-investment grade according to the security’s respective NAIC designation. With respect to modeled LBaSS, and prior to January 1, 2019, non-modeled LBaSS, the NAIC designation methodology differs in significant respects from the NRSRO ratings methodology. 2 We view the NAIC designation methodology as the most appropriate way to view our AFS portfolio when evaluating credit risk since a large portion of our holdings were purchased at a significant discount to par. With respect to loan-backed and structured securities, the NAIC designation methodology differs in significant respects from the NRSRO rating methodology. NRSRO ratings methodology is focused on the likelihood of recovery of all contractual payments, including principal at par regardless of entry price, while the NAIC designation methodology considers our investment at amortized cost, and the likelihood of recovery of that book value as opposed to the likelihood of the recovery of all contractual payments. 3 Please refer to Notes to the Financial Supplement section for discussion on net invested assets and Non-GAAP Measure Reconciliations section for the reconciliation of total investments including related parties to net invested assets.



Credit Quality of Net Invested Assets (Management view) Unaudited (In millions, except percentages)
	December 31, 2018				December 31, 2019					December 31, 2018				December 31, 2019
	Invested Asset Value¹		% of Total		Invested Asset Value¹		% of Total			Invested Asset Value¹		% of Total		Invested Asset Value¹		% of Total
CREDIT QUALITY OF NET INVESTED ASSETS									CREDIT QUALITY OF NET INVESTED ASSETS
NAIC designation									NRSRO designation
1	$	45,287	51.7	%	$	45,836	51.0	%	AAA/AA/A	$	30,630	35.0	%	$	33,918	37.7	%
2	37,393		42.7	%	38,391		42.7	%	BBB	33,289		38.0	%	33,902		37.7	%
Non-rated³	—		—	%	—		—	%	Non-rated³	13,522		15.4	%	12,448		13.9	%
Total investment grade	82,680		94.4	%	84,227		93.7	%	Total investment grade	77,441		88.4	%	80,268		89.3	%
3	3,659		4.2	%	4,056		4.5	%	BB	3,587		4.1	%	3,984		4.4	%
4	930		1.1	%	1,246		1.4	%	B	1,316		1.5	%	1,300		1.5	%
5	315		0.3	%	289		0.3	%	CCC	2,610		3.0	%	2,177		2.4	%
6	22		0.0	%	56		0.1	%	CC and lower	1,412		1.6	%	1,138		1.3	%
Non-rated³	—		—	%	—		—	%	Non-rated³	1,240		1.4	%	1,007		1.1	%
Total below investment grade	4,926		5.6	%	5,647		6.3	%	Total below investment grade	10,165		11.6	%	9,606		10.7	%
Total NAIC designated assets²	87,606		100.0	%	89,874		100.0	%	Total NRSRO designated assets²	87,606		100.0	%	89,874		100.0	%

Assets without NAIC designation									Assets without NRSRO designation
Commercial mortgage loans									Commercial mortgage loans
CM1	4,276		39.3	%	4,102		29.2	%	CM1	4,276		39.3	%	4,102		29.2	%
CM2	4,184		38.4	%	6,050		43.1	%	CM2	4,184		38.4	%	6,050		43.1	%
CM3	1,894		17.4	%	3,481		24.8	%	CM3	1,894		17.4	%	3,481		24.8	%
CM4	393		3.6	%	365		2.6	%	CM4	393		3.6	%	365		2.6	%
CM5	138		1.3	%	40		0.3	%	CM5	138		1.3	%	40		0.3	%
CM6	—		—	%	—		—	%	CM6	—		—	%	—		—	%
CM7	—		—	%	—		—	%	CM7	—		—	%	—		—	%
Total CMLs	10,885		100.0	%	14,038		100.0	%	Total CMLs	10,885		100.0	%	14,038		100.0	%
Residential mortgage loans									Residential mortgage loans
In good standing	3,490		98.7	%	4,423		98.5	%	In good standing	3,490		98.7	%	4,423		98.5	%
90 days late	33		0.9	%	34		0.8	%	90 days late	33		0.9	%	34		0.8	%
In foreclosure	15		0.4	%	33		0.7	%	In foreclosure	15		0.4	%	33		0.7	%
Total RMLs	3,538		100.0	%	4,490		100.0	%	Total RMLs	3,538		100.0	%	4,490		100.0	%
Alternative investments	4,492				5,586				Alternative investments	4,492				5,586
Cash and equivalents	2,881				1,958				Cash and equivalents	2,881				1,958
Equity securities	467				365				Equity securities	467				365
Other⁴	1,165				1,175				Other⁴	1,165				1,175
Net invested assets	$	111,034			$	117,486			Net invested assets	$	111,034			$	117,486

1 Please refer to Notes to the Financial Supplement section for discussion on net invested assets and Non-GAAP Measure Reconciliations section for the reconciliation of total investments including related parties to net invested assets. 2 NAIC and NRSRO designations include corporates, CLO, RMBS, CMBS, ABS, state, municipal, political subdivisions and foreign government securities, short-term investments and U.S. government and agencies securities. 3 Securities denoted as non-rated by the NRSRO were classified as investment or non-investment grade according to the security’s respective NAIC designation. With respect to modeled LBaSS, and prior to January 1, 2019, non-modeled LBaSS, the NAIC designation methodology differs in significant respects from the NRSRO ratings methodology. 4 Other includes policy loans, accrued interest, and other invested assets.



Credit Quality of Net Invested Assets – RMBS, CLOs, ABS (Management view) Unaudited (In millions, except percentages)
	December 31, 2018				December 31, 2019					December 31, 2018				December 31, 2019
	Invested Asset Value¹		% of Total		Invested Asset Value¹		% of Total			Invested Asset Value¹		% of Total		Invested Asset Value¹		% of Total
CREDIT QUALITY OF RMBS – NAIC DESIGNATION									CREDIT QUALITY OF RMBS – NRSRO DESIGNATION
1	$	9,097	92.8	%	$	7,610	90.7	%	AAA/AA/A	$	1,129	11.5	%	$	1,068	12.7	%
2	313		3.2	%	391		4.6	%	BBB	314		3.2	%	717		8.5	%
Non-rated²	—		—	%	—		—	%	Non-rated²	3,337		34.0	%	2,702		32.2	%
Total investment grade	9,410		96.0	%	8,001		95.3	%	Total investment grade	4,780		48.7	%	4,487		53.4	%
3	248		2.5	%	311		3.7	%	BB	507		5.1	%	288		3.4	%
4	112		1.1	%	58		0.7	%	B	372		3.8	%	251		3.0	%
5	28		0.3	%	10		0.1	%	CCC	2,521		25.7	%	2,061		24.6	%
6	16		0.1	%	14		0.2	%	CC and lower	1,410		14.4	%	1,134		13.5	%
Non-rated²	—		—	%	—		—	%	Non-rated²	224		2.3	%	173		2.1	%
Total below investment grade	404		4.0	%	393		4.7	%	Total below investment grade	5,034		51.3	%	3,907		46.6	%
RMBS net invested assets	$	9,814	100.0	%	$	8,394	100.0	%	RMBS net invested assets	$	9,814	100.0	%	$	8,394	100.0	%

CREDIT QUALITY OF CLOs – NAIC DESIGNATION									CREDIT QUALITY OF CLOs – NRSRO DESIGNATION
1	$	4,666	56.4	%	$	5,796	56.7	%	AAA/AA/A	$	4,530	54.7	%	$	5,796	56.7	%
2	3,157		38.1	%	4,257		41.6	%	BBB	3,555		43.0	%	4,257		41.6	%
Non-rated²	—		—	%	—		—	%	Non-rated²	—		—	%	—		—	%
Total investment grade	7,823		94.5	%	10,053		98.3	%	Total investment grade	8,085		97.7	%	10,053		98.3	%
3	423		5.1	%	141		1.4	%	BB	161		1.9	%	141		1.4	%
4	22		0.3	%	22		0.2	%	B	29		0.4	%	22		0.2	%
5	7		0.1	%	7		0.1	%	CCC	—		—	%	7		0.1	%
6	—		—	%	—		—	%	CC and lower	—		—	%	—		—	%
Total below investment grade	452		5.5	%	170		1.7	%	Total below investment grade	190		2.3	%	170		1.7	%
CLOs net invested assets	$	8,275	100.0	%	$	10,223	100.0	%	CLOs net invested assets	$	8,275	100.0	%	$	10,223	100.0	%

CREDIT QUALITY OF ABS – NAIC DESIGNATION									CREDIT QUALITY OF ABS – NRSRO DESIGNATION
1	$	4,720	61.3	%	$	6,518	63.1	%	AAA/AA/A	$	3,319	43.1	%	$	5,297	51.3	%
2	2,426		31.5	%	2,958		28.7	%	BBB	1,948		25.3	%	2,268		22.0	%
Non-rated²	—		—	%	—		—	%	Non-rated²	1,661		21.5	%	1,911		18.5	%
Total investment grade	7,146		92.8	%	9,476		91.8	%	Total investment grade	6,928		89.9	%	9,476		91.8	%
3	369		4.8	%	565		5.5	%	BB	436		5.7	%	545		5.3	%
4	43		0.5	%	126		1.2	%	B	89		1.1	%	126		1.2	%
5	148		1.9	%	150		1.5	%	CCC	—		—	%	6		0.1	%
6	—		—	%	—		—	%	CC and lower	—		—	%	—		—	%
Non-rated²	—		—	%	—		—	%	Non-rated²	253		3.3	%	164		1.6	%
Total below investment grade	560		7.2	%	841		8.2	%	Total below investment grade	778		10.1	%	841		8.2	%
ABS net invested assets	$	7,706	100.0	%	$	10,317	100.0	%	ABS net invested assets	$	7,706	100.0	%	$	10,317	100.0	%

1 Please refer to Notes to the Financial Supplement section for discussion on net invested assets and Non-GAAP Measure Reconciliations section for the reconciliation of total investments including related parties to net invested assets. 2 Securities denoted as non-rated by the NRSRO were classified as investment or non-investment grade according to the security’s respective NAIC designation. With respect to modeled LBaSS, and prior to January 1, 2019, non-modeled LBaSS, the NAIC designation methodology differs in significant respects from the NRSRO ratings methodology.



Net Reserve Liabilities & Rollforwards Unaudited (in millions, except percentages)
	December 31, 2018				December 31, 2019
	Dollars		Percent of Total		Dollars		Percent of Total
NET RESERVE LIABILITIES
Fixed indexed annuities	$	73,224	68.0	%	$	73,346	64.0	%
Fixed rate annuities	17,802		16.5	%	19,481		17.0	%
Total deferred annuities	91,026		84.5	%	92,827		81.0	%
Pension risk transfer annuities	4,710		4.4	%	8,230		7.2	%
Payout annuities	6,009		5.6	%	6,383		5.6	%
Funding agreements	3,826		3.5	%	5,107		4.4	%
Life and other	2,161		2.0	%	2,105		1.8	%
Total net reserve liabilities	$	107,732	100.0	%	$	114,652	100.0	%



	Quarterly Trends															Δ				Year-to-Date						Δ
	4Q’18			1Q’19			2Q’19			3Q’19			4Q’19			Q/Q		Y/Y		2018			2019			Y/Y
NET RESERVE LIABILITY ROLLFORWARD
Net reserve liabilities – beginning	$	98,553		$	107,732		$	111,791		$	114,680		$	118,825		4	%	21	%	$	75,447		$	107,732		43	%
Gross deposits¹	13,147			4,860			4,153			5,759			3,735			(35	)%	(72	)%	40,587			18,507			(54	)%
Deposits attributable to ACRA noncontrolling interest	—			—			—			—			(544		)	NM		NM		—			(544		)	NM
Net deposits	13,147			4,860			4,153			5,759			3,191			(45	)%	(76	)%	40,587			17,963			(56	)%
Net withdrawals	(3,125		)	(2,780		)	(2,907		)	(2,807		)	(2,497		)	11	%	20	%	(8,859		)	(10,991		)	(24	)%
Sale of ACRA noncontrolling interest to ADIP²	—			—			—			—			(6,141		)	NM		NM		—			(6,141		)	NM
Other reserve changes	(843		)	1,979			1,643			1,193			1,274			7	%	NM		557			6,089			NM
Net reserve liabilities – ending	$	107,732		$	111,791		$	114,680		$	118,825		$	114,652		(4	)%	6	%	$	107,732		$	114,652		6	%

ACRA NONCONTROLLING INTEREST RESERVE LIABILITY ROLLFORWARD³
Reserve liabilities – beginning	$	—		$	—		$	—		$	—		$	—		NM		NM		$	—		$	—		NM
Deposits	—			—			—			—			544			NM		NM		—			544			NM
Withdrawals	—			—			—			—			(169		)	NM		NM		—			(169		)	NM
Sale of ACRA noncontrolling interest to ADIP²	—			—			—			—			6,141			NM		NM		—			6,141			NM
Other reserve changes	—			—			—			—			58			NM		NM		—			58			NM
Reserve liabilities – ending	$	—		$	—		$	—		$	—		$	6,574		NM		NM		$	—		$	6,574		NM

Note: Please refer to Notes to the Financial Supplement section and the Non-GAAP Measure Reconciliations for discussion on net reserve liabilities. Net reserve liabilities include our economic ownership of ACRA investments but do not include the reserve liabilities associated with the noncontrolling interest. 1 Gross deposits equal deposits from our retail, flow reinsurance and institutional channels as well as premiums and deposits for life and products other than deferred annuities or our institutional products, renewal deposits on older blocks of business, annuitizations and foreign currency translation adjustments between the transaction date of large transactions and the translation period. Gross deposits include all deposits sourced by Athene, including all of the deposits reinsured to ACRA. 2 ACRA noncontrolling interest reserve liabilities at inception on October 1, 2019 were $6.1 billion. 3 The ACRA reserve liability rollforward is a rollforward of the GAAP reserve liabilities associated with the noncontrolling interest.



Net Reserve Liabilities & Rollforwards Unaudited (in millions, except percentages)
	Quarterly Trends															Δ				Year-to-Date						Δ
	4Q’18			1Q’19			2Q’19			3Q’19			4Q’19			Q/Q		Y/Y		2018			2019			Y/Y
NET DEFERRED ANNUITY ACCOUNT VALUE ROLLFORWARD¹
Net account value – beginning	$	80,499		$	89,435		$	90,184		$	91,165		$	91,768		1	%	14	%	$	58,539		$	89,435		53	%
Gross deposits²	10,925			2,800			2,976			2,483			2,237			(10	)%	(80	)%	35,474			10,496			(70	)%
Deposits attributable to ACRA noncontrolling interest	—			—			—			—			4			NM		NM		—			4			NM
Net deposits	10,925			2,800			2,976			2,483			2,241			(10	)%	(79	)%	35,474			10,500			(70	)%
Premium and interest bonuses	68			58			68			55			34			(38	)%	(50	)%	265			215			(19	)%
Fixed and index credits to policyholders	559			423			591			560			611			9	%	9	%	2,644			2,185			(17	)%
Surrenders and benefits paid	(2,513		)	(2,431		)	(2,548		)	(2,382		)	(2,091		)	12	%	17	%	(7,129		)	(9,452		)	(33	)%
Sale of ACRA noncontrolling interest to ADIP³	—			—			—			—			(4,450		)	NM		NM		—			(4,450		)	NM
Fee and product charges	(103		)	(101		)	(106		)	(113		)	(113		)	—	%	(10	)%	(358		)	(433		)	(21	)%
Net account value – ending	$	89,435		$	90,184		$	91,165		$	91,768		$	88,000		(4	)%	(2	)%	$	89,435		$	88,000		(2	)%

NET INSTITUTIONAL RESERVE LIABILITY ROLLFORWARD (PENSION RISK TRANSFER AND FUNDING AGREEMENTS)
Net reserve liabilities – beginning	$	6,862		$	8,536		$	10,404		$	11,354		$	14,371		27	%	109	%	$	6,038		$	8,536		41	%
Gross deposits²	2,010			1,922			1,008			3,106			1,314			(58	)%	(35	)%	3,232			7,350			127	%
Deposits attributable to ACRA noncontrolling interest	—			—			—			—			(548		)	NM		NM		—			(548		)	NM
Net deposits	2,010			1,922			1,008			3,106			766			(75	)%	(62	)%	3,232			6,802			110	%
Net withdrawals	(405		)	(143		)	(158		)	(205		)	(204		)	—	%	50	%	(946		)	(710		)	25	%
Sale of ACRA noncontrolling interest to ADIP³	—			—			—			—			(1,698		)	NM		NM		—			(1,698		)	NM
Other reserve changes	69			89			100			116			102			(12	)%	48	%	212			407			92	%
Net reserve liabilities – ending	$	8,536		$	10,404		$	11,354		$	14,371		$	13,337		(7	)%	56	%	$	8,536		$	13,337		56	%

Note: Please refer to Notes to the Financial Supplement section and the Non-GAAP Measure Reconciliations for discussion on net reserve liabilities. Net reserve liabilities include our economic ownership of ACRA investments but do not include the reserve liabilities associated with the noncontrolling interest. 1 The account value rollforwards on deferred annuities include our fixed rate and fixed indexed annuities and are net of ceded reinsurance activity. 2 Gross deposits equal deposits from our retail, flow reinsurance and institutional channels as well as premiums and deposits for life and products other than deferred annuities or our institutional products, renewal deposits on older blocks of business, annuitizations and foreign currency translation adjustments between the transaction date of large transactions and the translation period. Gross deposits include all deposits sourced by Athene, including all of the deposits reinsured to ACRA. 3 ACRA noncontrolling interest reserve liabilities at inception on October 1, 2019 were $6.1 billion.



Deferred Annuity Liability Characteristics Unaudited (in millions, except percentages)
	Surrender charge (gross)		Percent of total		Surrender charge (net of MVA)			Percent of total
SURRENDER CHARGE PERCENTAGES ON DEFERRED ANNUITIES NET ACCOUNT VALUE
No Surrender Charge	$	18,951	21.6	%	$	18,951		21.6	%
0.0% < 2.0%	820		0.9	%	1,870			2.1	%
2.0% < 4.0%	2,840		3.2	%	4,880			5.5	%
4.0% < 6.0%	8,619		9.8	%	11,821			13.4	%
6.0% or greater	56,770		64.5	%	50,478			57.4	%
	$	88,000	100.0	%	$	88,000		100.0	%

			Surrender charge (gross)		MVA benefit			Surrender charge (net)
Aggregate surrender charge protection			6.3	%	0.1		%	6.4	%



	Deferred annuities		Percent of total		Average surrender charge (gross)
YEARS OF SURRENDER CHARGE REMAINING ON DEFERRED ANNUITIES NET ACCOUNT VALUE
No Surrender Charge	$	18,951	21.6	%	—	%
Less than 2	15,791		17.9	%	5.3	%
2 to less than 4	16,634		18.9	%	6.8	%
4 to less than 6	11,322		12.9	%	8.2	%
6 to less than 8	10,683		12.1	%	9.5	%
8 to less than 10	10,935		12.4	%	10.3	%
10 or greater	3,684		4.2	%	14.2	%
	$	88,000	100.0	%



	At minimum guarantees		Total account value		Percent of total account value at minimum guarantees
MINIMUM GUARANTEES ON DEFERRED ANNUITIES
Fixed indexed annuities	$	14,986	$	68,800	22	%
Fixed rate annuities	7,807		19,200		41	%
Total net deferred annuities	$	22,793	$	88,000	26	%

					December 31, 2019
Distance to guarantees¹					100 – 110

1 The distance to guarantee reflects the average distance in option costs between the current and guaranteed rates for indexed strategies and between current and guaranteed fixed rates for fixed strategies. The option costs used reflects an estimate of option cost in the market.



	December 31, 2018			December 31, 2019			Δ
DEFERRED ANNUITY RIDER RESERVE SUMMARY
Net rider reserve	$	3,025		$	4,091		35	%
Net account value with rider reserves	36,445			37,377			3	%
Rider reserve as a percentage of account value with rider reserves	8.3		%	10.9		%	260bps



Capitalization & Regulatory Capital Ratios Unaudited (in millions, except percentages)
	Quarterly Trends															Δ
	4Q’18			1Q’19			2Q’19			3Q’19			4Q’19			Q/Q		Y/Y
CAPITALIZATION
Total debt	$	991		$	991		$	991		$	992		$	1,467		48	%	48	%
Total AHL shareholders’ equity	8,276			10,117			12,365			13,545			13,391			(1	)%	62	%
Total capitalization	9,267			11,108			13,356			14,537			14,858			2	%	60	%
Less: Accumulated other comprehensive income (loss) (AOCI)	(472		)	706			1,760			2,442			2,281			(7	)%	NM
Less: Accumulated change in fair value of reinsurance assets	(75		)	309			639			727			493			(32	)%	NM
Total adjusted capitalization	$	9,814		$	10,093		$	10,957		$	11,368		$	12,084		6	%	23	%

EQUITY
Total AHL shareholders’ equity	$	8,276		$	10,117		$	12,365		$	13,545		$	13,391		(1	)%	62	%
Less: Preferred stock	—			—			839			1,172			1,172			—	%	NM
Total AHL common shareholders’ equity	8,276			10,117			11,526			12,373			12,219			(1	)%	48	%
Less: AOCI	(472		)	706			1,760			2,442			2,281			(7	)%	NM
Less: Accumulated change in fair value of reinsurance assets	(75		)	309			639			727			493			(32	)%	NM
Total adjusted AHL common shareholders’ equity	$	8,823		$	9,102		$	9,127		$	9,204		$	9,445		3	%	7	%

EQUITY BY SEGMENT
Retirement Services	$	7,807		$	8,201		$	7,704		$	7,494		$	7,443		(1	)%	(5	)%
Corporate and Other	1,016			901			1,423			1,710			2,002			17	%	97	%
Total adjusted AHL common shareholders’ equity	$	8,823		$	9,102		$	9,127		$	9,204		$	9,445		3	%	7	%

FINANCIAL LEVERAGE
Debt to capital ratio	10.7		%	8.9		%	7.4		%	6.8		%	9.9		%	NM		(80)bps
AOCI	(0.5		)%	0.6		%	1.2		%	1.5		%	1.8		%	30bps		NM
Accumulated change in fair value of reinsurance assets	(0.1		)%	0.3		%	0.4		%	0.4		%	0.4		%	0bps		NM
Adjusted debt to capital ratio	10.1		%	9.8		%	9.0		%	8.7		%	12.1		%	NM		200bps



	December 31, 2018		December 31, 2019		Δ
REGULATORY CAPITAL RATIOS
U.S. RBC ratio – Athene Annuity & Life Assurance Company	421	%	429	%	NM
BSCR – Athene Life Re Ltd.	340	%	310	%	NM
Athene Life Re Ltd. RBC ratio¹	405	%	443	%	NM

1 ALRe RBC ratio, which is used in evaluating our capital position and the amount of capital needed to support our segment, is calculated by applying the NAIC RBC factors to the statutory financial statements of AHL's non-U.S. reinsurance subsidiaries, on an aggregate basis.



Financial Strength, Credit Ratings & Share Data Unaudited (in millions, except percentages)
	A.M. Best	Standard & Poor’s	Fitch
FINANCIAL STRENGTH RATINGS
Athene Annuity & Life Assurance Company	A	A	A
Athene Annuity and Life Company	A	A	A
Athene Annuity & Life Assurance Company of New York	A	A	A
Athene Life Insurance Company of New York	A	Not Rated	Not Rated
Athene Life Re Ltd.	A	A	A
Athene Life Re International Ltd.	A	A	A
Athene Co-Invest Reinsurance Affiliate 1A Ltd. and Athene Co-Invest Reinsurance Affiliate 1B Ltd.	A	A	A
Athene Co-Invest Reinsurance Affiliate International Ltd.	A	A	A

CREDIT RATINGS
Athene Holding Ltd.	bbb	BBB+	BBB+
Senior notes	bbb	BBB+	BBB



	Quarterly Trends					Δ				Year-to-Date		Δ
	4Q’18	1Q’19	2Q’19	3Q’19	4Q’19	Q/Q		Y/Y		2018	2019	Y/Y
SHARE DATA
Weighted average common shares outstanding – basic¹	197.1	194.0	191.2	184.3	177.3	(4	)%	(10	)%	197.1	186.6	(5	)%
Weighted average shares outstanding – diluted – Class A common shares²	164.2	161.7	158.8	152.0	145.1	(5	)%	(12	)%	161.1	154.3	(4	)%
Weighted average common shares outstanding – adjusted operating³	195.5	192.2	189.4	182.3	175.7	(4	)%	(10	)%	195.9	184.8	(6	)%
Common shares outstanding⁴	195.0	194.1	185.4	182.5	175.7	(4	)%	(10	)%	195.0	175.7	(10	)%
Adjusted operating common shares outstanding³	193.5	192.4	184.4	181.4	174.9	(4	)%	(10	)%	193.5	174.9	(10	)%

1 Basic earnings per common share, including basic weighted average common shares outstanding, includes all classes eligible to participate in dividends for each period presented. 2 Diluted earnings per common share on a GAAP basis for Class A common shares, including diluted Class A weighted average common shares outstanding, includes the dilutive impacts, if any, of Class B common shares, Class M common shares and any other stock-based awards. 3 Represents Class A common shares outstanding or weighted average common shares outstanding assuming conversion or settlement of all outstanding items that are able to be converted to or settled in Class A common shares, including the impacts of Class B common shares, Class M common shares and any other stock-based awards, but excluding any awards for which the exercise or conversion price exceeds the market value of our Class A common shares on the applicable measurement date. 4 Represents common shares vested and outstanding for all classes eligible to participate in dividends for each period presented.



Notes to the Financial Supplement

KEY OPERATING AND NON-GAAP MEASURES

In addition to our results presented in accordance with GAAP, we present certain financial information that includes non-GAAP measures. Management believes the use of these non-GAAP measures, together with the relevant GAAP measures, provides information that may enhance an investor’s understanding of our results of operations and the underlying profitability drivers of our business. The majority of these non-GAAP measures are intended to remove from the results of operations the impact of market volatility (other than with respect to alternative investments) as well as integration, restructuring and certain other expenses which are not part of our underlying profitability drivers, as such items fluctuate from period to period in a manner inconsistent with these drivers. These measures should be considered supplementary to our results in accordance with GAAP and should not be viewed as a substitute for the corresponding GAAP measures.

ADJUSTED OPERATING INCOME AVAILABLE TO COMMON SHAREHOLDERS AND ADJUSTED OPERATING RETURN ON ASSETS (ROA)

Adjusted operating income available to common shareholders is a non-GAAP measure used to evaluate our financial performance excluding market volatility and expenses related to integration, restructuring, stock compensation and other expenses. Our adjusted operating income available to common shareholders equals net income available to AHL common shareholders adjusted to eliminate the impact of the following (collectively, the non-operating adjustments):

•

Investment Gains (Losses), Net of Offsets—Consists of the realized gains and losses on the sale of AFS securities, the change in fair value of reinsurance assets, unrealized gains and losses, impairments, and other investment gains and losses. Unrealized, impairments and other investment gains and losses are comprised of the fair value adjustments of trading securities (other than CLOs) and investments held under the fair value option, derivative gains and losses not hedging FIA index credits, and the net other-than-temporary impairment (OTTI) impacts recognized in operations net of the change in AmerUs Closed Block fair value reserve related to the corresponding change in fair value of investments and the change in unit-linked reserves related to the corresponding trading securities. Investment gains and losses are net of offsets related to DAC, DSI, and VOBA amortization and changes to guaranteed lifetime withdrawal benefit (GLWB) and guaranteed minimum death benefit (GMDB) reserves (together, GLWB and GMDB reserves represent rider reserves) as well as the MVAs associated with surrenders or terminations of contracts.

•

Change in Fair Values of Derivatives and Embedded Derivatives – FIAs, Net of Offsets—Consists of impacts related to the fair value accounting for derivatives hedging the FIA index credits and the related embedded derivative liability fluctuations from period to period. The index reserve is measured at fair value for the current period and all periods beyond the current policyholder index term. However, the FIA hedging derivatives are purchased to hedge only the current index period. Upon policyholder renewal at the end of the period, new FIA hedging derivatives are purchased to align with the new term. The difference in duration between the FIA hedging derivatives and the index credit reserves creates a timing difference in earnings. This timing difference of the FIA hedging derivatives and index credit reserves is included as a non-operating adjustment, net of offsets related to DAC, DSI, and VOBA amortization and changes to rider reserves. We primarily hedge with options that align with the index terms of our FIA products (typically 1–2 years). From an economic basis, we believe this is suitable because policyholder accounts are credited with index performance at the end of each index term. However, because the term of an embedded derivative in an FIA contract is longer-dated, there is a duration mismatch which may lead to mismatches for accounting purposes.


•	Integration, Restructuring, and Other Non-operating Expenses—Consists of restructuring and integration expenses related to acquisitions and block reinsurance costs as well as certain other expenses, which are not predictable or related to our underlying profitability drivers.


•	Stock Compensation Expense—Consists of stock compensation expenses associated with our share incentive plans, excluding our long-term incentive plan, which are not related to our underlying profitability drivers and fluctuate from time to time due to the structure of our plans.


•	Bargain Purchase Gain—Consists of adjustments to net income available to AHL common shareholders as they are not related to our underlying profitability drivers.


•	Income Tax (Expense) Benefit – Non-operating—Consists of the income tax effect of non-operating adjustments and is computed by applying the appropriate jurisdiction’s tax rate to the non-operating adjustments that are subject to income tax.

We consider these non-operating adjustments to be meaningful adjustments to net income available to AHL common shareholders for the reasons discussed in greater detail above. Accordingly, we believe using a measure which excludes the impact of these items is useful in analyzing our business performance and the trends in our results of operations. Together with net income available to AHL common shareholders, we believe adjusted operating income available to common shareholders provides a meaningful financial metric that helps investors understand our underlying results and profitability. Adjusted operating income available to common shareholders should not be used as a substitute for net income available to AHL common shareholders.

Adjusted operating ROA is a non-GAAP measure used to evaluate our financial performance and profitability. Adjusted operating ROA is computed using our adjusted operating income available to common shareholders divided by average net invested assets for the relevant period. To enhance the ability to analyze these measures across periods, interim periods are annualized. While we believe each of these metrics are meaningful financial metrics and enhance our understanding of the underlying profitability drivers of our business, they should not be used as a substitute for ROA presented under GAAP.

ADJUSTED OPERATING ROE

Adjusted operating ROE is a non-GAAP measure used to evaluate our financial performance excluding the impacts of AOCI and the cumulative change in fair value of funds withheld and modco reinsurance assets, net of DAC, DSI, rider reserve and tax offsets. Adjusted AHL common shareholders’ equity is calculated as the ending AHL shareholders’ equity excluding AOCI, the cumulative change in fair value of funds withheld and modco reinsurance assets and preferred stock. Adjusted operating ROE is calculated as the adjusted operating income available to common shareholders, divided by average adjusted AHL common shareholders’ equity. These adjustments fluctuate period to period in a manner inconsistent with our underlying profitability drivers as the majority of such fluctuation is related to the market volatility of the unrealized gains and losses associated with our AFS securities. Except with respect to reinvestment activity relating to acquired blocks of businesses, we typically buy and hold AFS investments to maturity throughout the duration of market fluctuations, therefore, the period-over-period impacts in unrealized gains and losses are not necessarily indicative of current operating fundamentals or future performance. Accordingly, we believe using measures which exclude AOCI and the cumulative change in fair value of funds withheld and modco reinsurance assets are useful in analyzing trends in our operating results. To enhance the ability to analyze these measures across periods, interim periods are annualized. Adjusted operating ROE should not be used as a substitute for ROE. However, we believe the adjustments to net income available to AHL common shareholders and equity are significant to gaining an understanding of our overall financial performance.

ADJUSTED OPERATING EARNINGS PER COMMON SHARE, WEIGHTED AVERAGE COMMON SHARES OUTSTANDING – ADJUSTED OPERATING, AND ADJUSTED BOOK VALUE PER COMMON SHARE

Adjusted operating earnings per common share, weighted average common shares outstanding – adjusted operating and adjusted book value per common share are non-GAAP measures used to evaluate our financial performance and financial condition. The non-GAAP measures adjust the number of shares included in the corresponding GAAP measures to reflect the conversion or settlement of all shares and other stock-based awards outstanding. We believe using these measures represents an economic view of our share counts and provides a simplified and consistent view of our outstanding shares. Adjusted operating earnings per common share is calculated as the adjusted operating income available to common shareholders, over the weighted average common shares outstanding – adjusted operating. Adjusted book value per common share is calculated as the adjusted AHL common shareholders’ equity divided by the adjusted operating common shares outstanding. Our Class B common shares are economically equivalent to Class A common shares and can be converted to Class A common shares on a one-for-one basis at any time. Our Class M common shares are in the legal form of shares but economically function as options as they are convertible into Class A shares after vesting and payment of the conversion price. In calculating Class A diluted earnings per share on a GAAP basis, we are required to apply sequencing rules to determine the dilutive impacts, if any, of our Class B common shares, Class M common shares and any other stock-based awards. To the extent our Class B common shares, Class M common shares and/or any other stock-based awards are not dilutive, after considering the dilutive effects of the more dilutive securities in the sequence, they are excluded. Weighted average common shares outstanding – adjusted operating and adjusted operating common shares outstanding assume conversion or settlement of all outstanding items that are able to be converted to or settled in Class A common shares, including the impacts of Class B common shares on a one-for-one basis, the impacts of all Class M common shares net of the conversion price and any other stock-based awards, but excluding any awards for which the exercise or conversion price exceeds the market value of our Class A common shares on the applicable measurement date. For certain historical periods, Class M shares were not included due to issuance restrictions which were contingent upon our IPO. Adjusted operating earnings per common share, weighted average common shares outstanding – adjusted operating and adjusted book value per common share should not be used as a substitute for basic earnings per share – Class A common shares, basic weighted average common shares outstanding – Class A or book value per common share. However, we believe the adjustments to the shares and equity are significant to gaining an understanding of our overall results of operations and financial condition.



Notes to the Financial Supplement

ADJUSTED DEBT TO CAPITAL RATIO

Adjusted debt to capital ratio is a non-GAAP measure used to evaluate our capital structure excluding the impacts of AOCI and the cumulative change in fair value of funds withheld and modco reinsurance assets, net of DAC, DSI, rider reserve and tax offsets. Adjusted debt to capital ratio is calculated as total debt excluding debt of consolidated variable interest entities (VIEs) divided by adjusted AHL shareholders’ equity. Adjusted debt to capital ratio should not be used as a substitute for the debt to capital ratio. However, we believe the adjustments to total debt and shareholders’ equity are significant to gaining an understanding of our capitalization, debt utilization and debt capacity.

RETIREMENT SERVICES NET INVESTMENT SPREAD, INVESTMENT MARGIN ON DEFERRED ANNUITIES, AND OPERATING EXPENSES

Net investment spread is a key measurement of the profitability of our Retirement Services segment. Net investment spread measures our investment performance less the total cost of our liabilities. Net investment earned rate is a key measure of our investment performance, while cost of funds is a key measure of the cost of our policyholder benefits and liabilities. Investment margin on our deferred annuities measures our investment performance less the cost of crediting for our deferred annuities, which make up a significant portion of our reserve liabilities.

•

Net investment earned rate is a non-GAAP measure we use to evaluate the performance of our net invested assets that does not correspond to GAAP net investment income. Net investment earned rate is computed as the income from our net invested assets divided by the average net invested assets for the relevant period. To enhance the ability to analyze these measures across periods, interim periods are annualized. The adjustments to arrive at our net investment earned rate add alternative investment gains and losses, gains and losses related to trading securities for CLOs, net VIE impacts (revenues, expenses and noncontrolling interest) and the change in fair value of reinsurance assets. We include the income and assets supporting our change in fair value of reinsurance assets by evaluating the underlying investments of the funds withheld at interest receivables and we include the net investment income from those underlying investments which does not correspond to the GAAP presentation of change in fair value of reinsurance assets. We exclude the income and assets supporting business that we have exited through ceded reinsurance including funds withheld agreements. We believe the adjustments for reinsurance provide a net investment earned rate on the assets for which we have economic exposure.


•	Cost of funds includes liability costs related to cost of crediting on both deferred annuities and institutional products as well as other liability costs. Cost of funds is computed as the total liability costs divided by the average net invested assets for the relevant period. To enhance the ability to analyze these measures across periods, interim periods are annualized.

◦

Cost of crediting includes the costs for both deferred annuities and institutional products. Cost of crediting on deferred annuities is the interest credited to the policyholders on our fixed strategies as well as the option costs on the indexed annuity strategies. With respect to FIAs, the cost of providing index credits includes the expenses incurred to fund the annual index credits, and where applicable, minimum guaranteed interest credited. Cost of crediting on institutional products is comprised of PRT costs including interest credited, benefit payments and other reserve changes, net of premiums received when issued, as well as funding agreement costs including the interest payments and other reserve changes. Cost of crediting is computed as the cost of crediting for deferred annuities and institutional products divided by the average net invested assets for the relevant periods. Cost of crediting on deferred annuities is computed as the net interest credited on fixed strategies and option costs on indexed annuity strategies divided by the average net account value of our deferred annuities. Cost of crediting on institutional products is computed as the PRT and funding agreement costs divided by the average net institutional reserve liabilities. Our average net invested assets, net account values and net institutional reserve liabilities are averaged over the number of quarters in the relevant period to obtain our associated cost of crediting for such period. To enhance the ability to analyze these measures across periods, interim periods are annualized.

◦

Other liability costs include DAC, DSI and VOBA amortization, change in rider reserves, the cost of liabilities on products other than deferred annuities and institutional products, excise taxes, premiums, product charges and other revenues. We believe a measure like other liability costs is useful in analyzing the trends of our core business operations and profitability. While we believe other liability costs is a meaningful financial metric and enhances our understanding of the underlying profitability drivers of our business, it should not be used as a substitute for total benefits and expenses presented under GAAP.

•

Net investment earned rate, cost of funds, net investment spread and investment margin on deferred annuities are non-GAAP measures we use to evaluate the profitability of our business. We believe these metrics are useful in analyzing the trends of our business operations, profitability and pricing discipline. While we believe each of these metrics are meaningful financial metrics and enhance our understanding of the underlying profitability drivers of our business, they should not be used as a substitute for net investment income, interest sensitive contract benefits or total benefits and expenses presented under GAAP.

•

Operating expenses excludes integration, restructuring and other non-operating expenses, stock compensation expense, interest expense and policy acquisition expenses. We believe a measure like operating expenses is useful in analyzing the trends of our core business operations and profitability. While we believe operating expenses is a meaningful financial metric and enhances our understanding of the underlying profitability drivers of our business, it should not be used as a substitute for policy and other operating expenses presented under GAAP.

NET INVESTED ASSETS

In managing our business, we analyze net invested assets, which does not correspond to total investments, including investments in related parties, as disclosed in our consolidated financial statements and notes thereto. Net invested assets represents the investments that directly back our net reserve liabilities as well as surplus assets. Net invested assets is used in the computation of net investment earned rate, which allows us to analyze the profitability of our investment portfolio. Net invested assets includes (a) total investments on the consolidated balance sheets with AFS securities at cost or amortized cost, excluding derivatives, (b) cash and cash equivalents and restricted cash, (c) investments in related parties, (d) accrued investment income, (e) the consolidated VIE assets, liabilities and noncontrolling interest, (f) net investment payables and receivables and (g) policy loans ceded (which offset the direct policy loans in total investments). Net invested assets also excludes assets associated with funds withheld liabilities related to business exited through reinsurance agreements and derivative collateral (offsetting the related cash positions). We include the underlying investments supporting our assumed funds withheld and modco agreements in our net invested assets calculation in order to match the assets with the income received. We believe the adjustments for reinsurance provide a view of the assets for which we have economic exposure. Net invested assets includes our proportionate share of ACRA investments, based on our economic ownership, but does not include the proportionate share of investments associated with the noncontrolling interest. Our net invested assets are averaged over the number of quarters in the relevant period to compute our net investment earned rate for such period. While we believe net invested assets is a meaningful financial metric and enhances our understanding of the underlying drivers of our investment portfolio, it should not be used as a substitute for total investments, including related parties, presented under GAAP.

NET RESERVE LIABILITIES

In managing our business, we also analyze net reserve liabilities, which does not correspond to total liabilities as disclosed in our consolidated financial statements and notes thereto. Net reserve liabilities represent our policyholder liability obligations net of reinsurance and is used to analyze the costs of our liabilities. Net reserve liabilities include (a) the interest sensitive contract liabilities, (b) future policy benefits, (c) dividends payable to policyholders, and (d) other policy claims and benefits, offset by reinsurance recoverable, excluding policy loans ceded. Net reserve liabilities include our proportionate share of ACRA reserve liabilities, based on our economic ownership, but does not include the proportionate share of reserve liabilities associated with the noncontrolling interest. Net reserve liabilities is net of the ceded liabilities to third-party reinsurers as the costs of the liabilities are passed to such reinsurers and, therefore, we have no net economic exposure to such liabilities, assuming our reinsurance counterparties perform under our agreements. The majority of our ceded reinsurance is a result of reinsuring large blocks of life business following acquisitions. For such transactions, GAAP requires the ceded liabilities and related reinsurance recoverables to continue to be recorded in our consolidated financial statements despite the transfer of economic risk to the counterparty in connection with the reinsurance transaction. While we believe net reserve liabilities is a meaningful financial metric and enhances our understanding of the underlying profitability drivers of our business, it should not be used as a substitute for total liabilities presented under GAAP.

SALES

Sales statistics do not correspond to revenues under GAAP but are used as relevant measures to understand our business performance as it relates to deposits generated during a specific period of time. Our sales statistics include deposits for fixed rate annuities and FIAs and align with the LIMRA definition of all money paid into an individual annuity, including money paid into new contracts with initial purchase occurring in the specified period and existing contracts with initial purchase occurring prior to the specified period (excluding internal transfers). While we believe sales is a meaningful metric and enhances our understanding of our business performance, it should not be used as a substitute for premiums presented under GAAP.



Non-GAAP Reconciliations Unaudited (in millions, except per share data)
	Quarterly Trends															Year-to-Date
	4Q’18			1Q’19			2Q’19			3Q’19			4Q’19			2018		2019
RECONCILIATION OF BOOK VALUE PER COMMON SHARE TO ADJUSTED BOOK VALUE PER COMMON SHARE
Book value per common share	$	42.45		$	52.12		$	66.69		$	74.20		$	76.21
Preferred stock	—			—			(4.53		)	(6.42		)	(6.67		)
AOCI	2.42			(3.64		)	(9.49		)	(13.38		)	(12.98		)
Accumulated change in fair value of reinsurance assets	0.39			(1.59		)	(3.45		)	(3.98		)	(2.80		)
Effect of items convertible to or settled in Class A common shares	0.33			0.41			0.28			0.32			0.26
Adjusted book value per common share	$	45.59		$	47.30		$	49.50		$	50.74		$	54.02

RECONCILIATION OF AVERAGE AHL SHAREHOLDERS’ EQUITY TO AVERAGE ADJUSTED AHL COMMON SHAREHOLDERS’ EQUITY
Average AHL shareholders’ equity	$	8,627		$	9,197		$	11,241		$	12,955		$	13,468		$	8,726	$	10,834
Less: Average preferred stock	—			—			420			1,006			1,172			—		586
Less: Average AOCI	(220		)	117			1,233			2,101			2,362			489		905
Less: Average accumulated change in fair value of reinsurance assets	(53		)	117			474			683			610			43		209
Average adjusted AHL common shareholders’ equity	$	8,900		$	8,963		$	9,114		$	9,165		$	9,324		$	8,194	$	9,134

Retirement Services	$	7,416		$	8,004		$	7,952		$	7,598		$	7,468		$	6,522	$	7,625
Corporate and Other	1,484			959			1,162			1,567			1,856			1,672		1,509
Average adjusted AHL common shareholders’ equity	$	8,900		$	8,963		$	9,114		$	9,165		$	9,324		$	8,194	$	9,134

RECONCILIATION OF BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING – CLASS A TO WEIGHTED AVERAGE COMMON SHARES OUTSTANDING – ADJUSTED OPERATING
Basic weighted average common shares outstanding – Class A	164.2			161.3			158.5			151.6			144.5			160.5		153.9
Conversion of Class B common shares to Class A common shares	25.5			25.4			25.4			25.4			25.4			29.3		25.4
Conversion of Class M common shares to Class A common shares	5.2			5.1			5.1			4.9			5.2			5.6		5.1
Effect of other stock compensation plans	0.6			0.4			0.4			0.4			0.6			0.5		0.4
Weighted average common shares outstanding – adjusted operating	195.5			192.2			189.4			182.3			175.7			195.9		184.8

RECONCILIATION OF CLASS A COMMON SHARES OUTSTANDING TO ADJUSTED OPERATING COMMON SHARES OUTSTANDING
Class A common shares outstanding	162.2			161.3			152.6			149.8			142.8
Conversion of Class B common shares to Class A common shares	25.4			25.4			25.4			25.4			25.4
Conversion of Class M common shares to Class A common shares	4.9			5.0			5.3			5.1			5.5
Effect of other stock compensation plans	1.0			0.7			1.1			1.1			1.2
Adjusted operating common shares outstanding	193.5			192.4			184.4			181.4			174.9



Non-GAAP Reconciliations Unaudited (in millions, except percentages)
	Quarterly Trends															Year-to-Date
	4Q’18			1Q’19			2Q’19			3Q’19			4Q’19			2018			2019
RECONCILIATION OF NET INVESTMENT INCOME TO NET INVESTMENT EARNINGS
GAAP net investment income	$	1,121		$	1,066		$	1,161		$	1,070		$	1,225		$	4,004		$	4,522
Change in fair value of reinsurance assets	132			132			161			199			188			301			680
Net VIE earnings	(18		)	21			24			23			12			37			80
Alternative income gain (loss)	(20		)	(5		)	12			6			(12		)	(34		)	1
ACRA noncontrolling interest	—			—			—			—			(61		)	—			(61		)
Held for trading amortization and other	(11		)	(11		)	(13		)	(6		)	(13		)	(76		)	(43		)
Total adjustments to arrive at net investment earnings	83			137			184			222			114			228			657
Total net investment earnings	$	1,204		$	1,203		$	1,345		$	1,292		$	1,339		$	4,232		$	5,179

Retirement Services	$	1,231		$	1,171		$	1,321		$	1,264		$	1,306		$	4,188		$	5,062
Corporate and Other	(27		)	32			24			28			33			44			117
Total net investment earnings	$	1,204		$	1,203		$	1,345		$	1,292		$	1,339		$	4,232		$	5,179

RECONCILIATION OF NET INVESTMENT INCOME RATE TO NET INVESTMENT EARNED RATE
GAAP net investment income rate	4.10		%	3.79		%	4.03		%	3.60		%	4.22		%	4.30		%	3.91		%
Change in fair value of reinsurance assets	0.48		%	0.47		%	0.56		%	0.67		%	0.65		%	0.32		%	0.59		%
Net VIE earnings	(0.07		)%	0.08		%	0.09		%	0.08		%	0.04		%	0.04		%	0.07		%
Alternative income gain (loss)	(0.07		)%	(0.02		)%	0.04		%	0.02		%	(0.04		)%	(0.04		)%	—		%
ACRA noncontrolling interest	—		%	—		%	—		%	—		%	(0.21		)%	—		%	(0.05		)%
Held for trading amortization and other	(0.04		)%	(0.04		)%	(0.05		)%	(0.02		)%	(0.04		)%	(0.08		)%	(0.04		)%
Total adjustments to arrive at net investment earned rate	0.30		%	0.49		%	0.64		%	0.75		%	0.40		%	0.24		%	0.57		%
Consolidated net investment earned rate	4.40		%	4.28		%	4.67		%	4.35		%	4.62		%	4.54		%	4.48		%

Retirement Services	4.57		%	4.21		%	4.63		%	4.31		%	4.57		%	4.60		%	4.43		%
Corporate and Other	(7.57		)%	13.19		%	8.39		%	7.28		%	7.16		%	1.99		%	8.33		%
Consolidated net investment earned rate	4.40		%	4.28		%	4.67		%	4.35		%	4.62		%	4.54		%	4.48		%

Retirement Services	$	107,939		$	111,443		$	114,059		$	117,338		$	114,149		$	90,995		$	114,310
Corporate and Other	1,484			959			1,162			1,567			1,837			2,182			1,409
Consolidated average net invested assets	$	109,423		$	112,402		$	115,221		$	118,905		$	115,986		$	93,177		$	115,719



Non-GAAP Reconciliations Unaudited (in millions, except percentages)
	Quarterly Trends															Year-to-Date
	4Q’18			1Q’19			2Q’19			3Q’19			4Q’19			2018			2019
RECONCILIATION OF INTEREST SENSITIVE CONTRACT BENEFITS TO COST OF CREDITING
GAAP interest sensitive contract benefits	$	(825	)	$	1,516		$	1,094		$	801		$	1,146		$	290		$	4,557
Interest credited other than deferred annuities and institutional products	35			55			50			63			64			65			232
FIA option costs	275			278			280			282			269			886			1,109
Product charges (strategy fees)	(28		)	(28		)	(29		)	(31		)	(31		)	(98		)	(119		)
Reinsurance embedded derivative impacts	14			15			14			14			14			49			57
Change in fair values of embedded derivatives – FIAs	1,039			(1,311		)	(868		)	(560		)	(905		)	436			(3,644		)
Negative VOBA amortization	9			12			7			9			8			31			36
ACRA noncontrolling interest	—			—			—			—			(42		)	—			(42		)
Other changes in interest sensitive contract liabilities	(3		)	(2		)	(1		)	(2		)	(2		)	—			(7		)
Total adjustments to arrive at cost of crediting	1,341			(981		)	(547		)	(225		)	(625		)	1,369			(2,378		)
Retirement Services cost of crediting	$	516		$	535		$	547		$	576		$	521		$	1,659		$	2,179

GAAP interest sensitive contract benefits	(3.06		)%	5.44		%	3.84		%	2.73		%	4.02		%	0.32		%	3.99		%
Interest credited other than deferred annuities and institutional products	0.13		%	0.20		%	0.18		%	0.21		%	0.23		%	0.07		%	0.20		%
FIA option costs	1.02		%	1.00		%	0.98		%	0.96		%	0.94		%	0.97		%	0.97		%
Product charges (strategy fees)	(0.10		)%	(0.10		)%	(0.10		)%	(0.10		)%	(0.11		)%	(0.11		)%	(0.10		)%
Reinsurance embedded derivative impacts	0.05		%	0.05		%	0.05		%	0.05		%	0.05		%	0.05		%	0.05		%
Change in fair values of embedded derivatives – FIAs	3.85		%	(4.70		)%	(3.05		)%	(1.91		)%	(3.17		)%	0.48		%	(3.19		)%
Negative VOBA amortization	0.03		%	0.04		%	0.02		%	0.03		%	0.03		%	0.04		%	0.03		%
ACRA noncontrolling interest	—		%	—		%	—		%	—		%	(0.15		)%	—		%	(0.03		)%
Other changes in interest sensitive contract liabilities	(0.01		)%	(0.01		)%	—		%	(0.01		)%	(0.01		)%	—		%	(0.01		)%
Total adjustments to arrive at cost of crediting	4.97		%	(3.52		)%	(1.92		)%	(0.77		)%	(2.19		)%	1.50		%	(2.08		)%
Retirement Services cost of crediting	1.91		%	1.92		%	1.92		%	1.96		%	1.83		%	1.82		%	1.91		%

Retirement Services cost of crediting on deferred annuities	2.00		%	1.98		%	1.98		%	1.98		%	1.95		%	1.95		%	1.97		%
Retirement Services cost of crediting on institutional products	3.74		%	3.69		%	3.76		%	3.68		%	2.85		%	3.42		%	3.47		%
Retirement Services cost of crediting	1.91		%	1.92		%	1.92		%	1.96		%	1.83		%	1.82		%	1.91		%

Retirement Services average net invested assets	$	107,939		$	111,443		$	114,059		$	117,338		$	114,149		$	90,995		$	114,310
Average net account value on deferred annuities	88,874			89,809			90,675			91,467			87,660			73,567			89,878
Average institutional net reserve liabilities	7,827			9,809			10,470			13,320			12,931			6,683			11,632



Non-GAAP Reconciliations Unaudited (in millions)
	Quarterly Trends															Year-to-Date
	4Q’18			1Q’19			2Q’19			3Q’19			4Q’19			2018			2019
RECONCILIATION OF BENEFITS AND EXPENSES TO OTHER LIABILITY COSTS
GAAP benefits and expenses	$	1,325		$	4,255		$	2,673		$	4,305		$	2,723		$	5,462		$	13,956
Premiums	(1,857		)	(2,000		)	(787		)	(2,688		)	(907		)	(3,462		)	(6,382		)
Product charges	(128		)	(125		)	(132		)	(135		)	(132		)	(449		)	(524		)
Other revenues	(4		)	(12		)	(9		)	(6		)	(10		)	(26		)	(37		)
Cost of crediting	(227		)	(242		)	(253		)	(280		)	(238		)	(724		)	(1,013		)
Change in fair value of embedded derivatives - FIA, net of offsets	1,266			(1,260		)	(817		)	(497		)	(1,003		)	327			(3,577		)
DAC, DSI and VOBA amortization related to investment gains and losses	36			(173		)	(181		)	(151		)	28			110			(477		)
Rider reserves	8			(28		)	(24		)	(9		)	3			16			(58		)
Policy and other operating expenses, excluding policy acquisition expenses	(102		)	(103		)	(117		)	(130		)	(138		)	(395		)	(488		)
AmerUs closed block fair value liability	14			(53		)	(59		)	(46		)	6			112			(152		)
ACRA noncontrolling interest	—			—			—			—			(74		)	—			(74		)
Other	1			1			1			(5		)	1			10			(2		)
Total adjustments to arrive at other liability costs	(993		)	(3,995		)	(2,378		)	(3,947		)	(2,464		)	(4,481		)	(12,784		)
Other liability costs	$	332		$	260		$	295		$	358		$	259		$	981		$	1,172

Retirement Services	$	332		$	260		$	295		$	358		$	259		$	981		$	1,172
Corporate and Other	—			—			—			—			—			—			—
Consolidated other liability costs	$	332		$	260		$	295		$	358		$	259		$	981		$	1,172

RECONCILIATION OF POLICY AND OTHER OPERATING EXPENSES TO OPERATING EXPENSES
Policy and other operating expenses	$	172		$	165		$	185		$	194		$	200		$	626		$	744
Interest expense	(13		)	(17		)	(15		)	(15		)	(20		)	(57		)	(67		)
Policy acquisition expenses, net of deferrals	(70		)	(62		)	(69		)	(63		)	(62		)	(233		)	(256		)
Integration, restructuring and other non-operating expenses	(4		)	(1		)	(11		)	(34		)	(24		)	(22		)	(70		)
Stock compensation expenses	(3		)	(3		)	(3		)	(3		)	(3		)	(11		)	(12		)
ACRA noncontrolling interest	—			—			—			—			(5		)	—			(5		)
Total adjustments to arrive at operating expenses	(90		)	(83		)	(98		)	(115		)	(114		)	(323		)	(410		)
Operating expenses	$	82		$	82		$	87		$	79		$	86		$	303		$	334

Retirement Services	$	65		$	62		$	68		$	67		$	69		$	242		$	266
Corporate and Other	17			20			19			12			17			61			68
Consolidated operating expenses	$	82		$	82		$	87		$	79		$	86		$	303		$	334



Non-GAAP Reconciliations Unaudited (in millions)
	December 31, 2018			December 31, 2019
RECONCILIATION OF TOTAL INVESTMENTS INCLUDING RELATED PARTIES TO NET INVESTED ASSETS
Total investments including related parties	$	107,632		$	129,845
Derivative assets	(1,043		)	(2,888		)
Cash and cash equivalents (including restricted cash)	3,403			4,639
Accrued investment income	682			807
Payables for collateral on derivatives	(969		)	(2,743		)
Reinsurance funds withheld and modified coinsurance	223			(1,440		)
VIE and VOE assets, liabilities and noncontrolling interest	718			730
Unrealized (gains) losses	808			(4,095		)
Ceded policy loans	(281		)	(235		)
Net investment receivables (payables)	(139		)	(57		)
ACRA noncontrolling interest	—			(7,077		)
Total adjustments to arrive at net invested assets	3,402			(12,359		)
Total net invested assets	$	111,034		$	117,486

RECONCILIATION OF INVESTMENT FUNDS INCLUDING RELATED PARTIES AND VIES TO NET ALTERNATIVE INVESTMENTS
Investment funds including related parties and VIEs	$	3,559		$	4,300
Nonredeemable preferred stock included in equity securities	—			78
CLO equities included in trading securities	125			405
Investment funds within funds withheld at interest	660			807
Royalties and other assets included in other investments	71			66
Net assets of the VIE, excluding investment funds	50			1
Unrealized (gains) losses and other adjustments	27			8
ACRA noncontrolling interest	—			(79		)
Total adjustments to arrive at net alternative investments	933			1,286
Net alternative investments	$	4,492		$	5,586

RECONCILIATION OF TOTAL LIABILITIES TO NET RESERVE LIABILITIES
Total liabilities	$	117,229		$	132,734
Short-term debt	—			(475		)
Long-term debt	(991		)	(992		)
Derivative liabilities	(85		)	(97		)
Payables for collateral on derivatives and securities to repurchase	(969		)	(3,255		)
Funds withheld liability	(721		)	(408		)
Other liabilities	(889		)	(1,181		)
Reinsurance ceded receivables	(5,534		)	(4,863		)
Policy loans ceded	(281		)	(235		)
ACRA noncontrolling interest	—			(6,574		)
Other	(27		)	(2		)
Total adjustments to arrive at net reserve liabilities	(9,497		)	(18,082		)
Net reserve liabilities	$	107,732		$	114,652

Form: 8-K

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