AMERICAN EQUITY INVESTMENT LIFE HOLDING CO - FORM 8-K - EX-99.2 - FINANCIAL SUPPLEMENT

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8-K - 8-K - AMERICAN EQUITY INVESTMENT LIFE HOLDING CO	a2015-03x31_ael8k.htm
EX-99.1 - PRESS RELEASE - AMERICAN EQUITY INVESTMENT LIFE HOLDING CO	a2015-03x31_ael8kexhibit991.htm

Exhibit 99.2

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement

March 31, 2015



A.	Financial Highlights
	Condensed Consolidated Balance Sheets	1
	Consolidated Statements of Operations	2
	Quarterly Summary - Most Recent 5 Quarters	3
	Non-GAAP Financial Measures
	Reconciliation from Net Income (Loss) to Operating Income	4
	Summary of Adjustments to Arrive at Operating Income	5
	Quarterly Summary - Reconciliation from Net Income (Loss) to Operating Income	6
	Quarterly Summary - Summary of Adjustments to Arrive at Operating Income	7
	Capitalization/Book Value per Share	8
	Spread Results	9

B.	Product Summary
	Summary of Cost of Money for Deferred Annuities	9
	Annuity Account Balance Rollforward	9
	Annuity Deposits by Product Type	10
	Surrender Charge Protection and Account Values by Product Type	10
	Annuity Liability Characteristics	11

C.	Investment Summary
	Summary of Invested Assets	14
	Credit Quality of Fixed Maturity Securities	14
	Watch List Securities	14
	Fixed Maturity Securities by Sector	15
	Mortgage Loans on Commercial Real Estate	16

D.	Shareholder Information	17

E.	Research Analyst Coverage	18

Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - March 31, 2015

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)



	March 31, 2015		December 31, 2014
Assets
Investments:
Fixed maturity securities:
Available for sale, at fair value	$	34,203,641	$	32,445,202
Held for investment, at amortized cost	76,479		76,432
Equity securities, available for sale, at fair value	7,849		7,805
Mortgage loans on real estate	2,433,757		2,434,580
Derivative instruments	610,764		731,113
Other investments	285,177		286,726
Total investments	37,617,667		35,981,858

Cash and cash equivalents	293,764		701,514
Coinsurance deposits	3,101,783		3,044,342
Accrued investment income	358,241		326,559
Deferred policy acquisition costs	2,021,990		2,058,556
Deferred sales inducements	1,558,921		1,587,257
Income taxes recoverable	—		9,252
Other assets	436,349		280,396
Total assets	$	45,388,715	$	43,989,734

Liabilities and Stockholders' Equity
Liabilities:
Policy benefit reserves	$	41,037,401	$	39,802,861
Other policy funds and contract claims	353,741		365,819
Notes payable	421,919		421,679
Subordinated debentures	246,293		246,243
Amounts due under repurchase agreements	15,075		—
Deferred income taxes	74,149		3,895
Income taxes payable	13,290		—
Other liabilities	900,127		1,009,361
Total liabilities	43,061,995		41,849,858

Stockholders' equity:
Common stock	76,681		76,062
Additional paid-in capital	521,203		513,218
Accumulated other comprehensive income	893,738		721,401
Retained earnings	835,098		829,195
Total stockholders' equity	2,326,720		2,139,876
Total liabilities and stockholders' equity	$	45,388,715	$	43,989,734

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - March 31, 2015

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share data)

(Unaudited)



	Three Months Ended March 31,
	2015			2014
Revenues:
Premiums and other considerations	$	6,997		$	7,331
Annuity product charges	28,682			25,272
Net investment income	399,669			370,005
Change in fair value of derivatives	(31,100		)	48,493
Net realized gains (losses) on investments, excluding other than temporary impairment ("OTTI") losses	4,879			(714		)
OTTI losses on investments:
Total OTTI losses	(132		)	—
Portion of OTTI losses recognized from other comprehensive income	—			(905		)
Net OTTI losses recognized in operations	(132		)	(905		)
Loss on extinguishment of debt	—			(3,977		)
Total revenues	408,995			445,505

Benefits and expenses:
Insurance policy benefits and change in future policy benefits	9,220			10,095
Interest sensitive and index product benefits	282,825			317,192
Amortization of deferred sales inducements	10,953			666
Change in fair value of embedded derivatives	51,213			92,619
Interest expense on notes payable	7,339			10,264
Interest expense on subordinated debentures	3,016			3,008
Amortization of deferred policy acquisition costs	14,286			7,194
Other operating costs and expenses	21,122			19,085
Total benefits and expenses	399,974			460,123
Income (loss) before income taxes	9,021			(14,618		)
Income tax expense (benefit)	3,118			(4,865		)
Net income (loss)	$	5,903		$	(9,753	)

Earnings (loss) per common share	$	0.08		$	(0.13	)
Earnings (loss) per common share - assuming dilution	$	0.07		$	(0.13	)
Weighted average common shares outstanding (in thousands):
Earnings (loss) per common share	77,042			72,519
Earnings (loss) per common share - assuming dilution	79,118			79,616

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - March 31, 2015

Quarterly Summary - Most Recent 5 Quarters (Unaudited)



	Q1 2015			Q4 2014			Q3 2014			Q2 2014			Q1 2014
	(Dollars in thousands, except per share data)
Revenues:
Traditional life insurance premiums	$	2,703		$	2,537		$	2,615		$	2,854		$	2,804
Life contingent immediate annuity considerations	4,294			7,589			3,428			6,269			4,527
Surrender charges	11,554			10,418			11,717			12,942			12,423
Lifetime income benefit rider fees	17,128			22,095			20,241			16,305			12,849
Net investment income	399,669			403,849			386,931			370,882			370,005
Change in fair value of derivatives	(31,100		)	146,231			39,218			270,883			48,493
Net realized gains (losses) on investments, excluding OTTI	4,879			2,131			(3,190		)	(2,230		)	(714		)
Net OTTI losses recognized in operations	(132		)	(564		)	(564		)	(594		)	(905		)
Loss on extinguishment of debt	—			(1,951		)	—			(6,574		)	(3,977		)
Total revenues	408,995			592,335			460,396			670,737			445,505

Benefits and expenses:
Traditional life insurance policy benefits and change in future policy benefits	1,931			1,300			2,420			1,758			2,261
Life contingent immediate annuity benefits and change in future policy benefits	7,289			10,324			6,689			9,229			7,834
Interest sensitive and index product benefits (a)	282,825			359,319			429,415			367,774			317,192
Amortization of deferred sales inducements (b)	10,953			34,743			40,661			55,349			666
Change in fair value of embedded derivatives (c)	51,213			53,973			(195,206		)	80,935			92,619
Interest expense on notes payable	7,339			8,244			8,741			9,121			10,264
Interest expense on subordinated debentures	3,016			3,046			3,044			3,024			3,008
Amortization of deferred policy acquisition costs (b)	14,286			49,629			39,671			67,084			7,194
Other operating costs and expenses (d)	21,122			20,996			20,616			20,887			19,085
Total benefits and expenses	399,974			541,574			356,051			615,161			460,123
Income (loss) before income taxes	9,021			50,761			104,345			55,576			(14,618		)
Income tax expense (benefit)	3,118			19,544			36,530			18,832			(4,865		)
Net income (loss) (a)(b)(c)(d)	$	5,903		$	31,217		$	67,815		$	36,744		$	(9,753	)

Earnings (loss) per common share	$	0.08		$	0.41		$	0.90		$	0.49		$	(0.13	)
Earnings (loss) per common share - assuming dilution (a)(b)(c)(d)	$	0.07		$	0.39		$	0.85		$	0.46		$	(0.13	)
Weighted average common shares outstanding (in thousands):
Earnings (loss) per common share	77,042			75,620			75,083			74,461			72,519
Earnings (loss) per common share - assuming dilution	79,118			80,154			79,467			79,518			79,616

(a)

Q3 2014 includes expense from the revision of assumptions used in determining reserves held for living income benefit riders consistent with unlocking for deferred policy acquisition costs and deferred sales inducements. The impact increased interest sensitive and index product benefits by $12.4 million and decreased net income and earnings per common share - assuming dilution by $8.0 million and $0.10 per share, respectively.


(b)	Q3 2014 includes benefit from unlocking which reduced amortization of deferred sales inducements and deferred policy acquisition costs by $12.6 million and $35.5 million, respectively, and increased net income and earnings per common share- assuming dilution by $31.0 million and $0.39 per share, respectively.


(c)	Q2 2014 includes a benefit of $62.6 million from the revision of assumptions used in determining fixed index annuity embedded derivatives, which after related adjustments to deferred sales inducements and deferred policy acquisition costs and income taxes, increased net income and earnings per common share - assuming dilution by $14.8 million and $0.19 per share, respectively.

(d)

Q1 2014 includes a net benefit of $2.2 million from recognizing a decrease in an estimated class action litigation reserve based upon developments in the claim process for settlement of the class action and third party costs incurred during the quarter associated with administration of the settlement, which after related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs and income taxes, decreased net loss and loss per common share - assuming dilution by $0.9 million and $0.01 per share, respectively.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - March 31, 2015

NON-GAAP FINANCIAL MEASURES

In addition to net income (loss), we have consistently utilized operating income and operating income per common share - assuming dilution, non-GAAP financial measures commonly used in the life insurance industry, as economic measures to evaluate our financial performance. Operating income equals net income (loss) adjusted to eliminate the impact of net realized gains and losses on investments including net OTTI losses recognized in operations, fair value changes in derivatives and embedded derivatives, loss on extinguishment of debt and changes in litigation reserves. Because these items fluctuate from quarter to quarter in a manner unrelated to core operations, we believe measures excluding their impact are useful in analyzing operating trends. We believe the combined presentation and evaluation of operating income together with net income (loss) provides information that may enhance an investor’s understanding of our underlying results and profitability.

Reconciliation from Net Income (Loss) to Operating Income (Unaudited)



	Three Months Ended March 31,
	2015			2014
	(Dollars in thousands, except per share data)
Net income (loss)	$	5,903		$	(9,753	)
Adjustments to arrive at operating income: (a)
Net realized investment (gains) losses, including OTTI	(1,819		)	564
Change in fair value of derivatives and embedded derivatives - index annuities	43,657			43,708
Change in fair value of derivatives and embedded derivatives - debt	1,077			1,509
Litigation reserve	—			(916		)
Extinguishment of debt	—			2,394
Operating income (a non-GAAP financial measure)	$	48,818		$	37,506

Per common share - assuming dilution:
Net income (loss)	$	0.07		$	(0.13	)
Adjustments to arrive at operating income:
Anti-dilutive effect of net loss	—			0.01
Net realized investment (gains) losses, including OTTI	(0.02		)	—
Change in fair value of derivatives and embedded derivatives - index annuities	0.55			0.55
Change in fair value of derivatives and embedded derivatives - debt	0.02			0.02
Litigation reserve	—			(0.01		)
Extinguishment of debt	—			0.03
Operating income (a non-GAAP financial measure)	$	0.62		$	0.47


(a)	Adjustments to net income (loss) to arrive at operating income are presented net of income taxes and where applicable, are net of related adjustments to amortization of deferred sales inducements (DSI) and deferred policy acquisition costs (DAC).

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - March 31, 2015

NON-GAAP FINANCIAL MEASURES

Summary of Adjustments to Arrive at Operating Income (Unaudited)



	Three Months Ended March 31,
	2015			2014
	(Dollars in thousands)
Net realized investment gains and losses, including OTTI:
Net realized (gains) losses on investments, including OTTI	$	(4,747	)	$	1,619
Amortization of DAC and DSI	1,926			(746		)
Income taxes	1,002			(309		)
	$	(1,819	)	$	564
Change in fair value of derivatives and embedded derivatives:
Index annuities	$	163,648		$	167,481
Interest rate caps and swap	1,841			2,579
Amortization of DAC and DSI	(97,112		)	(101,803		)
Income taxes	(23,643		)	(23,040		)
	$	44,734		$	45,217
Litigation reserve:
Change in litigation reserve recorded in other operating costs	$	—		$	(2,212	)
Amortization of DAC and DSI	—			795
Income taxes	—			501
	$	—		$	(916	)
Extinguishment of debt:
Loss on extinguishment of debt	$	—		$	3,977
Income taxes	—			(1,583		)
	$	—		$	2,394

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - March 31, 2015

NON-GAAP FINANCIAL MEASURES

Quarterly Summary - Most Recent 5 Quarters (Unaudited)

Reconciliation from Net Income (Loss) to Operating Income



	Q1 2015			Q4 2014			Q3 2014			Q2 2014			Q1 2014
	(Dollars in thousands, except per share data)
Net income (loss)	$	5,903		$	31,217		$	67,815		$	36,744		$	(9,753	)
Adjustments to arrive at operating income: (a)
Net realized investment (gains) losses, including OTTI	(1,819		)	(613		)	1,551			1,361			564
Change in fair value of derivatives and embedded derivatives - index annuities	43,657			16,463			(4,957		)	(4,115		)	43,708
Change in fair value of derivatives and embedded derivatives - debt	1,077			32			(427		)	(1,053		)	1,509
Litigation reserve	—			—			—			—			(916		)
Extinguishment of debt	—			3,604			—			5,518			2,394
Operating income (a non-GAAP financial measure) (b)(c)	$	48,818		$	50,703		$	63,982		$	38,455		$	37,506

Operating income per common share - assuming dilution (b)(c)	$	0.62		$	0.63		$	0.81		$	0.48		$	0.47


(a)	Adjustments to net income (loss) to arrive at operating income are presented net of income taxes and where applicable, are net of related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs.


(b)	Q3 2014 includes a benefit from unlocking which reduced amortization of deferred sales inducements and deferred policy acquisition costs by $10.7 million and $33.0 million, respectively, and increased operating income and operating income per common share- assuming dilution by $28.2 million and $0.36 per share, respectively.

(c)

Q3 2014 includes expense from the revision of assumptions used in determining reserves held for living income benefit riders consistent with unlocking for deferred policy acquisition costs and deferred sales inducements. The impact increased interest sensitive and index product benefits by $12.4 million and decreased operating income and operating income per common share - assuming dilution by $8.0 million and $0.10 per share, respectively.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - March 31, 2015

NON-GAAP FINANCIAL MEASURES

Summary of Adjustments to Arrive at Operating Income (Unaudited)



	Q1 2015			Q4 2014			Q3 2014			Q2 2014			Q1 2014
	(Dollars in thousands)
Net realized (gains) losses on investments	$	(4,879	)	$	(2,131	)	$	3,190		$	2,230		$	714
Net OTTI losses recognized in operations	132			564			564			594			905
Change in fair value of derivatives	114,843			19,033			171,274			(95,852		)	57,039
Loss on extinguishment of debt	—			1,951			—			6,574			3,977
Increase (decrease) in total revenues	110,096			19,417			175,028			(86,454		)	62,635

Amortization of deferred sales inducements	38,686			14,579			(3,886		)	(10,749		)	43,435
Change in fair value of embedded derivatives	(50,646		)	(42,912		)	188,383			(77,876		)	(113,021		)
Amortization of deferred policy acquisition costs	56,500			22,063			(3,349		)	(1,242		)	58,319
Other operating costs and expenses	—			—			—			—			2,212
Increase (decrease) in total benefits and expenses	44,540			(6,270		)	181,148			(89,867		)	(9,055		)
Increase (decrease) in income (loss) before income taxes	65,556			25,687			(6,120		)	3,413			71,690
Increase (decrease) in income tax expense	22,641			6,201			(2,287		)	1,702			24,431
Increase (decrease) in net income (loss)	$	42,915		$	19,486		$	(3,833	)	$	1,711		$	47,259

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - March 31, 2015

Capitalization/Book Value per Share



	March 31, 2015			December 31, 2014
	(Dollars in thousands, except per share data)
Capitalization:
Notes payable:
September 2015 Notes	$	21,919		$	21,679
July 2021 Notes	400,000			400,000
Subordinated debentures payable to subsidiary trusts	246,293			246,243
Total debt	668,212			667,922
Total stockholders’ equity	2,326,720			2,139,876
Total capitalization	2,994,932			2,807,798
Accumulated other comprehensive income (AOCI)	(893,738		)	(721,401		)
Total capitalization excluding AOCI (a)	$	2,101,194		$	2,086,397

Total stockholders’ equity	$	2,326,720		$	2,139,876
Accumulated other comprehensive income	(893,738		)	(721,401		)
Total stockholders’ equity excluding AOCI (a)	$	1,432,982		$	1,418,475

Common shares outstanding (b)	76,911,299			76,605,527

Book Value per Share: (c)
Book value per share including AOCI	$	30.25		$	27.93
Book value per share excluding AOCI (a)	$	18.63		$	18.52

Debt-to-Capital Ratios: (d)
Senior debt / Total capitalization	20.1		%	20.2		%
Adjusted debt / Total capitalization	20.1		%	20.2		%


(a)	Total capitalization, total stockholders’ equity and book value per share excluding AOCI, non-GAAP financial measures, are based on stockholders’ equity excluding the effect of AOCI. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments, we believe these non-GAAP financial measures provide useful supplemental information.


(b)	Common shares outstanding include shares held by the NMO Deferred Compensation Trust: 2015 - 230,012 shares; 2014 - 543,120 shares


(c)	Book value per share including and excluding AOCI is calculated as total stockholders’ equity and total stockholders’ equity excluding AOCI divided by the total number of shares of common stock outstanding.


(d)	Debt-to-capital ratios are computed using total capitalization excluding AOCI. Adjusted debt includes notes payable and the portion of the total subordinated debentures payable to subsidiary trusts outstanding (qualifying trust preferred securities) that exceeds 15% of total capitalization excluding AOCI.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - March 31, 2015

Spread Results



	Three Months Ended March 31,
	2015	2014
Average yield on invested assets	4.74%	4.95%
Aggregate cost of money	1.97%	2.18%
Aggregate investment spread	2.77%	2.77%

Impact of:
Investment yield - additional prepayment income	0.01%	0.05%
Cost of money effect of over hedging	0.07%	—%

Weighted average investments (in thousands)	$33,812,366	$30,002,658

Weighted average investments include fixed maturity securities at amortized cost and equity securities at cost. The numerator for average yield on invested assets includes net investment income and the tax effect of investment income that is exempt from income taxes.

Summary of Cost of Money for Deferred Annuities



	Three Months Ended March 31,
	2015			2014
	(Dollars in thousands)
Included in interest sensitive and index product benefits:
Index credits	$	197,603		$	230,378
Interest credited	63,048			69,827
Included in change in fair value of derivatives:
Proceeds received at option expiration	(202,582		)	(227,958		)
Pro rata amortization of option cost	118,801			102,024
Cost of money for deferred annuities	$	176,870		$	174,271

Weighted average liability balance outstanding (in thousands)	$	35,917,036		$	31,928,538

Annuity Account Balance Rollforward



	Three Months Ended March 31,
	2015			2014
	(Dollars in thousands)
Account balances at beginning of period	$	35,363,041		$	31,535,846
Net deposits	1,202,798			865,405
Premium bonuses	93,590			72,687
Fixed interest credited and index credits	260,651			300,205
Surrender charges	(11,554		)	(12,423		)
Lifetime income benefit rider fees	(17,128		)	(12,849		)
Surrenders, withdrawals, deaths, etc.	(420,364		)	(427,639		)
Account balances at end of period	$	36,471,034		$	32,321,232

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - March 31, 2015

Annuity Deposits by Product Type



	Three Months Ended March 31,				Year Ended December 31,
Product Type	2015		2014		2014
	(Dollars in thousands)
Fixed index annuities	$	1,227,240	$	845,804	$	3,999,439
Annual reset fixed rate annuities	11,050		15,240		57,273
Multi-year fixed rate annuities	69,502		54,587		103,293
Single premium immediate annuities	8,532		5,286		24,580
Total before coinsurance ceded	1,316,324		920,917		4,184,585
Coinsurance ceded	104,994		50,226		171,124
Net after coinsurance ceded	$	1,211,330	$	870,691	$	4,013,461

Surrender Charge Protection and Account Values by Product Type

Annuity Surrender Charges and Net (of coinsurance) Account Values at March 31, 2015:



	Surrender Charge			Net Account Value
Product Type	Avg. Years At Issue	Avg. Years Remaining	Avg. % Remaining	Dollars in Thousands		%

Fixed Index Annuities	14.0	9.5	15.1%	$	34,524,781	94.7	%
Annual Reset Fixed Rate Annuities	11.0	4.0	7.8%	1,428,602		3.9	%
Multi-Year Fixed Rate Annuities (a)	6.3	1.5	4.1%	517,651		1.4	%
Total	13.8	9.2	14.6%	$	36,471,034	100.0	%


(a)	32% of Net Account Value is no longer in multi-year guarantee period and can be adjusted annually.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - March 31, 2015

Annuity Liability Characteristics



	Fixed Annuities Account Value		Fixed Index Annuities Account Value
	(Dollars in thousands)
SURRENDER CHARGE PERCENTAGES:
No surrender charge	$	671,760	$	1,175,476
0.0% < 2.0%	37,389		310,059
2.0% < 3.0%	96,878		77,505
3.0% < 4.0%	18,045		666,526
4.0% < 5.0%	89,393		143,751
5.0% < 6.0%	95,967		558,771
6.0% < 7.0%	167,435		158,664
7.0% < 8.0%	51,481		586,982
8.0% < 9.0%	78,671		600,200
9.0% < 10.0%	58,487		626,584
10.0% or greater	580,747		29,620,263
	$	1,946,253	$	34,524,781



	Fixed and Fixed Index Annuities Account Value		Weighted Average Surrender Charge
	(Dollars in thousands)
SURRENDER CHARGE EXPIRATION BY YEAR:
Out of Surrender Charge	$	1,847,236	0.00	%
2015	403,544		2.06	%
2016	739,843		3.07	%
2017	896,962		4.52	%
2018	806,987		6.84	%
2019	592,594		8.02	%
2020	928,840		9.58	%
2021	1,197,983		11.22	%
2022	2,014,676		13.24	%
2023	5,022,518		15.12	%
2024	5,532,382		15.97	%
2025	3,627,506		16.73	%
2026	2,731,788		17.99	%
2027	2,864,781		18.42	%
2028	2,526,891		18.88	%
2029	2,189,674		19.35	%
2030	1,986,254		19.87	%
2031	560,328		19.99	%
2032	247		20.00	%
	$	36,471,034	14.64	%

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - March 31, 2015

Annuity Liability Characteristics



	Fixed Annuities Account Value		Fixed Index Annuities Account Value
	(Dollars in thousands)
CREDITED RATE VS. ULTIMATE MINIMUM GUARANTEED RATE DIFFERENTIAL:
No differential	$	900,033	$	1,126,719
› 0.0% - 0.25%	245,766		46,734
› 0.25% - 0.5%	173,834		311,145
› 0.5% - 1.0%	182,262		580,722
› 1.0% - 1.5%	76,457		9,095
› 1.5% - 2.0%	46,949		1,151
› 2.0% - 2.5%	76		—
1.00% ultimate guarantee - 2.47% wtd avg interest rate (a)	102,135		—
1.50% ultimate guarantee - 1.54% wtd avg interest rate (a)	116,621		3,201,252
2.00% ultimate guarantee - 2.4% wtd avg interest rate (a)	102,120		—
2.25% ultimate guarantee - 2.41% wtd avg interest rate (a)	—		1,246,682
3.00% ultimate guarantee - 2.63% wtd avg interest rate (a)	—		2,460,198
Allocated to index strategies (see tables that follow)	—		25,541,083
	$	1,946,253	$	34,524,781


(a)	The minimum guaranteed interest rate for the fixed rate or the fixed rate strategy is 1.00%. The ultimate guaranteed rate is applied on less than 100% of the premium.

If all crediting rates were reduced to minimum guaranteed rates (subject to limitations imposed by ultimate minimum guaranteed rates where applicable) the weighted average crediting rate as of March 31, 2015 for fixed annuities and funds allocated to the fixed rate strategy for fixed index annuities would decrease by 0.43%.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - March 31, 2015

Annuity Liability Characteristics

FIXED INDEX ANNUITIES ACCOUNT VALUE - INDEX STRATEGIES



Annual Monthly Average and Point-to-Point with Caps
	Minimum Guaranteed Cap
	1%		3%		4%		7%		8% +
Current Cap	(Dollars in thousands)
At minimum	$	1,039	$	10,729	$	1,131,705	$	52,188	$	277,096
1.75% - 3%	1,187,299		—		—		—		—
3% - 4%	3,374,630		77,439		—		—		—
4% - 5%	25,018		68,466		1,463,743		—		—
5% - 6%	122,758		29,616		5,135,661		—		—
6% - 7%	—		—		139,849		—		—
>= 7%	—		14,028		1,412		89,396		22,089



Annual Monthly Average and Point-to-Point with Participation Rates
	Minimum Guaranteed Participation Rate
	10%		25%		35%		50% +
Current Participation Rate	(Dollars in thousands)
At minimum	$	490	$	316,524	$	167,170	$	197,818
< 20%	283,972		—		—		—
20% - 40%	463,971		431,067		—		—
40% - 60%	6,105		149,915		111,640		1,253
>= 60%	5,359		—		—		—



S&P 500 Monthly Point-to-Point - Minimum Guaranteed Monthly Cap = 1%
(Dollars in thousands)
Current Cap
At minimum	$	17,912
1.4% - 1.9%	6,456,459
2.0% - 2.3%	2,938,520
>= 2.4%	233,917



Volatility Control Index
(Dollars in thousands)
Current Asset Fee
At Maximum	$	—
1.00% - 1.75%	19,177
2.25% - 2.75%	452,981
3.00%	22,068

If all caps and participation rates were reduced to minimum caps and participation rates and current asset fees were increased to their maximums, the cost of options would decrease by 0.61% based upon prices of options for the week ended April 21, 2015.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - March 31, 2015

Summary of Invested Assets



	March 31, 2015				December 31, 2014
	Carrying Amount		Percent		Carrying Amount		Percent
	(Dollars in thousands)
Fixed maturity securities:
United States Government full faith and credit	$	38,527	0.1	%	$	138,460	0.4	%
United States Government sponsored agencies	1,421,364		3.8	%	1,393,890		3.9	%
United States municipalities, states and territories	3,809,862		10.1	%	3,723,309		10.4	%
Foreign government obligations	227,541		0.6	%	193,803		0.5	%
Corporate securities	22,828,373		60.7	%	21,566,724		59.9	%
Residential mortgage backed securities	1,729,315		4.6	%	1,751,345		4.9	%
Commercial mortgage backed securities	3,165,829		8.4	%	2,807,620		7.8	%
Other asset backed securities	1,059,309		2.8	%	946,483		2.6	%
Total fixed maturity securities	34,280,120		91.1	%	32,521,634		90.4	%
Equity securities	7,849		—	%	7,805		—	%
Mortgage loans on real estate	2,433,757		6.5	%	2,434,580		6.8	%
Derivative instruments	610,764		1.6	%	731,113		2.0	%
Other investments	285,177		0.8	%	286,726		0.8	%
	$	37,617,667	100.0	%	$	35,981,858	100.0	%

Credit Quality of Fixed Maturity Securities - March 31, 2015



NAIC Designation	Carrying Amount		Percent		Rating Agency Rating	Carrying Amount		Percent
	(Dollars in thousands)					(Dollars in thousands)
1	$	22,027,864	64.3	%	Aaa/Aa/A	$	21,697,202	63.3	%
2	11,565,940		33.7	%	Baa	11,171,154		32.6	%
3	664,888		1.9	%	Ba	668,898		2.0	%
4	21,074		0.1	%	B	83,005		0.2	%
5	—		—	%	Caa and lower	475,061		1.4	%
6	354		—	%	In or near default	184,800		0.5	%
	$	34,280,120	100.0	%		$	34,280,120	100.0	%

Watch List Securities - March 31, 2015



General Description	Amortized Cost		Unrealized Gains (Losses)			Fair Value		Months Below Amortized Cost
	(Dollars in thousands)
Corporate bonds:
Finance	$	20,000	$	(3,430	)	$	16,570	43
Industrial	64,000		(19,315		)	44,685		7 - 25
Energy	13,030		(5,244		)	7,786		22
	97,030		(27,989		)	69,041
Other asset backed securities	4,846		(969		)	3,877		48
	$	101,876	$	(28,958	)	$	72,918

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - March 31, 2015

Fixed Maturity Securities by Sector



	March 31, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(Dollars in thousands)
Available for sale:
United States Government full faith and credit and sponsored agencies	$	1,421,590	$	1,459,891	$	1,502,134	$	1,532,350
United States municipalities, states and territories	3,345,258		3,809,862		3,293,551		3,723,309
Foreign government obligations	210,918		227,541		181,128		193,803
Corporate securities:
Consumer discretionary	1,749,095		1,904,929		1,677,362		1,800,455
Consumer staples	1,453,182		1,588,283		1,376,634		1,489,951
Energy	2,450,071		2,558,343		2,307,432		2,378,038
Financials	4,221,796		4,610,598		3,928,295		4,246,882
Health care	1,782,315		1,968,906		1,742,218		1,884,132
Industrials	2,623,145		2,884,227		2,537,927		2,746,752
Information technology	1,365,790		1,453,636		1,324,095		1,388,990
Materials	1,653,741		1,745,528		1,589,219		1,654,125
Telecommunications	530,520		568,351		509,913		542,055
Utilities	3,034,656		3,469,081		2,991,652		3,358,901
Residential mortgage backed securities:
Government agency	691,224		779,094		689,378		759,902
Prime	644,569		685,663		683,206		721,454
Alt-A	235,755		264,558		244,262		269,989
Commercial mortgage backed securities:
Government agency	301,451		325,662		299,288		320,343
Other	2,715,563		2,840,167		2,421,006		2,487,277
Other asset backed securities:
Consumer discretionary	70,426		72,246		71,081		73,298
Energy	8,219		9,618		8,230		9,459
Financials	742,704		768,419		628,464		649,388
Industrials	171,644		186,074		177,864		190,217
Telecommunications	13,788		15,213		14,837		16,139
Utilities	5,899		7,739		5,870		7,982
Redeemable preferred stock - financials	—		12		—		11
	$	31,443,319	$	34,203,641	$	30,205,046	$	32,445,202
Held for investment:
Corporate security - financials	$	76,479	$	82,984	$	76,432	$	75,838

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - March 31, 2015

Mortgage Loans on Commercial Real Estate



	March 31, 2015						December 31, 2014
	Principal			Percent			Principal		Percent
	(Dollars in thousands)
Geographic distribution
East	$	714,054		29.1		%	$	701,638	28.5	%
Middle Atlantic	164,954			6.7		%	166,249		6.8	%
Mountain	279,605			11.4		%	279,075		11.4	%
New England	9,589			0.4		%	12,280		0.5	%
Pacific	301,176			12.3		%	302,307		12.3	%
South Atlantic	475,064			19.4		%	471,849		19.2	%
West North Central	341,682			13.9		%	349,028		14.2	%
West South Central	167,568			6.8		%	175,295		7.1	%
	$	2,453,692		100.0		%	$	2,457,721	100.0	%

Property type distribution
Office	$	457,690		18.7		%	$	484,585	19.7	%
Medical office	87,104			3.5		%	88,275		3.6	%
Retail	712,473			29.0		%	711,775		29.0	%
Industrial/Warehouse	664,136			27.1		%	649,425		26.4	%
Hotel	22,519			0.9		%	30,640		1.3	%
Apartment	353,693			14.4		%	335,087		13.6	%
Mixed use/other	156,077			6.4		%	157,934		6.4	%
	$	2,453,692		100.0		%	$	2,457,721	100.0	%

	March 31, 2015			December 31, 2014
Credit Exposure - By Payment Activity
Performing	$	2,436,604		$	2,451,760
In workout	9,928			—
Delinquent	2,316			—
Collateral dependent	4,844			5,961
	2,453,692			2,457,721
Specific loan loss allowance	(12,452		)	(12,333		)
General loan loss allowance	(7,000		)	(10,300		)
Deferred prepayment fees	(483		)	(508		)
	$	2,433,757		$	2,434,580

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - March 31, 2015

Shareholder Information

Corporate Offices:

American Equity Investment Life Holding Company

6000 Westown Parkway

West Des Moines, IA 50266

Inquiries:

John M. Matovina, Chief Executive Officer and President

(515) 457-1813, jmatovina@american-equity.com

Ted M. Johnson, Chief Financial Officer and Treasurer

(515) 457-1980, tjohnson@american-equity.com

Debra J. Richardson, Executive Vice President and Secretary

(515) 273-3551, drichardson@american-equity.com

Common Stock and Dividend Information:

New York Stock Exchange symbol: “AEL”



	High	Low	Close	Dividend Declared
2015
First Quarter	$29.62	$25.46	$29.13	$0.00

2014
First Quarter	$26.42	$18.84	$23.62	$0.00
Second Quarter	$25.15	$20.97	$24.60	$0.00
Third Quarter	$25.25	$21.69	$22.88	$0.00
Fourth Quarter	$29.75	$21.36	$29.19	$0.20

2013
First Quarter	$15.03	$12.33	$14.89	$0.00
Second Quarter	$16.60	$14.03	$15.70	$0.00
Third Quarter	$21.42	$15.64	$21.22	$0.00
Fourth Quarter	$26.46	$20.01	$26.38	$0.18

Transfer Agent:

Computershare Trust Company, N.A.

P.O. Box 43010

Providence, RI 02940-0310

Phone: (877) 282-1169

Fax: (781) 575-2723

www.computershare.com

Annual Report and Other Information:

Shareholders may receive when available, without charge, a copy of American Equity’s Annual Report, SEC filings and/or press releases by calling Julie L. LaFollette, Investor Relations, at (515) 273-3602 or by visiting our web site at www.american-equity.com.

Page 17

Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - March 31, 2015

Research Analyst Coverage

Steven Schwartz

Raymond James & Associates, Inc.

(312) 612-7686

steven.schwartz@raymondjames.com

Randy Binner

Friedman, Billings, Ramsey & Co., Inc.

(703) 312-1890

rbinner@fbr.com

Mark Hughes

SunTrust Robinson Humphrey

(615) 748-5680

mark_hughes@rhco.com

Colin Devine

Jefferies LLC

(212) 707-6327

cdevine@jefferies.com

Page 18

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