Form: 8-K

Current report filing

November 7, 2023

Documents





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Table of Contents
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FINANCIAL RESULTS
Net Flows & Outflows Attributable to Athene by Type
8
ASSETS
LIABILITIES
ADDITIONAL INFORMATION






Important Notice
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The information included in this financial supplement is unaudited and intended for informational purposes only.

Athene Holding Ltd. (AHL) is a subsidiary of Apollo Global Management, Inc. (AGM).The financial statements and exhibits included in this financial supplement should be read in conjunction with AHL’s reports and other filings with the US Securities and Exchange Commission, including its reports on Form 10-K, Form 10-Q and Form 8-K. This financial supplement does not constitute an offer to sell, or the solicitation of an offer to buy, any security of AHL, and nothing in this financial supplement shall in any way be relied on in connection with investment decisions. Each recipient of the information contained in this financial supplement is responsible for making its own independent assessment of the business, financial condition, prospects, status and affairs of AHL.

AHL adopted the US GAAP accounting standard related to Targeted Improvements to the Accounting for Long-Duration Contracts (LDTI) as of January 1, 2023, which required AHL to apply the new standard retrospectively back to January 1, 2022, the date of AHL’s merger with AGM. The 2022 financial metrics and disclosures in this supplement have been retrospectively adjusted in accordance with the requirements of the adoption guidance of LDTI. Approximately 20% of Athene’s total US GAAP liabilities as of January 1, 2022 were impacted by these changes. Please refer to the discussion of Key Operating and Non-GAAP Measures herein for additional information on items that are excluded from AHL’s non-GAAP measure of spread related earnings, which was retrospectively adjusted in accordance with the requirements of the adoption guidance of LDTI. Please see Notes 1, 2, 8 and 9 to the condensed consolidated financial statements included in AHL’s Form 10-Q for the quarter ended September 30, 2023 as well as the 2022 Financial Supplement LDTI Recast published on May 5, 2023 for more information on LDTI.

AHL undertakes no obligation to update or correct the information in this financial supplement. AHL makes no representation or warranty, express or implied, with respect to the fairness, correctness, accuracy, reasonableness or completeness of any of the information contained in this financial supplement. AHL does not accept any liability whatsoever for any direct, indirect or consequential losses (in contract, tort or otherwise) arising from the use of this financial supplement or its contents or any reliance on the information contained herein.

This financial supplement includes certain non-GAAP measures, including net investment earnings, cost of funds, other operating expenses, spread related earnings, net investment spread, net spread, adjusted debt-to-capital ratio, net invested assets, net reserve liabilities, normalized spread related earnings, normalized net investment spread and normalized net spread. Management believes the use of these non-GAAP measures (which are defined and discussed in greater detail and reconciled elsewhere in this financial supplement), together with the relevant GAAP measures, provides information that may enhance an investor’s understanding of AHL’s results of operations and the underlying profitability drivers of AHL’s business. These measures should be considered supplementary to AHL’s results in accordance with US GAAP and should not be viewed as a substitute for the corresponding US GAAP measures.

3




Financial Highlights
Unaudited (in millions, except percentages)
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Quarterly Trends Δ Year-to-Date Δ
3Q’22 4Q’22 1Q’23 2Q’23 3Q’23 Q/Q Y/Y 2022 2023 Y/Y
SELECTED INCOME STATEMENT DATA
GAAP
Net income (loss) available to AHL common shareholder $ (622) $ 361  $ 721  $ 396  $ 442  12  % NM $ (3,412) $ 1,559  NM
Return on assets (ROA) (1.07) % 0.60  % 1.15  % 0.60  % 0.66  % 6bps NM (1.91) % 0.80  % NM
NON-GAAP
Spread related earnings $ 640  $ 697  $ 687  $ 799  $ 872  9  % 36  % $ 1,769  $ 2,358  33  %
Net spread 1.33  % 1.42  % 1.36  % 1.52  % 1.68  % 16bps 35bps 1.26  % 1.52  % 26bps
Net investment spread 1.73  % 1.85  % 1.83  % 1.99  % 2.13  % 14bps 40bps 1.65  % 1.98  % 33bps
Spread related earnings - normalized1
$ 680  $ 746  $ 810  $ 874  $ 878  —  % 29  % $ 1,832  $ 2,562  40  %
Net spread - normalized1
1.41  % 1.52  % 1.61  % 1.66  % 1.69  % 3bps 28bps 1.31  % 1.66  % 35bps
Net investment spread - normalized1
1.81  % 1.95  % 2.08  % 2.13  % 2.14  % 1bp 33bps 1.70  % 2.12  % 42bps
SELECTED BALANCE SHEET DATA
GAAP
Total assets
 $ 234,554  $ 243,931  $ 257,654  $ 269,437  $ 269,763  —  % 15  % $ 234,554  $ 269,763  15  %
Goodwill 4,062  4,058  4,061  4,065  4,060  —  % —  % 4,062  4,060  —  %
Total liabilities 227,917  233,382  244,604  256,203  255,734  —  % 12  % 227,917  255,734  12  %
Debt 3,271  3,658  3,650  3,642  3,634  —  % 11  % 3,271  3,634  11  %
Total AHL shareholders' equity 5,133  7,158  8,698  8,701  8,537  (2) % 66  % 5,133  8,537  66  %
Debt-to-capital ratio 38.9  % 33.8  % 29.6  % 29.5  % 29.9  % 40bps NM 38.9  % 29.9  % NM
NON-GAAP
Gross invested assets
 $ 236,720  $ 238,310  $ 247,673  $ 257,235  $ 261,209  2  % 10  % $ 236,720  $ 261,209  10  %
Invested assets – ACRA noncontrolling interests
 (41,563) (41,859) (40,924) (43,565) (53,114) 22  % 28  % (41,563) (53,114) 28  %
Net invested assets
 195,157  196,451  206,749  213,670  208,095  (3) % 7  % 195,157  208,095  7  %
Net reserve liabilities
 173,539  175,970  184,891  193,431  185,744  (4) % 7  % 173,539  185,744  7  %
Notional debt 3,000  3,400  3,400  3,400  3,400  —  % 13  % 3,000  3,400  13  %
Adjusted AHL common shareholder’s equity 16,428  16,653  16,505  17,001  19,089  12  % 16  % 16,428  19,089  16  %
Adjusted debt-to-capital ratio 13.6  % 14.7  % 14.7  % 14.4  % 13.3  % NM (30)bps 13.6  % 13.3  % (30)bps
INFLOWS DATA
Gross organic inflows $ 12,955  $ 11,290  $ 11,927  $ 18,714  $ 12,942  (31) % —  % $ 36,560  $ 43,583  19  %
Gross inorganic inflows —  —  —  —  —  NM NM —  —  NM
Total gross inflows $ 12,955  $ 11,290  $ 11,927  $ 18,714  $ 12,942  (31) % —  % $ 36,560  $ 43,583  19  %
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 Spread related earnings – normalized, net spread - normalized and net investment spread - normalized reflect adjustments to exclude notable items and normalize alternative investment income to an 11% long-term return. See further discussion over the non-GAAP metrics in the Notes to the Financial Supplement section.
4




Condensed Consolidated Statements of Income (Loss) (GAAP view)
Unaudited (in millions, except percentages)
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Quarterly Trends Δ Year-to-Date Δ
3Q’22 4Q’22 1Q’23 2Q’23 3Q’23 Q/Q Y/Y 2022 2023 Y/Y
REVENUES
Premiums
 $ 3,045  $ 869  $ 96  $ 9,041  $ 26  (100) % (99) % $ 10,769  $ 9,163  (15) %
Product charges
 184  193  198  207  217  5  % 18  % 525  622  18  %
Net investment income
 1,843  2,319  2,407  2,717  2,928  8  % 59  % 5,252  8,052  53  %
Investment related gains (losses) (2,848) 105  1,065  366  (2,624) NM 8  % (12,811) (1,193) 91  %
Other revenues
 (26) 10  13  7  564  NM NM (38) 584  NM
Revenues of consolidated variable interest entities
Net investment income 33  31  80  55  75  36  % 127  % 80  210  163  %
Investment related gains (losses) 79  260  201  293  250  (15) % 216  % 59  744  NM
Total revenues 2,310  3,787  4,060  12,686  1,436  (89) % (38) % 3,836  18,182  NM
BENEFITS AND EXPENSES
Interest sensitive contract benefits
 171  1,119  1,289  2,012  333  (83) % 95  % (581) 3,634  NM
Future policy and other policy benefits
 3,270  1,235  466  9,512  368  (96) % (89) % 11,230  10,346  (8) %
Market risk benefits remeasurement (gains) losses (458) 32  346  (71) (441) NM 4  % (1,689) (166) 90  %
Amortization of deferred acquisition costs, deferred sales inducements and value of business acquired 112  126  138  153  211  38  % 88  % 318  502  58  %
Policy and other operating expenses
 388  412  435  452  472  4  % 22  % 1,083  1,359  25  %
Total benefits and expenses 3,483  2,924  2,674  12,058  943  (92) % (73) % 10,361  15,675  51  %
Income (loss) before income taxes (1,173) 863  1,386  628  493  (21) % NM (6,525) 2,507  NM
Income tax expense (benefit) (121) 137  163  133  162  22  % NM (783) 458  NM
Net income (loss) (1,052) 726  1,223  495  331  (33) % NM (5,742) 2,049  NM
Less: Net income (loss) attributable to noncontrolling interests (465) 329  455  54  (155) NM 67  % (2,435) 354  NM
Net income (loss) attributable to Athene Holding Ltd. shareholders (587) 397  768  441  486  10  % NM (3,307) 1,695  NM
Less: Preferred stock dividends
 35  36  47  45  44  (2) % 26  % 105  136  30  %
Net income (loss) available to Athene Holding Ltd. common shareholder $ (622) $ 361  $ 721  $ 396  $ 442  12  % NM $ (3,412) $ 1,559  NM

5




Spread Related Earnings (Management view)
Unaudited (in millions, except percentages)
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Quarterly Trends Δ Year-to-Date Δ
3Q’22 4Q’22 1Q’23 2Q’23 3Q’23 Q/Q Y/Y 2022 2023 Y/Y
SPREAD RELATED EARNINGS
Fixed income and other net investment income $ 1,471  $ 1,727  $ 1,958  $ 2,208  $ 2,236  1  % 52  % $ 3,980  $ 6,402  61  %
Alternative net investment income 250  322  185  259  230  (11) % (8) % 884  674  (24) %
Net investment earnings 1,721  2,049  2,143  2,467  2,466  —  % 43  % 4,864  7,076  45  %
Strategic capital management fees 14  14  14  16  19  19  % 36  % 39  49  26  %
Cost of funds (902) (1,158) (1,235) (1,437) (1,384) (4) % 53  % (2,597) (4,056) 56  %
Net investment spread 833  905  922  1,046  1,101  5  % 32  % 2,306  3,069  33  %
Other operating expenses (120) (128) (126) (118) (123) 4  % 3  % (338) (367) 9  %
Interest and other financing costs (73) (80) (109) (129) (106) (18) % 45  % (199) (344) 73  %
Spread related earnings $ 640  $ 697  $ 687  $ 799  $ 872  9  % 36  % $ 1,769  $ 2,358  33  %
Fixed income and other net investment income 3.27  % 3.76  % 4.13  % 4.46  % 4.58  % 12bps 131bps 3.03  % 4.40  % 137bps
Alternative net investment income 8.26  % 10.55  % 6.12  % 8.53  % 7.75  % (78)bps (51)bps 10.30  % 7.46  % NM
Net investment earnings 3.58  % 4.19  % 4.25  % 4.69  % 4.76  % 7bps 118bps 3.47  % 4.57  % 110bps
Strategic capital management fees 0.03  % 0.03  % 0.03  % 0.03  % 0.04  % 1bp 1bp 0.03  % 0.03  % 0bps
Cost of funds (1.88) % (2.37) % (2.45) % (2.73) % (2.67) % (6)bps 79bps (1.85) % (2.62) % 77bps
Net investment spread 1.73  % 1.85  % 1.83  % 1.99  % 2.13  % 14bps 40bps 1.65  % 1.98  % 33bps
Other operating expenses (0.25) % (0.26) % (0.25) % (0.22) % (0.24) % 2bps (1)bp (0.24) % (0.24) % 0bps
Interest and other financing costs (0.15) % (0.17) % (0.22) % (0.25) % (0.21) % (4)bps 6bps (0.15) % (0.22) % 7bps
Spread related earnings 1.33  % 1.42  % 1.36  % 1.52  % 1.68  % 16bps 35bps 1.26  % 1.52  % 26bps
Average net invested assets - fixed income and other $ 180,143  $ 183,597  $ 189,509  $ 198,063  $ 195,448  (1) % 8  % $ 175,380  $ 194,200  11  %
Average net invested assets - alternatives 12,088  12,207  12,091  12,146  11,864  (2) % (2) % 11,435  12,041  5  %
Average net invested assets $ 192,231  $ 195,804  $ 201,600  $ 210,209  $ 207,312  (1) % 8  % $ 186,815  $ 206,241  10  %
Please refer to Notes to the Financial Supplement section and the Non-GAAP Measure Reconciliations for discussion on spread related earnings.
6




Reconciliation of Earnings Measures
Unaudited (in millions, except percentages)
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Quarterly Trends Δ Year-to-Date Δ
3Q’22 4Q’22 1Q’23 2Q’23 3Q’23 Q/Q Y/Y 2022 2023 Y/Y
RECONCILIATION OF NET INCOME (LOSS) AVAILABLE TO ATHENE HOLDING LTD. COMMON SHAREHOLDER TO SPREAD RELATED EARNINGS
Net income (loss) available to Athene Holding Ltd. common shareholder $ (622) $ 361  $ 721  $ 396  $ 442  12  % NM $ (3,412) $ 1,559  NM
Preferred stock dividends 35  36  47  45  44  (2) % 26  % 105  136  30  %
Net income (loss) attributable to noncontrolling interests (465) 329  455  54  (155) NM 67  % (2,435) 354  NM
Net income (loss) (1,052) 726  1,223  495  331  (33) % NM (5,742) 2,049  NM
Income tax expense (benefit) (121) 137  163  133  162  22  % NM (783) 458  NM
Income (loss) before income taxes (1,173) 863  1,386  628  493  (21) % NM (6,525) 2,507  NM
Realized gains (losses) on sale of AFS securities (41) (32) (59) (81) (29) 64  % 29  % (144) (169) (17) %
Unrealized, allowances and other investment gains (losses) (671) (442) 92  (338) (261) 23  % 61  % (2,745) (507) 82  %
Change in fair value of reinsurance assets (1,146) 331  357  (153) (384) NM 66  % (4,415) (180) 96  %
Offsets to investment gains (losses) 5  6  7  9  11  22  % 120  % 7  27  286  %
Investment gains (losses), net of offsets (1,853) (137) 397  (563) (663) (18) % 64  % (7,297) (829) 89  %
Change in fair values of derivatives and embedded derivatives - FIAs 90  (24) 143  206  (141) NM NM (314) 208  NM
Non-operating change in funding agreements (80) (26) (6) 10  12  20  % NM (80) 16  NM
Change in fair value of market risk benefits 511  30  (271) 133  565  NM 11  % 1,864  427  (77) %
Non-operating change in liability for future policy benefits (3) (4) (1) (45) (5) 89  % (67) % (13) (51) NM
Non-operating change in insurance liabilities and related derivatives 518  (24) (135) 304  431  42  % (17) % 1,457  600  (59) %
Integration, restructuring and other non-operating expenses (37) (29) (29) (28) (41) 46  % 11  % (104) (98) (6) %
Stock compensation expense (15) (16) (16) (13) (13) —  % (13) % (40) (42) 5  %
Preferred stock dividends 35  36  47  45  44  (2) % 26  % 105  136  30  %
Noncontrolling interests - pre-tax income (loss) and VIE adjustments (461) 336  435  84  (137) NM 70  % (2,415) 382  NM
Less: Total adjustments to income (loss) before income taxes (1,813) 166  699  (171) (379) NM 79  % (8,294) 149  NM
Spread related earnings $ 640  $ 697  $ 687  $ 799  $ 872  9  % 36  % $ 1,769  $ 2,358  33  %
Note: Please refer to Notes to the Financial Supplement section for discussion on spread related earnings.
7




Net Flows & Outflows Attributable to Athene by Type
Unaudited (in millions, except percentages)
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Quarterly Trends Δ Year-to-Date Δ
3Q’22 4Q’22 1Q’23 2Q’23 3Q’23 Q/Q Y/Y 2022 2023 Y/Y
NET FLOWS
Retail $ 6,132  $ 7,662  $ 8,578  $ 6,782  $ 6,523  (4) % 6  % $ 12,745  $ 21,883  72  %
Flow reinsurance 2,291  1,856  1,793  2,782  3,174  14  % 39  % 4,330  7,749  79  %
Funding agreements1
1,588  1,000  1,500  148  3,245  NM 104  % 9,039  4,893  (46) %
Pension group annuities 2,944  772  56  9,002  —  NM NM 10,446  9,058  (13) %
Gross organic inflows 12,955  11,290  11,927  18,714  12,942  (31) % —  % 36,560  43,583  19  %
Gross inorganic inflows2
—  —  —  —  —  NM NM —  —  NM
Total gross inflows 12,955  11,290  11,927  18,714  12,942  (31) % —  % 36,560  43,583  19  %
Gross outflows3
(7,000) (11,064) (6,879) (9,135) (10,738) 18  % 53  % (16,808) (26,752) 59  %
Net flows $ 5,955  $ 226  $ 5,048  $ 9,579  $ 2,204  (77) % (63) % $ 19,752  $ 16,831  (15) %
Inflows attributable to Athene4
$ 11,000  $ 10,022  $ 11,896  $ 14,977  $ 3,101  (79) % (72) % $ 29,222  $ 29,974  3  %
Inflows attributable to ADIP4,5
1,955  1,268  31  3,737  9,841  163  % NM 7,338  13,609  85  %
Total gross inflows $ 12,955  $ 11,290  $ 11,927  $ 18,714  $ 12,942  (31) % —  % $ 36,560  $ 43,583  19  %
Outflows attributable to Athene $ (5,803) $ (9,787) $ (5,531) $ (7,891) $ (9,550) 21  % 65  % $ (13,937) $ (22,972) 65  %
Outflows attributable to ADIP5
(1,197) (1,277) (1,348) (1,244) (1,188) (5) % (1) % (2,871) (3,780) 32  %
Total gross outflows3
$ (7,000) $ (11,064) $ (6,879) $ (9,135) $ (10,738) 18  % 53  % $ (16,808) $ (26,752) 59  %
OUTFLOWS ATTRIBUTABLE TO ATHENE BY TYPE6
Maturity-driven, contractual-based outflows7
$ (2,834) $ (1,472) $ (1,717) $ (3,981) $ (3,243) (19) % 14  % $ (5,523) $ (8,941) 62  %
Policyholder-driven outflows8
(2,969) (3,453) (3,814) (3,910) (3,584) (8) % 21  % (8,414) (11,308) 34  %
Income oriented withdrawals (planned)9
(1,516) (1,813) (1,766) (1,750) (1,617) (8) % 7  % (4,458) (5,133) 15  %
From policies out-of-surrender-charge (planned)10
(1,131) (1,188) (1,480) (1,377) (1,326) (4) % 17  % (3,071) (4,183) 36  %
From policies in-surrender-charge (unplanned)11
(322) (452) (568) (783) (641) (18) % 99  % (885) (1,992) 125  %
Core outflows (5,803) (4,925) (5,531) (7,891) (6,827) (13) % 18  % (13,937) (20,249) 45  %
Strategic reinsurance transactions12
—  (4,862) —  —  (2,723) NM NM —  (2,723) NM
Outflows attributable to Athene $ (5,803) $ (9,787) $ (5,531) $ (7,891) $ (9,550) 21  % 65  % $ (13,937) $ (22,972) 65  %
Annualized rate13
Maturity-driven, contractual-based outflows7
(5.9) % (3.0) % (3.4) % (7.6) % (6.3) % NM 40bps (3.9) % (5.8) % 190bps
Policyholder-driven outflows8
(6.2) % (7.1) % (7.6) % (7.4) % (6.9) % (50)bps 70bps (6.0) % (7.3) % 130bps
Income oriented withdrawals (planned)9
(3.2) % (3.7) % (3.5) % (3.3) % (3.1) % (20)bps (10)bps (3.2) % (3.3) % 10bps
From policies out-of-surrender-charge (planned)10
(2.3) % (2.5) % (3.0) % (2.6) % (2.6) % 0bps 30bps (2.2) % (2.7) % 50bps
From policies in-surrender-charge (unplanned)11
(0.7) % (0.9) % (1.1) % (1.5) % (1.2) % (30)bps 50bps (0.6) % (1.3) % 70bps
Core outflows (12.1) % (10.1) % (11.0) % (15.0) % (13.2) % NM 110bps (9.9) % (13.1) % NM
Strategic reinsurance transactions12
—  % (9.9) % —  % —  % (5.2) % NM NM —  % (1.8) % NM
Outflows attributable to Athene (12.1) % (20.0) % (11.0) % (15.0) % (18.4) % NM NM (9.9) % (14.9) % NM
1 Funding agreements are comprised of funding agreements issued under our funding agreement backed notes (FABN) and funding agreement backed repurchase agreements (FABR) programs, funding agreements issued to the Federal Home Loan Bank (FHLB) and long-term repurchase agreements. 2 Gross inorganic inflows represent acquisitions and block reinsurance transactions. 3 Gross outflows include full and partial policyholder withdrawals on deferred annuities, death benefits, pension group annuity benefit payments, payments on payout annuities, funding agreement repurchases and maturities and ceded reinsurance. 4 Effective July 1, 2023, Apollo/Athene Dedicated Investment Program II (ADIP II) purchased 50% of ACRA 2’s economic interests, resulting in approximately $6.8 billion of inflows attributable to Athene for the first six months of 2023 being retroactively attributed to ADIP II. This is reflected as an inflow for ADIP and a reduction of Athene inflows in 3Q’23. 5 ADIP refers to Apollo/Athene Dedicated Investment Program (ADIP I) and ADIP II and represents the noncontrolling interests in business ceded to ACRA. 6 The format and methodology of this table was updated during 1Q’23 to provide additional information. 7 Represents outflows from funding agreements, pension group annuities and multi-year guarantee fixed annuities (MYGA), all of which occur based on defined maturities or substantially lapse upon reaching their contractual term. Amounts may vary on a quarterly basis, based on the timing of original issuance. 8 Represents outflows from fixed index annuities and other applicable products, which have varying degrees of predictability due to policyholder actions. 9 Represents partial annuity withdrawals to meet retirement income needs within contractual annual limits. 10 Represents outflows from policies that no longer have an active surrender charge in force. 11 Represents outflows from policies with an active surrender charge in force. 12 Strategic reinsurance transaction outflows include the cession of certain inforce funding agreements to Catalina General Insurance Ltd. (Catalina) in 4Q’22 and the portion of the reinsurance business recaptured by Venerable Insurance and Annuity Company (VIAC) in 3Q’23. 13 The outflow rate is calculated as outflows attributable to Athene divided by Athene average net invested assets for the respective period, on an annualized basis.
8




Condensed Consolidated Balance Sheets
Unaudited (in millions, except percentages)
image4.jpg
December 31, 2022 September 30, 2023 Δ
ASSETS
Investments
Available-for-sale securities, at fair value
 $ 102,404  $ 115,715  13  %
Trading securities, at fair value
 1,595  1,592  —  %
Equity securities 1,487  1,316  (11) %
Mortgage loans, at fair value 27,454  37,978  38  %
Investment funds
 79  124  57  %
Policy loans
 347  336  (3) %
Funds withheld at interest
 32,880  25,953  (21) %
Derivative assets
 3,309  4,571  38  %
Short-term investments 2,160  527  (76) %
Other investments 773  947  23  %
Total investments
 172,488  189,059  10  %
Cash and cash equivalents
 7,779  9,996  28  %
Restricted cash
 628  1,218  94  %
Investments in related parties
Available-for-sale securities, at fair value
 9,821  13,985  42  %
Trading securities, at fair value
 878  871  (1) %
Equity securities, at fair value
 279  304  9  %
Mortgage loans, at fair value 1,302  1,234  (5) %
Investment funds
 1,569  1,604  2  %
Funds withheld at interest
 9,808  6,620  (33) %
Short-term investments —  949  NM
Other investments, at fair value 303  327  8  %
Accrued investment income
 1,328  1,792  35  %
Reinsurance recoverable
 4,358  4,058  (7) %
Deferred acquisition costs, deferred sales inducements and value of business acquired
 4,466  5,448  22  %
Goodwill 4,058  4,060  —  %
Other assets
 8,693  8,628  (1) %
Assets of consolidated variable interest entities
Investments
Trading securities, at fair value 1,063  2,133  101  %
Mortgage loans, at fair value 2,055  2,042  (1) %
Investment funds, at fair value 12,480  15,090  21  %
Other investments, at fair value 101  94  (7) %
Cash and cash equivalents 362  152  (58) %
Other assets 112  99  (12) %
Total assets
 $ 243,931  $ 269,763  11  %
9




Condensed Consolidated Balance Sheets, continued
Unaudited (in millions, except percentages)
image4.jpg
December 31, 2022 September 30, 2023 Δ
LIABILITIES
Interest sensitive contract liabilities
 $ 173,616  $ 189,065  9  %
Future policy benefits
 42,110  46,672  11  %
Market risk benefits 2,970  3,021  2  %
Debt 3,658  3,634  (1) %
Derivative liabilities
 1,646  1,892  15  %
Payables for collateral on derivatives and securities to repurchase
 6,707  7,652  14  %
Other liabilities
 1,860  2,543  37  %
Liabilities of consolidated variable interest entities 815  1,255  54  %
Total liabilities 233,382  255,734  10  %
EQUITY
Preferred stock
 —  —  NM
Common stock
 —  —  NM
Additional paid-in capital 18,119  19,447  7  %
Retained deficit (3,640) (2,831) 22  %
Accumulated other comprehensive loss (7,321) (8,079) (10) %
Total Athene Holding Ltd. shareholders' equity 7,158  8,537  19  %
Noncontrolling interests
 3,391  5,492  62  %
Total equity 10,549  14,029  33  %
Total liabilities and equity $ 243,931  $ 269,763  11  %
10




Net Invested Assets (Management view) & Agency Ratings
Unaudited (in millions, except percentages)
image4.jpg
December 31, 2022 September 30, 2023
Invested Asset Value1
Percent of Total
Invested Asset Value1
Percent of Total
NET INVESTED ASSETS
Corporate
 $ 80,800  41.1  % $ 81,735  39.3  %
CLO
 19,881  10.1  % 20,569  9.9  %
Credit
 100,681  51.2  % 102,304  49.2  %
CML
 23,750  12.1  % 24,793  11.9  %
RML
 11,147  5.7  % 16,129  7.7  %
RMBS 7,363  3.7  % 7,861  3.8  %
CMBS
 4,495  2.3  % 5,155  2.5  %
Real estate
 46,755  23.8  % 53,938  25.9  %
ABS
 20,680  10.5  % 21,363  10.3  %
Alternative investments
 12,079  6.1  % 11,793  5.7  %
State, municipal, political subdivisions and foreign government
 2,715  1.4  % 2,618  1.2  %
Equity securities
 1,737  0.9  % 1,704  0.8  %
Short-term investments
 1,930  1.0  % 1,076  0.5  %
US government and agencies 2,691  1.4  % 3,812  1.8  %
Other investments
 41,832  21.3  % 42,366  20.3  %
Cash and equivalents 5,481  2.8  % 7,497  3.6  %
Policy loans and other 1,702  0.9  % 1,990  1.0  %
Net invested assets $ 196,451  100.0  % $ 208,095  100.0  %

A.M. Best Standard & Poor’s Fitch Moody’s
FINANCIAL STRENGTH RATINGS
Athene Annuity & Life Assurance Company
 A A+ A+ A1
Athene Annuity and Life Company
 A A+ A+ A1
Athene Annuity & Life Assurance Company of New York
 A A+ A+ A1
Athene Life Insurance Company of New York A NR NR NR
Athene Annuity Re Ltd. A A+ A+ A1
Athene Life Re Ltd. A A+ A+ A1
Athene Life Re International Ltd. A A+ A+ A1
Athene Co-Invest Reinsurance Affiliate 1A Ltd. and Athene Co-Invest Reinsurance Affiliate 1B Ltd. A A+ A+ A1
Athene Co-Invest Reinsurance Affiliate 2A Ltd. and Athene Co-Invest Reinsurance Affiliate 2B Ltd. A A+ A+ A1
Athene Co-Invest Reinsurance Affiliate International Ltd. A A+ A+ A1
CREDIT RATINGS
Athene Holding Ltd. bbb+ A- A- NR
Senior notes bbb+ A- BBB+ Baa1
1 Please refer to Notes to the Financial Supplement section 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. Net invested assets include our economic ownership of ACRA investments but do not include the investments associated with the noncontrolling interests.
11




Net Alternative Investments (Management view)
Unaudited (in millions, except percentages)
image4.jpg
December 31, 2022 September 30, 2023
Invested Asset Value1
Percent of Total
Invested Asset Value1
Percent of Total
NET ALTERNATIVE INVESTMENTS
Strategic origination platforms
Wheels Donlen $ 662  5.5  % $ 603  5.1  %
Redding Ridge 624  5.2  % 583  5.0  %
NNN Lease 579  4.8  % 488  4.1  %
MidCap Financial 604  5.0  % 543  4.6  %
Foundation Home Loans 302  2.5  % 253  2.2  %
PK AirFinance 251  2.1  % 251  2.1  %
Aqua Finance 267  2.2  % 222  1.9  %
Other 308  2.5  % 237  2.0  %
Total strategic origination platforms 3,597  29.8  % 3,180  27.0  %
Strategic retirement services platforms
Athora 1,012  8.4  % 1,113  9.4  %
Catalina 417  3.4  % 403  3.4  %
FWD 400  3.3  % 400  3.4  %
Challenger 294  2.4  % 272  2.3  %
Venerable 241  2.0  % 207  1.8  %
Other 20  0.2  % —  —  %
Total strategic retirement services platforms 2,384  19.7  % 2,395  20.3  %
Apollo and other fund investments
Equity
Real estate 1,212  10.0  % 1,029  8.7  %
Traditional private equity 947  7.8  % 1,243  10.6  %
Other 189  1.6  % 175  1.5  %
Total equity 2,348  19.4  % 2,447  20.8  %
Hybrid
Real estate 1,289  10.7  % 1,120  9.4  %
Other 1,315  10.9  % 1,297  11.0  %
Total hybrid 2,604  21.6  % 2,417  20.4  %
Yield 885  7.3  % 823  7.0  %
Total Apollo and other fund investments 5,837  48.3  % 5,687  48.2  %
Other2
261  2.2  % 531  4.5  %
Net alternative investments3
$ 12,079  100.0  % $ 11,793  100.0  %
1 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 reconciliations of investments, including related parties, to net invested assets and investment funds, including related parties and VIEs, to net alternative investments. Net invested assets include our economic ownership of ACRA investments but do not include the investments associated with the noncontrolling interests. Net alternative invested asset values reflect Athene’s ownership of Apollo Aligned Alternatives, L.P. (AAA). Athene’s ownership percentage of AAA was approximately 71%, 75%, 77% and 81% as of September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, respectively. 2 Other primarily includes cash and royalties. 3 Net alternative investments do not correspond to total investment funds, including related parties and VIEs, on our condensed consolidated balance sheets. Net alternative investments adjusts the GAAP presentation to include certain equity securities that are included in AFS or trading securities in the GAAP view, investment funds included in our funds withheld at interest and modco reinsurance portfolios, royalties and other investments.

12




Credit Quality of Securities
Unaudited (in millions, except percentages)
image4.jpg
December 31, 2022 September 30, 2023
CREDIT QUALITY OF AFS SECURITIES (GAAP VIEW)
 Fair Value Percent of Total Fair Value Percent of Total
NAIC designation
1 A-G $ 58,470  52.1  % $ 71,105  54.8  %
2 A-C 49,067  43.7  % 54,174  41.8  %
Total investment grade
 107,537  95.8  % 125,279  96.6  %
3 A-C 3,302  3.0  % 3,019  2.3  %
4 A-C 925  0.8  % 898  0.7  %
5 A-C 190  0.2  % 167  0.1  %
6 271  0.2  % 337  0.3  %
Total below investment grade
 4,688  4.2  % 4,421  3.4  %
Total AFS securities including related parties
 $ 112,225  100.0  % $ 129,700  100.0  %
NRSRO designation
AAA/AA/A $ 51,926  46.3  % $ 63,275  48.8  %
BBB 44,783  39.9  % 50,049  38.6  %
Non-rated1
8,985  8.0  % 9,951  7.7  %
Total investment grade2
105,694  94.2  % 123,275  95.1  %
BB
 3,176  2.8  % 3,036  2.3  %
B
 749  0.7  % 824  0.6  %
CCC
 1,055  0.9  % 1,020  0.8  %
CC and lower
 584  0.5  % 735  0.6  %
Non-rated1
967  0.9  % 810  0.6  %
Total below investment grade
 6,531  5.8  % 6,425  4.9  %
Total AFS securities including related parties
 $ 112,225  100.0  % $ 129,700  100.0  %
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, 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 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 an investment at amortized cost, and the likelihood of recovery of that book value.
13




Credit Quality of Net Invested Assets (Management view)
Unaudited (In millions, except percentages)
image4.jpg
December 31, 2022 September 30, 2023 December 31, 2022 September 30, 2023
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 A-G $ 71,471  50.8  % $ 76,652  53.2  % AAA/AA/A $ 60,869  43.3  % $ 66,137  45.9  %
2 A-C 62,115  44.2  % 61,553  42.7  % BBB 56,029  39.9  % 55,951  38.8  %
Non-rated 506  0.4  % 287  0.2  %
Non-rated2
14,686  10.5  % 14,062  9.7  %
Total investment grade
 134,092  95.4  % 138,492  96.1  % Total investment grade 131,584  93.7  % 136,150  94.4  %
3 A-C 4,471  3.2  % 3,745  2.6  %
BB
 4,217  3.0  % 3,469  2.4  %
4 A-C 1,259  0.9  % 1,099  0.8  %
B
 990  0.7  % 989  0.7  %
5 A-C 407  0.3  % 341  0.2  %
CCC
 1,431  1.0  % 1,297  0.9  %
6 326  0.2  % 512  0.3  %
CC and lower
 906  0.6  % 986  0.7  %
Non-rated —  —  % —  —  %
Non-rated2
1,427  1.0  % 1,298  0.9  %
Total below investment grade
 6,463  4.6  % 5,697  3.9  %
Total below investment grade
 8,971  6.3  % 8,039  5.6  %
Total NAIC designated assets3
140,555  100.0  % 144,189  100.0  %
Total NRSRO designated assets3
140,555  100.0  % 144,189  100.0  %
Assets without NAIC designation
Assets without NRSRO designation
Commercial mortgage loans
Commercial mortgage loans
CM1
 3,998  16.8  % 3,333  13.4  %
CM1
 3,998  16.8  % 3,333  13.4  %
CM2
 14,008  59.0  % 15,834  63.9  %
CM2
 14,008  59.0  % 15,834  63.9  %
CM3
 5,216  22.0  % 5,257  21.2  %
CM3
 5,216  22.0  % 5,257  21.2  %
CM4
 447  1.9  % 288  1.2  %
CM4
 447  1.9  % 288  1.2  %
CM5
 81  0.3  % 81  0.3  %
CM5
 81  0.3  % 81  0.3  %
CM6
 —  —  % —  —  %
CM6
 —  —  % —  —  %
CM7
 —  —  % —  —  %
CM7
 —  —  % —  —  %
Total CMLs
 23,750  100.0  % 24,793  100.0  %
Total CMLs
 23,750  100.0  % 24,793  100.0  %
Residential mortgage loans
Residential mortgage loans
In good standing
 10,636  95.4  % 15,436  95.7  %
In good standing
 10,636  95.4  % 15,436  95.7  %
90 days late
 422  3.8  % 583  3.6  %
90 days late
 422  3.8  % 583  3.6  %
In foreclosure
 89  0.8  % 110  0.7  %
In foreclosure
 89  0.8  % 110  0.7  %
Total RMLs
 11,147  100.0  % 16,129  100.0  %
Total RMLs
 11,147  100.0  % 16,129  100.0  %
Alternative investments
 12,079  11,793 
Alternative investments
 12,079  11,793 
Cash and equivalents 5,481  7,497  Cash and equivalents 5,481  7,497 
Equity securities
 1,737  1,704 
Equity securities
 1,737  1,704 
Other4
1,702  1,990 
Other4
1,702  1,990 
Net invested assets
 $ 196,451  $ 208,095 
Net invested assets
 $ 196,451  $ 208,095 
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, the NAIC designation methodology differs in significant respects from the NRSRO ratings methodology. 3 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 agency securities. 4 Other includes policy loans, accrued interest, and other net invested assets.
14




Credit Quality of Net Invested Assets - ABS and CLOs (Management view)
Unaudited (In millions, except percentages)
image4.jpg
December 31, 2022 September 30, 2023 December 31, 2022 September 30, 2023
Invested Asset Value1
% of Total
Invested Asset Value1
% of Total
Invested Asset Value1
% of Total
Invested Asset Value1
% of Total
CREDIT QUALITY OF ABS – NAIC DESIGNATION CREDIT QUALITY OF ABS – NRSRO DESIGNATION
1 A-G $ 12,261  59.3  % $ 12,710  59.5  % AAA/AA/A $ 11,780  57.0  % $ 12,185  57.0  %
2 A-C 7,301  35.3  % 7,613  35.6  % BBB 7,248  35.0  % 7,720  36.1  %
Non-rated —  —  % —  —  %
Non-rated2
535  2.6  % 418  2.0  %
Total investment grade 19,562  94.6  % 20,323  95.1  % Total investment grade 19,563  94.6  % 20,323  95.1  %
3 A-C 710  3.4  % 603  2.8  % BB 709  3.4  % 619  2.9  %
4 A-C 229  1.1  % 264  1.2  % B 229  1.1  % 248  1.1  %
5 A-C 157  0.8  % 139  0.7  % CCC 33  0.2  % 12  0.1  %
6 22  0.1  % 34  0.2  % CC and lower 22  0.1  % 34  0.2  %
Non-rated —  —  % —  —  %
Non-rated2
124  0.6  % 127  0.6  %
Total below investment grade 1,118  5.4  % 1,040  4.9  % Total below investment grade 1,117  5.4  % 1,040  4.9  %
ABS net invested assets $ 20,680  100.0  % $ 21,363  100.0  % ABS net invested assets $ 20,680  100.0  % $ 21,363  100.0  %
CREDIT QUALITY OF CLOs – NAIC DESIGNATION CREDIT QUALITY OF CLOs – NRSRO DESIGNATION
1 A-G $ 12,455  62.7  % $ 13,237  64.4  % AAA/AA/A $ 12,455  62.7  % $ 13,237  64.4  %
2 A-C 7,278  36.6  % 7,189  34.9  % BBB 7,278  36.6  % 7,189  34.9  %
Non-rated —  —  % —  —  %
Non-rated2
—  —  % —  —  %
Total investment grade 19,733  99.3  % 20,426  99.3  % Total investment grade 19,733  99.3  % 20,426  99.3  %
3 A-C 128  0.6  % 124  0.6  % BB 128  0.6  % 124  0.6  %
4 A-C 20  0.1  % 19  0.1  % B 20  0.1  % 19  0.1  %
5 A-C —  —  % —  —  % CCC —  —  % —  —  %
6 —  —  % —  —  % CC and lower —  —  % —  —  %
Non-rated —  —  % —  —  %
Non-rated2
—  —  % —  —  %
Total below investment grade 148  0.7  % 143  0.7  % Total below investment grade 148  0.7  % 143  0.7  %
CLO net invested assets $ 19,881  100.0  % $ 20,569  100.0  % CLO net invested assets $ 19,881  100.0  % $ 20,569  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, the NAIC designation methodology differs in significant respects from the NRSRO ratings methodology.
15




Credit Quality of Net Invested Assets - RMBS and CMBS (Management view)
Unaudited (In millions, except percentages)
image4.jpg
December 31, 2022 September 30, 2023 December 31, 2022 September 30, 2023
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 A-G $ 6,125  83.2  % $ 6,768  86.1  % AAA/AA/A $ 2,026  27.5  % $ 2,472  31.4  %
2 A-C 347  4.7  % 349  4.4  % BBB 735  10.0  % 478  6.1  %
Non-rated —  —  % —  —  %
Non-rated2
1,647  22.4  % 2,194  27.9  %
Total investment grade 6,472  87.9  % 7,117  90.5  % Total investment grade 4,408  59.9  % 5,144  65.4  %
3 A-C 455  6.2  % 393  5.0  % BB 140  1.9  % 110  1.4  %
4 A-C 309  4.2  % 211  2.7  % B 141  1.9  % 127  1.6  %
5 A-C 102  1.4  % 89  1.1  % CCC 1,333  18.1  % 1,197  15.2  %
6 25  0.3  % 51  0.7  % CC and lower 834  11.3  % 877  11.2  %
Non-rated —  —  % —  —  %
Non-rated2
507  6.9  % 406  5.2  %
Total below investment grade 891  12.1  % 744  9.5  % Total below investment grade 2,955  40.1  % 2,717  34.6  %
RMBS net invested assets $ 7,363  100.0  % $ 7,861  100.0  % RMBS net invested assets $ 7,363  100.0  % $ 7,861  100.0  %
CREDIT QUALITY OF CMBS – NAIC DESIGNATION CREDIT QUALITY OF CMBS – NRSRO DESIGNATION
1 A-G $ 3,191  71.0  % $ 3,877  75.2  % AAA/AA/A $ 2,262  50.3  % $ 3,028  58.7  %
2 A-C 811  18.0  % 827  16.0  % BBB 675  15.0  % 1,033  20.0  %
Non-rated —  —  % —  —  %
Non-rated2
610  13.6  % 292  5.7  %
Total investment grade 4,002  89.0  % 4,704  91.2  % Total investment grade 3,547  78.9  % 4,353  84.4  %
3 A-C 295  6.6  % 178  3.5  % BB 700  15.6  % 473  9.2  %
4 A-C 80  1.8  % 142  2.8  % B 167  3.7  % 218  4.2  %
5 A-C 78  1.7  % 80  1.5  % CCC 64  1.4  % 88  1.7  %
6 40  0.9  % 51  1.0  % CC and lower 17  0.4  % 23  0.5  %
Non-rated —  —  % —  —  %
Non-rated2
—  —  % —  —  %
Total below investment grade 493  11.0  % 451  8.8  % Total below investment grade 948  21.1  % 802  15.6  %
CMBS net invested assets $ 4,495  100.0  % $ 5,155  100.0  % CMBS net invested assets $ 4,495  100.0  % $ 5,155  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, the NAIC designation methodology differs in significant respects from the NRSRO ratings methodology.
16




Net Reserve Liabilities & Rollforwards
Unaudited (in millions, except percentages)
image4.jpg
December 31, 2022 September 30, 2023
Dollars Percent of Total Dollars Percent of Total
NET RESERVE LIABILITIES
Indexed annuities $ 85,163  48.4  % $ 83,955  45.2  %
Fixed rate annuities
 39,553  22.5  % 47,782  25.7  %
Total deferred annuities
 124,716  70.9  % 131,737  70.9  %
Pension group annuities 20,614  11.7  % 23,598  12.7  %
Payout annuities
 7,589  4.3  % 4,558  2.5  %
Funding agreements1
21,538  12.2  % 24,413  13.1  %
Life and other
 1,513  0.9  % 1,438  0.8  %
Total net reserve liabilities
 $ 175,970  100.0  % $ 185,744  100.0  %
Quarterly Trends Δ Year-to-Date Δ
3Q’22 4Q’22 1Q’23 2Q’23 3Q’23 Q/Q Y/Y 2022 2023 Y/Y
NET RESERVE LIABILITY ROLLFORWARD
Net reserve liabilities – beginning $ 170,703  $ 173,539  $ 175,970  $ 184,891  $ 193,431  5  % 13  % $ 168,323  $ 175,970  5  %
Gross inflows2
13,161  11,511  12,111  18,989  13,257  (30) % 1  % 37,192  44,357  19  %
Inflows attributable to ACRA noncontrolling interests (1,993) (1,305) (60) (3,751) (3,192) (15) % 60  % (7,448) (7,003) (6) %
Net inflows 11,168  10,206  12,051  15,238  10,065  (34) % (10) % 29,744  37,354  26  %
Net withdrawals
 (5,803) (4,925) (5,531) (7,891) (6,827) (13) % 18  % (13,937) (20,249) 45  %
Strategic reinsurance outflows3
—  (4,862) —  —  (2,723) NM NM —  (2,723) NM
ACRA ownership changes4
—  —  —  —  (7,023) NM NM —  (7,023) NM
Other reserve changes
 (2,529) 2,012  2,401  1,193  (1,179) NM 53  % (10,591) 2,415  NM
Net reserve liabilities – ending
 $ 173,539  $ 175,970  $ 184,891  $ 193,431  $ 185,744  (4) % 7  % $ 173,539  $ 185,744  7  %
ACRA NONCONTROLLING INTERESTS RESERVE LIABILITY ROLLFORWARD
Reserve liabilities – beginning $ 35,522  $ 35,463  $ 35,981  $ 35,281  $ 37,775  7  % 6  % $ 33,537  $ 35,981  7  %
Inflows 1,993  1,305  60  3,751  3,192  (15) % 60  % 7,448  7,003  (6) %
Withdrawals
 (1,197) (1,277) (1,348) (1,244) (1,188) (5) % (1) % (2,871) (3,780) 32  %
ACRA ownership changes4
—  —  —  —  7,023  NM NM —  7,023  NM
Other reserve changes
 (855) 490  588  (13) (226) NM 74  % (2,651) 349  NM
Reserve liabilities – ending
 $ 35,463  $ 35,981  $ 35,281  $ 37,775  $ 46,576  23  % 31  % $ 35,463  $ 46,576  31  %
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 reserve liabilities but do not include the reserve liabilities associated with the noncontrolling interests. 1 Funding agreements are comprised of funding agreements issued under our FABN and FABR programs, funding agreements issued to the FHLB and long-term repurchase agreements. 2 Gross inflows equal inflows from our retail, flow reinsurance and institutional channels as well as inflows for life and products other than deferred annuities or our institutional products, renewal inflows on older blocks of business, annuitizations and foreign currency translation adjustments on large transactions between the transaction date and the translation period. Gross inflows include all inflows sourced by Athene, including all of the inflows reinsured to ACRA. 3 Strategic reinsurance outflows include the cession of certain inforce funding agreements to Catalina in 4Q’22 and the portion of the reinsurance business recaptured by VIAC in 3Q’23. 4 Effective July 1, 2023, ADIP II purchased 50% of ACRA 2’s economic interests, resulting in approximately $6.8 billion of inflows attributable to Athene for the first six months of 2023 being retroactively attributed to ADIP II. The ADIP II reserve liabilities at inception on July 1, 2023 were $7.0 billion.

17




Deferred Annuity Liability Characteristics
Unaudited (in millions, except percentages)
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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
 $ 27,414  21.6  % $ 27,414  21.6  %
0.0% < 2.0%
 3,870  3.1  % 2,218  1.8  %
2.0% < 4.0%
 6,732  5.3  % 4,565  3.6  %
4.0% < 6.0%
 12,761  10.1  % 7,968  6.3  %
6.0% or greater 75,928  59.9  % 84,540  66.7  %
$ 126,705  100.0  % $ 126,705  100.0  %
Surrender charge (gross) MVA benefit Surrender charge (net)
Aggregate surrender charge protection
 5.8  % 2.4  % 8.2  %

Deferred annuities Percent of total Average surrender charge (gross)
YEARS OF SURRENDER CHARGE REMAINING ON DEFERRED ANNUITIES NET ACCOUNT VALUE
No Surrender Charge
 $ 27,414  21.6  % —  %
Less than 2
 18,822  14.9  % 5.6  %
2 to less than 4
 23,292  18.4  % 6.5  %
4 to less than 6
 28,527  22.5  % 7.3  %
6 to less than 8
 12,081  9.5  % 8.8  %
8 to less than 10
 13,435  10.6  % 8.9  %
10 or greater
 3,134  2.5  % 14.2  %
$ 126,705  100.0  %



18




Notes to the Financial Supplement
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KEY OPERATING AND NON-GAAP MEASURES
In addition to our results presented in accordance with accounting principles generally accepted in the United States of America (US GAAP), we present certain financial information that includes non-GAAP measures. Management believes the use of these non-GAAP measures, together with the relevant US 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), which consists of investment gains (losses), net of offsets and non-operating change in insurance liabilities and related derivatives, both defined below, as well as integration, restructuring, stock compensation 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 US GAAP and should not be viewed as a substitute for the corresponding US GAAP measures.

SPREAD RELATED EARNINGS (SRE) AND NET SPREAD
Spread related earnings is a pre-tax non-GAAP measure used to evaluate our financial performance excluding market volatility and expenses related to integration, restructuring, stock compensation and other expenses. Our spread related earnings equals net income (loss) available to AHL common shareholder adjusted to eliminate the impact of the following:

•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, changes in the credit loss allowance, and other investment gains and losses. Unrealized, allowances and other investment gains and losses are comprised of the fair value adjustments of trading securities (other than certain equity tranche securities) and mortgage loans, investments held under the fair value option, derivative gains and losses not hedging FIA index credits, and the change in credit loss allowances recognized in operations net of the change in AmerUs Closed Block fair value reserve related to the corresponding change in fair value of investments. The change in fair value of our investment in Apollo was included in prior years. Investment gains and losses are net of offsets related to the market value adjustments (MVA) associated with surrenders or terminations of contracts.
•Non-operating Change in Insurance Liabilities and Related Derivatives
•Change in Fair Values of Derivatives and Embedded Derivatives – FIAs—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. We primarily hedge with options that align with the index terms of our FIA products (typically 1–2 years). On 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.
•Non-operating Change in Funding Agreements—Consists of timing differences caused by changes to interest rates on variable funding agreements and funding agreement backed notes and the associated reserve accretion patterns of those contracts. Further included are adjustments for gains associated with our repurchases of funding agreement backed notes.
•Change in Fair Value of Market Risk Benefits—Consists primarily of volatility in capital market inputs used in the measurement at fair value of our market risk benefits, including certain impacts from changes in interest rates, equity returns and implied equity volatilities.
•Non-operating Change in Liability for Future Policy Benefits—Consists of the non-economic loss incurred at issuance for certain pension group annuities and other payout annuities with life contingencies when valuation interest rates prescribed by US GAAP are lower than the net investment earned rates, adjusted for profit, assumed in pricing. For such contracts with non-economic US GAAP losses, the SRE reserve accretes interest using an imputed discount rate that produces zero gain or loss at issuance.
•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, including long-term incentive expenses, which are not related to our underlying profitability drivers and fluctuate from time to time due to the structure of our plans.
•Income Tax (Expense) Benefit—Consists of the income tax effect of all income statement adjustments, including our Apollo investment in prior years, and is computed by applying the appropriate jurisdiction’s tax rate to all adjustments subject to income tax.
We consider these adjustments to be meaningful adjustments to net income (loss) available to AHL common shareholder 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 (loss) available to AHL common shareholder, we believe spread related earnings provides a meaningful financial metric that helps investors understand our underlying results and profitability. Spread related earnings should not be used as a substitute for net income (loss) available to AHL common shareholder.

Net spread is a non-GAAP measure used to evaluate our financial performance and profitability. Net spread is computed using our spread related earnings divided by average net invested assets for the relevant period. To enhance the ability to analyze this measure across periods, interim periods are annualized. While we believe this metric 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 ROA presented under GAAP.

NORMALIZED SRE AND NORMALIZED NET SPREAD
Normalized spread related earnings and normalized net spread reflect the SRE and net spread adjustments as described above, as well as adjustments to exclude notable items and normalize alternative investment income to an 11% long-term average annual return. We use these normalized measures to assess the long-term performance of the business against projected earnings, by excluding items that are expected to be infrequent or not indicative of the ongoing operations of the business. We view normalized non-GAAP measures as additional measures that provide insight to management and investors on the historical, period-to-period comparability of our key non-GAAP operating measures, as well as a basis for developing more realistic expectations for future performance.






19




Notes to the Financial Supplement, continued
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NET INVESTMENT SPREAD
Net investment spread is a key measure of profitability used in analyzing the trends of our core business operations. Net investment spread measures our investment performance plus our strategic capital management fees, less our total cost of funds. 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. Strategic capital management fees consist of management fees received by us for business managed for others, primarily the non-controlling interest portion of Athene’s business ceded to ACRA.
•Net investment earned rate is a non-GAAP measure we use to evaluate the performance of our net invested assets. 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 net investment income to arrive at our net investment earnings add (a) alternative investment gains and losses, (b) gains and losses related to certain equity securities, (c) net VIE impacts (revenues, expenses and noncontrolling interest), (d) forward points gains and losses on foreign exchange derivative hedges and (e) the change in fair value of reinsurance assets, and removes the proportionate share of the ACRA net investment income associated with the noncontrolling interests. The gain or loss on our investment in Apollo was removed in prior years. 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 US 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. We believe a measure like net investment earned rate is useful in analyzing the trends of our core business operations, profitability and pricing discipline. While we believe net investment earned rate 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 net investment income presented under US GAAP.
•Cost of funds includes liability costs related to cost of crediting on both deferred annuities and institutional products as well as other liability costs, but does not include the proportionate share of the ACRA cost of funds associated with the noncontrolling interests. 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 (1) pension group annuity costs, including interest credited, benefit payments and other reserve changes, net of premiums received when issued, and (2) funding agreement costs, including the interest payments and other reserve changes. Additionally, cost of crediting includes forward points gains and losses on foreign exchange derivative hedges. Other liability costs include DAC, DSI and VOBA amortization, certain market risk benefit costs, the cost of liabilities on products other than deferred annuities and institutional products, premiums and certain product charges and other revenues. We include the costs related to business added through assumed reinsurance transactions and exclude the costs related to business that we have exited through ceded reinsurance transactions. 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. We believe a measure like cost of funds is useful in analyzing the trends of our core business operations, profitability and pricing discipline. While we believe cost of funds 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 US GAAP.

NORMALIZED NET INVESTMENT SPREAD
Normalized net investment spread reflects the net investment spread adjustments as described above, as well as adjustments to exclude notable items and normalize alternative investment income to an 11% long-term return. We use this normalized measure to assess the performance of the business against projected earnings, by excluding items that are expected to be infrequent or not indicative of the ongoing operations of the business. We view normalized non-GAAP measures as additional measures that provide insight to management and investors on the historical, period-to-period comparability of our key non-GAAP operating measures, as well as a basis for developing more realistic expectations for future performance.

OTHER OPERATING EXPENSES
Other operating expenses excludes integration, restructuring and other non-operating expenses, stock compensation and long-term incentive plan expenses, interest expense, policy acquisition expenses and the proportionate share of the ACRA operating expenses associated with the noncontrolling interests. We believe a measure like other operating expenses is useful in analyzing the trends of our core business operations and profitability. While we believe other 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 US GAAP.

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 changes in fair value of funds withheld and modco reinsurance assets as well as mortgage loan assets, net of tax. Adjusted debt-to-capital ratio is calculated as total debt at notional value divided by adjusted capitalization. Adjusted capitalization includes our adjusted AHL common shareholder’s equity, preferred stock and the notional value of our debt. Adjusted AHL common shareholder’s equity is calculated as the ending AHL shareholders’ equity excluding AOCI, the cumulative changes in fair value of funds withheld and modco reinsurance assets and mortgage loan assets as well as preferred stock. 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, reinsurance assets and mortgage loans. Except with respect to reinvestment activity relating to acquired blocks of businesses, we typically buy and hold 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. Adjusted debt-to-capital ratio should not be used as a substitute for the debt-to-capital ratio. However, we believe the adjustments to shareholders’ equity are significant to gaining an understanding of our capitalization, debt utilization and debt capacity.

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 represent 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 include (a) total investments on the consolidated balance sheets, with AFS securities, trading securities and mortgage loans 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) VIE assets, liabilities and noncontrolling interest adjustments, (f) net investment payables and receivables, (g) policy loans ceded (which offset the direct policy loans in total investments) and (h) an adjustment for the allowance for credit losses. Net invested assets exclude 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 include our proportionate share of ACRA investments, based on our economic ownership, but do not include the proportionate share of investments associated with the noncontrolling interests. 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 US GAAP.
20




Notes to the Financial Supplement, continued
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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 are used to analyze the costs of our liabilities. Net reserve liabilities include (a) interest sensitive contract liabilities, (b) future policy benefits, (c) net market risk benefits, (d) long-term repurchase obligations, (e) dividends payable to policyholders and (f) 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 do not include the proportionate share of reserve liabilities associated with the noncontrolling interests. Net reserve liabilities are 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 insurance business following acquisitions. For such transactions, US 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. We include the underlying liabilities assumed through modco reinsurance agreements in our net reserve liabilities calculation in order to match the liabilities with the expenses incurred. 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 US GAAP.

SALES
Sales statistics do not correspond to revenues under US GAAP but are used as relevant measures to understand our business performance as it relates to inflows generated during a specific period of time. Our sales statistics include inflows 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). We believe sales is a meaningful metric that enhances our understanding of our business performance and is not the same as premiums presented in our condensed consolidated statements of income (loss).
21




Non-GAAP Reconciliations
Unaudited (in millions, except percentages)
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Quarterly Trends
3Q’22 4Q’22 1Q’23 2Q’23 3Q’23
RECONCILIATION OF TOTAL AHL SHAREHOLDERS’ EQUITY TO TOTAL ADJUSTED AHL COMMON SHAREHOLDER’S EQUITY
Total AHL shareholders' equity $ 5,133  $ 7,158  $ 8,698  $ 8,701  $ 8,537 
Less: Preferred stock 2,667  3,154  3,154  3,154  3,154 
Total AHL common shareholder's equity 2,466  4,004  5,544  5,547  5,383 
Less: Accumulated other comprehensive loss (8,473) (7,321) (6,148) (6,376) (8,079)
Less: Accumulated change in fair value of reinsurance assets (3,394) (3,127) (2,791) (2,843) (2,807)
Less: Accumulated change in fair value of mortgage loan assets (2,095) (2,201) (2,022) (2,235) (2,820)
Total adjusted AHL common shareholder's equity $ 16,428  $ 16,653  $ 16,505  $ 17,001  $ 19,089 
RECONCILIATION OF DEBT-TO-CAPITAL RATIO TO ADJUSTED DEBT-TO-CAPITAL RATIO
Total debt $ 3,271  $ 3,658  $ 3,650  $ 3,642  $ 3,634 
Less: Adjustment to arrive at notional debt 271  258  250  242  234 
Notional debt $ 3,000  $ 3,400  $ 3,400  $ 3,400  $ 3,400 
Total debt $ 3,271  $ 3,658  $ 3,650  $ 3,642  $ 3,634 
Total AHL shareholders' equity 5,133  7,158  8,698  8,701  8,537 
Total capitalization 8,404  10,816  12,348  12,343  12,171 
Less: Accumulated other comprehensive loss (8,473) (7,321) (6,148) (6,376) (8,079)
Less: Accumulated change in fair value of reinsurance assets (3,394) (3,127) (2,791) (2,843) (2,807)
Less: Accumulated change in fair value of mortgage loan assets (2,095) (2,201) (2,022) (2,235) (2,820)
Less: Adjustment to arrive at notional debt 271  258  250  242  234 
Total adjusted capitalization $ 22,095  $ 23,207  $ 23,059  $ 23,555  $ 25,643 
Debt-to-capital ratio 38.9  % 33.8  % 29.6  % 29.5  % 29.9  %
Accumulated other comprehensive loss (14.7) % (10.5) % (7.8) % (7.9) % (9.4) %
Accumulated change in fair value of reinsurance assets (5.9) % (4.5) % (3.5) % (3.5) % (3.2) %
Accumulated change in fair value of mortgage loan assets (3.7) % (3.2) % (2.6) % (2.8) % (3.3) %
Adjustment to arrive at notional debt (1.0) % (0.9) % (1.0) % (0.9) % (0.7) %
Adjusted debt-to-capital ratio 13.6  % 14.7  % 14.7  % 14.4  % 13.3  %








22




Non-GAAP Reconciliations
Unaudited (in millions, except percentages)
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Quarterly Trends Year-to-Date
3Q’22 4Q’22 1Q’23 2Q’23 3Q’23 2022 2023
RECONCILIATION OF NET INCOME (LOSS) AVAILABLE TO AHL COMMON SHAREHOLDER TO NORMALIZED SPREAD RELATED EARNINGS
Net income (loss) available to Athene Holding Ltd. common shareholder $ (622) $ 361  $ 721  $ 396  $ 442  $ (3,412) $ 1,559 
Preferred stock dividends 35  36  47  45  44  105  136 
Net income (loss) attributable to noncontrolling interests (465) 329  455  54  (155) (2,435) 354 
Net income (loss) (1,052) 726  1,223  495  331  (5,742) 2,049 
Income tax expense (benefit) (121) 137  163  133  162  (783) 458 
Income (loss) before income taxes (1,173) 863  1,386  628  493  (6,525) 2,507 
Less: Total adjustments to income (loss) before income taxes (1,813) 166  699  (171) (379) (8,294) 149 
Spread related earnings 640  697  687  799  872  1,769  2,358 
Normalization of alternative investment income to 11% 82  14  148  75  96  66  319 
Other notable items (42) 35  (25) —  (90) (3) (115)
Normalized spread related earnings $ 680  $ 746  $ 810  $ 874  $ 878  $ 1,832  $ 2,562 
RECONCILIATION OF NET INVESTMENT INCOME TO NET INVESTMENT EARNINGS
US GAAP net investment income $ 1,843  $ 2,319  $ 2,407  $ 2,717  $ 2,928  $ 5,252  $ 8,052 
Change in fair value of reinsurance assets 11  52  70  37  (42) 281  65 
VIE earnings and noncontrolling interest 219  197  200  279  264  389  743 
Alternative gains (losses) 10  41  (9) 2  1  —  (6)
Reinsurance impacts —  (41) (64) (69) (66) —  (199)
Apollo investment gain —  —  —  —  —  (33) — 
ACRA noncontrolling interests (407) (446) (448) (504) (676) (1,059) (1,628)
Held for trading amortization and other 45  (73) (13) 5  57  34  49 
Total adjustments to arrive at net investment earnings
 (122) (270) (264) (250) (462) (388) (976)
Total net investment earnings
 $ 1,721  $ 2,049  $ 2,143  $ 2,467  $ 2,466  $ 4,864  $ 7,076 
RECONCILIATION OF NET INVESTMENT INCOME RATE TO NET INVESTMENT EARNED RATE
US GAAP net investment income 3.83  % 4.74  % 4.78  % 5.17  % 5.65  % 3.75  % 5.21  %
Change in fair value of reinsurance assets 0.02  % 0.11  % 0.14  % 0.07  % (0.08) % 0.20  % 0.04  %
VIE earnings and noncontrolling interest 0.46  % 0.40  % 0.40  % 0.53  % 0.51  % 0.28  % 0.48  %
Alternative gains (losses) 0.02  % 0.08  % (0.02) % —  % —  % —  % (0.01) %
Reinsurance impacts —  % (0.08) % (0.13) % (0.13) % (0.13) % —  % (0.13) %
Apollo investment gain —  % —  % —  % —  % —  % (0.02) % —  %
ACRA noncontrolling interests (0.85) % (0.91) % (0.89) % (0.96) % (1.30) % (0.76) % (1.05) %
Held for trading amortization and other 0.10  % (0.15) % (0.03) % 0.01  % 0.11  % 0.02  % 0.03  %
Total adjustments to arrive at net investment earned rate
 (0.25) % (0.55) % (0.53) % (0.48) % (0.89) % (0.28) % (0.64) %
Net investment earned rate 3.58  % 4.19  % 4.25  % 4.69  % 4.76  % 3.47  % 4.57  %
Average net invested assets $ 192,231  $ 195,804  $ 201,600  $ 210,209  $ 207,312  $ 186,815  $ 206,241 
23




Non-GAAP Reconciliations
Unaudited (in millions, except percentages)
image4.jpg
Quarterly Trends Year-to-Date
3Q’22 4Q’22 1Q’23 2Q’23 3Q’23 2022 2023
RECONCILIATION OF BENEFITS AND EXPENSES TO COST OF FUNDS
US GAAP benefits and expenses $ 3,483  $ 2,924  $ 2,674  $ 12,058  $ 943  $ 10,361  $ 15,675 
Premiums (3,045) (869) (96) (9,041) (26) (10,769) (9,163)
Product charges (184) (193) (198) (207) (217) (525) (622)
Other revenues 26  (10) (13) (7) (123) 38  (143)
FIA option costs 322  342  365  385  374  922  1,124 
Reinsurance impacts 12  (19) (37) (38) (41) 36  (116)
Non-operating change in insurance liabilities and embedded derivatives 652  (481) (873) (1,113) 969  3,306  (1,017)
Policy and other operating expenses, excluding policy acquisition expenses (294) (309) (310) (323) (335) (801) (968)
AmerUs Closed Block fair value liability 77  (27) (42) 17  52  318  27 
ACRA noncontrolling interests (157) (258) (287) (379) (311) (291) (977)
Other 10  58  52  85  99  2  236 
Total adjustments to arrive at cost of funds (2,581) (1,766) (1,439) (10,621) 441  (7,764) (11,619)
Total cost of funds $ 902  $ 1,158  $ 1,235  $ 1,437  $ 1,384  $ 2,597  $ 4,056 
RECONCILIATION OF TOTAL BENEFITS AND EXPENSES RATE TO COST OF FUNDS RATE
US GAAP benefits and expenses 7.25  % 5.97  % 5.31  % 22.94  % 1.83  % 7.40  % 10.12  %
Premiums (6.34) % (1.78) % (0.19) % (17.20) % (0.05) % (7.69) % (5.92) %
Product charges (0.38) % (0.39) % (0.39) % (0.39) % (0.42) % (0.38) % (0.40) %
Other revenues 0.06  % (0.02) % (0.03) % (0.01) % (0.24) % 0.03  % (0.09) %
FIA option costs 0.67  % 0.70  % 0.72  % 0.73  % 0.72  % 0.66  % 0.73  %
Reinsurance impacts 0.02  % (0.04) % (0.07) % (0.07) % (0.08) % 0.02  % (0.07) %
Non-operating change in insurance liabilities and embedded derivatives 1.36  % (0.98) % (1.73) % (2.12) % 1.87  % 2.36  % (0.66) %
Policy and other operating expenses, excluding policy acquisition expenses (0.61) % (0.63) % (0.62) % (0.61) % (0.65) % (0.57) % (0.63) %
AmerUs Closed Block fair value liability 0.16  % (0.05) % (0.08) % 0.03  % 0.10  % 0.23  % 0.02  %
ACRA noncontrolling interests (0.33) % (0.53) % (0.57) % (0.72) % (0.60) % (0.21) % (0.63) %
Other 0.02  % 0.12  % 0.10  % 0.15  % 0.19  % —  % 0.15  %
Total adjustments to arrive at cost of funds (5.37) % (3.60) % (2.86) % (20.21) % 0.84  % (5.55) % (7.50) %
Total cost of funds 1.88  % 2.37  % 2.45  % 2.73  % 2.67  % 1.85  % 2.62  %
Average net invested assets $ 192,231  $ 195,804  $ 201,600  $ 210,209  $ 207,312  $ 186,815  $ 206,241 
24




Non-GAAP Reconciliations
Unaudited (in millions)
image4.jpg
Quarterly Trends Year-to-Date
3Q’22 4Q’22 1Q’23 2Q’23 3Q’23 2022 2023
RECONCILIATION OF POLICY AND OTHER OPERATING EXPENSES TO OTHER OPERATING EXPENSES
US GAAP policy and other operating expenses $ 388  $ 412  $ 435  $ 452  $ 472  $ 1,083  $ 1,359 
Interest expense (68) (85) (115) (132) (113) (142) (360)
Policy acquisition expenses, net of deferrals (94) (103) (125) (129) (137) (282) (391)
Integration, restructuring and other non-operating expenses (37) (29) (29) (28) (41) (104) (98)
Stock compensation expenses (15) (16) (16) (13) (13) (40) (42)
ACRA noncontrolling interests (73) (48) (17) (31) (30) (183) (78)
Other 19  (3) (7) (1) (15) 6  (23)
Total adjustments to arrive at other operating expenses (268) (284) (309) (334) (349) (745) (992)
Other operating expenses $ 120  $ 128  $ 126  $ 118  $ 123  $ 338  $ 367 
December 31, 2022 September 30, 2023
RECONCILIATION OF INVESTMENT FUNDS, INCLUDING RELATED PARTIES AND VIES, TO NET ALTERNATIVE INVESTMENTS
Investment funds, including related parties and VIEs $ 14,128  $ 16,818 
Equity securities 509  472 
Certain equity securities included in AFS or trading securities 225  197 
Investment funds within funds withheld at interest 1,126  802 
Royalties 15  14 
Net assets of the VIE, excluding investment funds (2,041) (4,006)
Unrealized (gains) losses 44  73 
ACRA noncontrolling interests (1,836) (2,391)
Other assets (91) (186)
Total adjustments to arrive at net alternative investments
 (2,049) (5,025)
Net alternative investments
 $ 12,079  $ 11,793 
    










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Non-GAAP Reconciliations
Unaudited (in millions)
image4.jpg
Quarterly Trends
3Q’22 4Q’22 1Q’23 2Q’23 3Q’23
RECONCILIATION OF TOTAL INVESTMENTS, INCLUDING RELATED PARTIES, TO NET INVESTED ASSETS
Total investments, including related parties $ 185,376  $ 196,448  $ 203,230  $ 215,322  $ 214,953 
Derivative assets (4,065) (3,309) (3,956) (5,114) (4,571)
Cash and cash equivalents (including restricted cash) 10,847  8,407  14,992  12,804  11,214 
Accrued investment income 1,226  1,328  1,458  1,646  1,792 
Net receivable (payable) for collateral on derivatives (1,940) (1,486) (1,909) (2,940) (2,485)
Reinsurance funds withheld and modified coinsurance 7,156  1,423  942  1,046  882 
VIE assets, liabilities and noncontrolling interest 13,105  12,747  12,799  13,693  14,340 
Unrealized (gains) losses 25,098  22,284  19,782  20,676  25,078 
Ceded policy loans (180) (179) (175) (174) (174)
Net investment receivables (payables) (349) 186  39  (217) (375)
Allowance for credit losses 446  471  521  536  592 
Other investments —  (10) (50) (43) (37)
Total adjustments to arrive at gross invested assets
 51,344  41,862  44,443  41,913  46,256 
Gross invested assets
 236,720  238,310  247,673  257,235  261,209 
ACRA noncontrolling interests (41,563) (41,859) (40,924) (43,565) (53,114)
Net invested assets
 $ 195,157  $ 196,451  $ 206,749  $ 213,670  $ 208,095 
RECONCILIATION OF TOTAL LIABILITIES TO NET RESERVE LIABILITIES
Total liabilities $ 227,917  $ 233,382  $ 244,604  $ 256,203  $ 255,734 
Debt (3,271) (3,658) (3,650) (3,642) (3,634)
Derivative liabilities (2,222) (1,646) (1,518) (1,753) (1,892)
Payables for collateral on derivatives and securities to repurchase (4,149) (3,841) (7,331) (6,979) (4,786)
Other liabilities (2,824) (1,635) (1,381) (1,712) (2,324)
Liabilities of consolidated VIEs (1,401) (815) (847) (1,189) (1,255)
Reinsurance impacts (4,357) (9,176) (9,090) (9,115) (8,918)
Policy loans ceded (180) (179) (175) (174) (174)
Market risk benefit asset (511) (481) (440) (433) (431)
ACRA noncontrolling interests (35,463) (35,981) (35,281) (37,775) (46,576)
Total adjustments to arrive at net reserve liabilities
 (54,378) (57,412) (59,713) (62,772) (69,990)
Net reserve liabilities
 $ 173,539  $ 175,970  $ 184,891  $ 193,431  $ 185,744 
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