Athene Holding Ltd - FORM 8-K - EX-99.2 - EXHIBIT 99.2

Attached files

file	filename
EX-99.1 - EXHIBIT 99.1 - Athene Holding Ltd	q12020pressrelease.htm
8-K - 8-K - Athene Holding Ltd	a8kq12020pr.htm



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

ASSETS
Investments (GAAP view)	10
Net Invested Assets (Management view)	11
Investment Funds (GAAP view)	12
Net Alternative Investments (Management view)	13
Funds Withheld at Interest (GAAP view)	14
Segment Net Investment Earned Rates (NIER)	15
NIERs by Asset Class & Apollo Investment	16
Credit Quality of Securities & Net Invested Assets	17

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

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

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



Financial Highlights Unaudited (in millions, except percentages and per share data)
	Quarterly Trends															Δ				Year-to-Date						Δ
	1Q’19			2Q’19			3Q’19			4Q’19			1Q’20			Q/Q		Y/Y		2019			2020			Y/Y
SELECTED INCOME STATEMENT DATA
Net income (loss) available to AHL common shareholders	$	708		$	720		$	276		$	432		$	(1,065	)	NM		NM		$	708		$	(1,065	)	NM
Adjusted operating income (loss) available to common shareholders	287			370			243			389			(108		)	NM		NM		287			(108		)	NM
Adjusted operating income (loss) available to common shareholders excluding notables and AOG	287			370			305			346			174			(50	)%	(39	)%	287			174			(39	)%

FINANCIAL RATIOS
Return on assets (ROA)	2.19		%	2.12		%	0.78		%	1.19		%	(2.95		)%	NM		NM		2.19		%	(2.95		)%	NM
Adjusted operating ROA	1.02		%	1.28		%	0.82		%	1.34		%	(0.36		)%	NM		NM		1.02		%	(0.36		)%	NM
Adjusted operating ROA, excluding notables and AOG	1.02		%	1.28		%	1.03		%	1.19		%	0.59		%	(60)bps		(43)bps		1.02		%	0.59		%	(43)bps
Net investment spread – Retirement Services	1.36		%	1.68		%	1.13		%	1.84		%	1.03		%	(81)bps		(33)bps		1.36		%	1.03		%	(33)bps
Return on equity (ROE)	30.8		%	25.6		%	8.5		%	12.8		%	(36.5		)%	NM		NM		30.8		%	(36.5		)%	NM
Adjusted operating ROE	12.8		%	16.2		%	10.6		%	16.7		%	(4.4		)%	NM		NM		12.8		%	(4.4		)%	NM
Adjusted operating ROE, excluding notables and AOG	12.8		%	16.2		%	13.3		%	14.9		%	7.6		%	NM		NM		12.8		%	7.6		%	NM
Adjusted operating ROE – Retirement Services	14.4		%	18.9		%	13.5		%	21.6		%	10.6		%	NM		NM		14.4		%	10.6		%	NM

EARNINGS AND BOOK VALUE PER COMMON SHARE
Earnings (loss) per common share – basic class A¹	$	3.65		$	3.76		$	1.50		$	2.43		$	(5.81	)	NM		NM		$	3.65		$	(5.81	)	NM
Earnings (loss) per common share – diluted class A²	3.64			3.75			1.50			2.42			(5.81		)	NM		NM		3.64			(5.81		)	NM
Adjusted operating earnings (loss) per common share³	1.50			1.95			1.34			2.21			(0.60		)	NM		NM		1.50			(0.60		)	NM
Adjusted operating earnings (loss) per common share excluding notables and AOG	1.50			1.95			1.67			1.97			1.00			(49	)%	(33	)%	1.50			1.00			(33	)%
Book value per common share	52.12			66.69			74.20			76.21			51.28			(33	)%	(2	)%	52.12			51.28			(2	)%
Adjusted book value per common share³	47.30			49.50			50.74			54.02			51.07			(5	)%	8	%	47.30			51.07			8	%

SELECTED BALANCE SHEET DATA
Total assets	$	132,857		$	138,980		$	144,202		$	146,875		$	142,179		(3	)%	7	%	$	132,857		$	142,179		7	%
Gross invested assets	113,771			116,671			121,140			124,563			128,263			3	%	13	%	113,771			128,263			13	%
Invested assets – ACRA noncontrolling interests	—			—			—			(7,077		)	(7,063		)	—	%	NM		—			(7,063		)	NM
Net invested assets	113,771			116,671			121,140			117,486			121,200			3	%	7	%	113,771			121,200			7	%
Total liabilities	122,740			126,615			130,657			132,734			131,649			(1	)%	7	%	122,740			131,649			7	%
Net reserve liabilities	111,791			114,680			118,825			114,652			114,273			—	%	2	%	111,791			114,273			2	%
Debt	991			991			992			1,467			1,386			(6	)%	40	%	991			1,386			40	%
Total AHL shareholders’ equity	10,117			12,365			13,545			13,391			9,940			(26	)%	(2	)%	10,117			9,940			(2	)%
Adjusted AHL common shareholders’ equity	9,102			9,127			9,204			9,445			10,097			7	%	11	%	9,102			10,097			11	%

DEPOSITS
Retail	$	1,816		$	1,909		$	1,921		$	1,136		$	1,246		10	%	(31	)%	$	1,816		$	1,246		(31	)%
Flow reinsurance	1,020			1,125			609			1,196			861			(28	)%	(16	)%	1,020			861			(16	)%
Funding agreements	—			299			503			499			823			65	%	NM		—			823			NM
Pension risk transfer	1,923			706			2,604			809			1,017			26	%	(47	)%	1,923			1,017			(47	)%
Gross organic deposits	4,759			4,039			5,637			3,640			3,947			8	%	(17	)%	4,759			3,947			(17	)%
Gross inorganic deposits	—			—			—			—			—			NM		NM		—			—			NM
Gross deposits	4,759			4,039			5,637			3,640			3,947			8	%	(17	)%	4,759			3,947			(17	)%
Deposits attributable to ACRA noncontrolling interest⁴	—			—			—			(544		)	—			NM		NM		—			—			NM
Net deposits	$	4,759		$	4,039		$	5,637		$	3,096		$	3,947		27	%	(17	)%	$	4,759		$	3,947		(17	)%

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



Condensed Consolidated Statements of Income (GAAP view) Unaudited (in millions, except percentages)
	Quarterly Trends												Δ				Year-to-Date					Δ
	1Q’19		2Q’19		3Q’19			4Q’19		1Q’20			Q/Q		Y/Y		2019		2020			Y/Y
REVENUE
Premiums	$	2,000	$	787	$	2,688		$	907	$	1,140		26	%	(43	)%	$	2,000	$	1,140		(43	)%
Product charges	125		132		135			132		140			6	%	12	%	125		140			12	%
Net investment income	1,082		1,182		1,090			1,242		745			(40	)%	(31	)%	1,082		745			(31	)%
Investment related gains (losses)	1,776		1,313		665			965		(3,572		)	NM		NM		1,776		(3,572		)	NM
Other revenues	12		9		6			10		(2		)	NM		NM		12		(2		)	NM
Total revenues	$	4,995	$	3,423	$	4,584		$	3,256	$	(1,549	)	NM		NM		$	4,995	$	(1,549	)	NM

BENEFITS AND EXPENSES
Interest sensitive contract benefits	$	1,516	$	1,094	$	801		$	1,146	$	(1,319	)	NM		NM		$	1,516	$	(1,319	)	NM
Amortization of deferred sales inducements	5		13		20			36		10			(72	)%	100	%	5		10			100	%
Future policy and other policy benefits	2,329		1,111		2,955			1,192		1,356			14	%	(42	)%	2,329		1,356			(42	)%
Amortization of deferred acquisition costs and value of business acquired	231		261		323			143		(413		)	NM		NM		231		(413		)	NM
Dividends to policyholders	9		9		12			6		11			83	%	22	%	9		11			22	%
Policy and other operating expenses	165		185		194			200		188			(6	)%	14	%	165		188			14	%
Total benefits and expenses	4,255		2,673		4,305			2,723		(167		)	NM		NM		4,255		(167		)	NM
Income (loss) before income taxes	740		750		279			533		(1,382		)	NM		NM		740		(1,382		)	NM
Income tax expense (benefit)	32		30		(14		)	69		(166		)	NM		NM		32		(166		)	NM
Net income (loss)	708		720		293			464		(1,216		)	NM		NM		708		(1,216		)	NM
Less: Net income (loss) attributable to noncontrolling interests	—		—		—			13		(169		)	NM		NM		—		(169		)	NM
Net income (loss) attributable to Athene Holding Ltd. shareholders	708		720		293			451		(1,047		)	NM		NM		708		(1,047		)	NM
Less: Preferred stock dividends	—		—		17			19		18			(5	)%	NM		—		18			NM
Net income (loss) available to Athene Holding Ltd. common shareholders	$	708	$	720	$	276		$	432	$	(1,065	)	NM		NM		$	708	$	(1,065	)	NM



Segment Results of Operations (Management view) Unaudited (in millions, except percentages and per share data)
	Quarterly Trends															Δ				Year-to-Date						Δ
	1Q’19			2Q’19			3Q’19			4Q’19			1Q’20			Q/Q		Y/Y		2019			2020			Y/Y
CONSOLIDATED
Fixed income and other investment income	$	1,154		$	1,175		$	1,168		$	1,185		$	1,188		—	%	3	%	$	1,154		$	1,188		3	%
Alternative investment income	49			170			124			154			(37		)	NM		NM		49			(37		)	NM
Net investment earnings	1,203			1,345			1,292			1,339			1,151			(14	)%	(4	)%	1,203			1,151			(4	)%
Cost of crediting	(535		)	(547		)	(576		)	(521		)	(540		)	(4	)%	(1	)%	(535		)	(540		)	(1	)%
Other liability costs¹	(260		)	(295		)	(358		)	(259		)	(342		)	(32	)%	(32	)%	(260		)	(342		)	(32	)%
Cost of funds	(795		)	(842		)	(934		)	(780		)	(882		)	(13	)%	(11	)%	(795		)	(882		)	(11	)%
Operating expenses	(82		)	(87		)	(79		)	(86		)	(79		)	8	%	4	%	(82		)	(79		)	4	%
Interest expense	(13		)	(12		)	(12		)	(17		)	(19		)	(12	)%	(46	)%	(13		)	(19		)	(46	)%
Management fees from ACRA	—			—			—			2			2			—	%	NM		—			2			NM
Pre-tax adjusted operating income	313			404			267			458			173			(62	)%	(45	)%	313			173			(45	)%
Income tax expense – operating²	(26		)	(34		)	(7		)	(50		)	(24		)	52	%	8	%	(26		)	(24		)	8	%
Adjusted operating income	287			370			260			408			149			(63	)%	(48	)%	287			149			(48	)%
Preferred stock dividends	—			—			(17		)	(19		)	(18		)	5	%	NM		—			(18		)	NM
Adjusted operating income available to common shareholders excluding Apollo	287			370			243			389			131			(66	)%	(54	)%	287			131			(54	)%
Change in fair value of Apollo investment, net of tax³	—			—			—			—			(239		)	NM		NM		—			(239		)	NM
Adjusted operating income (loss) available to common shareholders	$	287		$	370		$	243		$	389		$	(108	)	NM		NM		$	287		$	(108	)	NM

Adjusted operating earnings (loss) per common share	$	1.50		$	1.95		$	1.34		$	2.21		$	(0.60	)	NM		NM		$	1.50		$	(0.60	)	NM

RETIREMENT SERVICES
Fixed income and other investment income	$	1,151		$	1,170		$	1,159		$	1,172		$	1,177		—	%	2	%	$	1,151		$	1,177		2	%
Alternative investment income	20			151			105			134			7			(95	)%	(65	)%	20			7			(65	)%
Net investment earnings	1,171			1,321			1,264			1,306			1,184			(9	)%	1	%	1,171			1,184			1	%
Cost of crediting	(535		)	(547		)	(576		)	(521		)	(540		)	(4	)%	(1	)%	(535		)	(540		)	(1	)%
Other liability costs¹	(260		)	(295		)	(358		)	(259		)	(342		)	(32	)%	(32	)%	(260		)	(342		)	(32	)%
Cost of funds	(795		)	(842		)	(934		)	(780		)	(882		)	(13	)%	(11	)%	(795		)	(882		)	(11	)%
Operating expenses	(62		)	(68		)	(67		)	(69		)	(68		)	1	%	(10	)%	(62		)	(68		)	(10	)%
Interest expense	(2		)	(1		)	—			(5		)	(8		)	(60	)%	NM		(2		)	(8		)	NM
Management fees from ACRA	—			—			—			2			2			—	%	NM		—			2			NM
Pre-tax adjusted operating income	312			410			263			454			228			(50	)%	(27	)%	312			228			(27	)%
Income tax expense – operating	(26		)	(34		)	(7		)	(50		)	(24		)	52	%	8	%	(26		)	(24		)	8	%
Adjusted operating income available to common shareholders	$	286		$	376		$	256		$	404		$	204		(50	)%	(29	)%	$	286		$	204		(29	)%

CORPORATE & OTHER
Fixed income and other investment income	$	3		$	5		$	9		$	13		$	11		(15	)%	267	%	$	3		$	11		267	%
Alternative investment income (loss)	29			19			19			20			(44		)	NM		NM		29			(44		)	NM
Net investment earnings (loss)	32			24			28			33			(33		)	NM		NM		32			(33		)	NM
Operating expenses	(20		)	(19		)	(12		)	(17		)	(11		)	35	%	45	%	(20		)	(11		)	45	%
Interest expense	(11		)	(11		)	(12		)	(12		)	(11		)	8	%	—	%	(11		)	(11		)	—	%
Adjusted operating income (loss)	1			(6		)	4			4			(55		)	NM		NM		1			(55		)	NM
Preferred stock dividends	—			—			(17		)	(19		)	(18		)	5	%	NM		—			(18		)	NM
Adjusted operating income (loss) available to common shareholders excluding Apollo	1			(6		)	(13		)	(15		)	(73		)	NM		NM		1			(73		)	NM
Change in fair value of Apollo investment, net of tax³	—			—			—			—			(239		)	NM		NM		—			(239		)	NM
Adjusted operating income (loss) available to common shareholders	$	1		$	(6	)	$	(13	)	$	(15	)	$	(312	)	NM		NM		$	1		$	(312	)	NM

Note: Please refer to Notes to the Financial Supplement section and the Non-GAAP Measure Reconciliations for discussion on adjusted operating income available to common shareholders and adjusted operating earnings per common share. 1 Other liability costs primarily includes DAC, DSI and VOBA amortization and rider reserve changes for all products, the cost of liabilities on products other than deferred annuities and institutional costs including offsets for premiums, product charges and other revenues. 2 Income tax expense - operating excludes the income tax expense/benefit on the earnings from our investment in Apollo. 3 Change in fair value of Apollo investment, net of tax, including both the change in our investment in Apollo and the tax expense or benefit associated with the income or loss.



Reconciliation of Earnings Measures Unaudited (in millions, except percentages and per share data)
	Quarterly Trends															Δ				Year-to-Date						Δ
	1Q’19			2Q’19			3Q’19			4Q’19			1Q’20			Q/Q		Y/Y		2019			2020			Y/Y
RECONCILIATION OF NET INCOME (LOSS) AVAILABLE TO ATHENE HOLDING LTD. COMMON SHAREHOLDERS TO ADJUSTED OPERATING INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
Net income (loss) available to Athene Holding Ltd. common shareholders	$	708		$	720		$	276		$	432		$	(1,065	)	NM		NM		$	708		$	(1,065	)	NM
Non-operating adjustments
Realized gains (losses) on sale of AFS securities	12			41			46			26			12			(54	)%	—	%	12			12			—	%
Unrealized, allowances and other investment gains (losses)	29			10			(31		)	(12		)	(369		)	NM		NM		29			(369		)	NM
Change in fair value of reinsurance assets	616			570			314			(89		)	(1,277		)	NM		NM		616			(1,277		)	NM
Offsets to investment gains (losses)	(199		)	(204		)	(163		)	28			495			NM		NM		(199		)	495			NM
Investment gains (losses), net of offsets	458			417			166			(47		)	(1,139		)	NM		NM		458			(1,139		)	NM
Change in fair values of derivatives and embedded derivatives – FIAs, net of offsets	(27		)	(57		)	(117		)	136			65			(52	)%	NM		(27		)	65			NM
Integration, restructuring and other non-operating expenses	(1		)	(11		)	(34		)	(24		)	(4		)	83	%	NM		(1		)	(4		)	NM
Stock compensation expense	(3		)	(3		)	(3		)	(3		)	(10		)	NM		NM		(3		)	(10		)	NM
Income tax (expense) benefit – non-operating	(6		)	4			21			(19		)	131			NM		NM		(6		)	131			NM
Less: Total non-operating adjustments	421			350			33			43			(957		)	NM		NM		421			(957		)	NM
Adjusted operating income (loss) available to common shareholders	$	287		$	370		$	243		$	389		$	(108	)	NM		NM		$	287		$	(108	)	NM

RECONCILIATION OF BASIC EARNINGS (LOSS) PER CLASS A COMMON SHARES TO ADJUSTED OPERATING EARNINGS (LOSS) PER COMMON SHARE
Basic earnings (loss) per share – Class A common shares	$	3.65		$	3.76		$	1.50		$	2.43		$	(5.81	)	NM		NM		$	3.65		$	(5.81	)	NM
Non-operating adjustments
Realized gains (losses) on sale of AFS securities	0.06			0.21			0.25			0.15			0.07			(53	)%	17	%	0.06			0.07			17	%
Unrealized, allowances and other investment gains (losses)	0.16			0.05			(0.17		)	(0.07		)	(2.03		)	NM		NM		0.16			(2.03		)	NM
Change in fair value of reinsurance assets	3.20			3.01			1.72			(0.50		)	(7.04		)	NM		NM		3.20			(7.04		)	NM
Offsets to investment gains (losses)	(1.04		)	(1.07		)	(0.89		)	0.16			2.73			NM		NM		(1.04		)	2.73			NM
Investment gains (losses), net of offsets	2.38			2.20			0.91			(0.26		)	(6.27		)	NM		NM		2.38			(6.27		)	NM
Change in fair values of derivatives and embedded derivatives – FIAs, net of offsets	(0.14		)	(0.30		)	(0.65		)	0.77			0.36			(53	)%	NM		(0.14		)	0.36			NM
Integration, restructuring and other non-operating expenses	(0.01		)	(0.06		)	(0.18		)	(0.13		)	(0.03		)	77	%	NM		(0.01		)	(0.03		)	NM
Stock compensation expense	(0.01		)	(0.02		)	(0.02		)	(0.02		)	(0.05		)	NM		NM		(0.01		)	(0.05		)	NM
Income tax (expense) benefit – non-operating	(0.03		)	0.02			0.12			(0.11		)	0.72			NM		NM		(0.03		)	0.72			NM
Less: Total non-operating adjustments	2.19			1.84			0.18			0.25			(5.27		)	NM		NM		2.19			(5.27		)	NM
Effect of items convertible to or settled in Class A common shares	(0.04		)	(0.03		)	(0.02		)	(0.03		)	0.06			NM		NM		(0.04		)	0.06			NM
Adjusted operating earnings (loss) per common share	$	1.50		$	1.95		$	1.34		$	2.21		$	(0.60	)	NM		NM		$	1.50		$	(0.60	)	NM

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



Retirement Services Segment Highlights Unaudited (in millions, except percentages)
	Quarterly Trends															Δ				Year-to-Date						Δ
	1Q’19			2Q’19			3Q’19			4Q’19			1Q’20			Q/Q		Y/Y		2019			2020			Y/Y
NET INVESTMENT SPREAD – RETIREMENT SERVICES
Net investment earned rate	4.21		%	4.63		%	4.31		%	4.57		%	4.04		%	(53)bps		(17)bps		4.21		%	4.04		%	(17)bps
Cost of crediting	1.92		%	1.92		%	1.96		%	1.83		%	1.84		%	1bps		(8)bps		1.92		%	1.84		%	(8)bps
Other liability costs	0.93		%	1.03		%	1.22		%	0.90		%	1.17		%	27bps		24bps		0.93		%	1.17		%	24bps
Cost of funds	2.85		%	2.95		%	3.18		%	2.73		%	3.01		%	28bps		16bps		2.85		%	3.01		%	16bps
Net investment spread	1.36		%	1.68		%	1.13		%	1.84		%	1.03		%	(81)bps		(33)bps		1.36		%	1.03		%	(33)bps

Average net invested assets	$	111,443		$	114,059		$	117,338		$	114,149		$	117,295		3	%	5	%	$	111,443		$	117,295		5	%

COST OF CREDITING – RETIREMENT SERVICES
FIA option costs	$	265		$	265		$	265		$	252		$	248		(2	)%	(6	)%	$	265		$	248		(6	)%
Fixed interest credited to policyholders	179			183			188			177			174			(2	)%	(3	)%	179			174			(3	)%
Cost of crediting on deferred annuities	444			448			453			429			422			(2	)%	(5	)%	444			422			(5	)%
Average account value on deferred annuities	89,809			90,675			91,467			87,660			88,119			1	%	(2	)%	89,809			88,119			(2	)%
Cost of crediting on deferred annuities rate	1.98		%	1.98		%	1.98		%	1.95		%	1.91		%	(4)bps		(7)bps		1.98		%	1.91		%	(7)bps

Cost of crediting on institutional products	$	91		$	99		$	123		$	92		$	118		28	%	30	%	$	91		$	118		30	%
Average institutional reserve liabilities	9,809			10,470			13,320			12,931			14,250			10	%	45	%	9,809			14,250			45	%
Cost of crediting on institutional products rate	3.69		%	3.76		%	3.68		%	2.85		%	3.31		%	46bps		(38)bps		3.69		%	3.31		%	(38)bps

Cost of crediting	$	535		$	547		$	576		$	521		$	540		4	%	1	%	$	535		$	540		1	%

OTHER LIABILITY COSTS – RETIREMENT SERVICES
Change in rider reserve	$	154		$	138		$	114		$	124		$	183		48	%	19	%	$	154		$	183		19	%
DAC, DSI and VOBA amortization	91			125			226			131			127			(3	)%	40	%	91			127			40	%
Other¹	15			32			18			4			32			NM		113	%	15			32			113	%
Other liability costs	$	260		$	295		$	358		$	259		$	342		32	%	32	%	$	260		$	342		32	%

INVESTMENT MARGIN ON DEFERRED ANNUITIES – RETIREMENT SERVICES
Net investment earned rate	4.21		%	4.63		%	4.31		%	4.57		%	4.04		%	(53)bps		(17)bps		4.21		%	4.04		%	(17)bps
Cost of crediting on deferred annuities	1.98		%	1.98		%	1.98		%	1.95		%	1.91		%	(4)bps		(7)bps		1.98		%	1.91		%	(7)bps
Investment margin on deferred annuities	2.23		%	2.65		%	2.33		%	2.62		%	2.13		%	(49)bps		(10)bps		2.23		%	2.13		%	(10)bps

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



Condensed Consolidated Balance Sheets Unaudited (in millions, except percentages)
	December 31, 2019		March 31, 2020		Δ
ASSETS
Investments
Available-for-sale securities, at fair value	$	71,374	$	65,671	(8	)%
Trading securities, at fair value	2,070		1,979		(4	)%
Equity securities, at fair value	247		206		(17	)%
Mortgage loans, net of allowances	14,306		14,395		1	%
Investment funds	750		740		(1	)%
Policy loans	417		403		(3	)%
Funds withheld at interest	15,181		13,716		(10	)%
Derivative assets	2,888		1,610		(44	)%
Short-term investments	596		583		(2	)%
Other investments	158		172		9	%
Total investments	107,987		99,475		(8	)%
Cash and cash equivalents	4,240		5,419		28	%
Restricted cash	402		564		40	%
Investments in related parties
Available-for-sale securities, at fair value	3,804		3,546		(7	)%
Trading securities, at fair value	785		718		(9	)%
Equity securities, at fair value	64		49		(23	)%
Mortgage loans, net of allowances	653		623		(5	)%
Investment funds	3,550		4,631		30	%
Funds withheld at interest	13,220		12,452		(6	)%
Other investments, net of allowances	487		475		(2	)%
Accrued investment income	807		802		(1	)%
Reinsurance recoverable	4,863		5,087		5	%
Deferred acquisition costs, deferred sales inducements and value of business acquired	5,008		6,392		28	%
Other assets	1,005		1,946		94	%
Total assets	$	146,875	$	142,179	(3	)%



Condensed Consolidated Balance Sheets, continued Unaudited (in millions, except percentages)
	December 31, 2019		March 31, 2020			Δ
LIABILITIES
Interest sensitive contract liabilities	$	102,745	$	101,911		(1	)%
Future policy benefits	23,330		23,741			2	%
Other policy claims and benefits	138		145			5	%
Dividends payable to policyholders	113		112			(1	)%
Short-term debt	475		400			(16	)%
Long-term debt	992		986			(1	)%
Derivative liabilities	97		222			129	%
Payables for collateral on derivatives and securities to repurchase	3,255		2,883			(11	)%
Funds withheld liability	408		396			(3	)%
Other liabilities	1,181		853			(28	)%
Total liabilities	132,734		131,649			(1	)%

EQUITY
Preferred stock	—		—			NM
Common stock	—		—			NM
Additional paid-in-capital	4,171		5,501			32	%
Retained earnings	6,939		5,613			(19	)%
Accumulated other comprehensive income (loss)	2,281		(1,174		)	NM
Total Athene Holding Ltd. shareholders’ equity	13,391		9,940			(26	)%
Noncontrolling interests	750		590			(21	)%
Total equity	14,141		10,530			(26	)%
Total liabilities and equity	$	146,875	$	142,179		(3	)%



Investments (GAAP view) Unaudited (in millions, except percentages)
	December 31, 2019				March 31, 2020
	Carrying Value		Percent of Total		Carrying Value		Percent of Total
INVESTMENTS AND INVESTMENTS IN RELATED PARTIES SUMMARY
Investments
Available-for-sale securities, at fair value
U.S. government and agencies	$	36	—	%	$	40	—	%
U.S. state, municipal and political subdivisions	1,541		1.2	%	909		0.7	%
Foreign governments	327		0.3	%	291		0.2	%
Corporate	47,228		36.2	%	44,468		36.5	%
CLO	7,349		5.6	%	6,641		5.5	%
ABS	5,118		3.9	%	4,563		3.8	%
CMBS	2,400		1.8	%	2,291		1.9	%
RMBS	7,375		5.7	%	6,468		5.3	%
Total available-for-sale securities, at fair value	71,374		54.7	%	65,671		53.9	%
Trading securities, at fair value	2,070		1.6	%	1,979		1.6	%
Equity securities, at fair value	247		0.2	%	206		0.2	%
Mortgage loans, net of allowances	14,306		11.0	%	14,395		11.8	%
Investment funds	750		0.6	%	740		0.6	%
Policy loans	417		0.3	%	403		0.3	%
Funds withheld at interest	15,181		11.6	%	13,716		11.3	%
Derivative assets	2,888		2.2	%	1,610		1.3	%
Short-term investments	596		0.5	%	583		0.5	%
Other investments	158		0.1	%	172		0.1	%
Total investments	107,987		82.8	%	99,475		81.6	%
Investments in related parties
Available-for-sale securities, at fair value
Corporate	19		—	%	19		—	%
CLO	936		0.7	%	1,040		0.9	%
ABS	2,849		2.2	%	2,487		2.0	%
Total available-for-sale securities, at fair value	3,804		2.9	%	3,546		2.9	%
Trading securities, at fair value	785		0.6	%	718		0.6	%
Equity securities, at fair value	64		—	%	49		—	%
Mortgage loans	653		0.5	%	623		0.5	%
Investment funds	3,550		2.7	%	4,631		3.8	%
Funds withheld at interest	13,220		10.1	%	12,452		10.2	%
Other investments	487		0.4	%	475		0.4	%
Total investments in related parties	22,563		17.2	%	22,494		18.4	%
Total investments including related parties	$	130,550	100.0	%	$	121,969	100.0	%



Net Invested Assets (Management view) Unaudited (in millions, except percentages)
	December 31, 2019				March 31, 2020
	Invested Asset Value¹		Percent of Total		Invested Asset Value¹		Percent of Total
NET INVESTED ASSETS
Corporate	$	55,077	46.9	%	$	54,666	45.1	%
CLO	10,223		8.7	%	11,118		9.2	%
Credit	65,300		55.6	%	65,784		54.3	%
RMBS	8,394		7.1	%	8,123		6.7	%
CML	14,038		12.0	%	14,954		12.3	%
RML	4,490		3.8	%	4,112		3.4	%
CMBS	2,930		2.5	%	2,846		2.3	%
Real estate	29,852		25.4	%	30,035		24.7	%
ABS	10,317		8.8	%	10,292		8.5	%
Alternative investments	5,586		4.8	%	5,787		4.8	%
State, municipal, political subdivisions and foreign government	2,260		1.9	%	1,557		1.3	%
Equity securities	365		0.3	%	369		0.3	%
Short-term investments	624		0.5	%	604		0.5	%
U.S. government and agencies	49		—	%	51		—	%
Other investments	19,201		16.3	%	18,660		15.4	%
Cash and equivalents	1,958		1.7	%	4,718		3.9	%
Policy loans and other	1,175		1.0	%	1,153		1.0	%
Net invested assets excluding investment in Apollo	117,486		100.0	%	120,350		99.3	%
Investment in Apollo	—		—	%	850		0.7	%
Net invested assets	$	117,486	100.0	%	$	121,200	100.0	%

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



Investment Funds (GAAP view) Unaudited (in millions, except percentages)
	December 31, 2019				March 31, 2020
	Carrying Value		Percent of Total		Carrying Value		Percent of Total
INVESTMENT FUNDS INCLUDING RELATED PARTIES¹
Investment funds
Real estate	$	277	6.4	%	$	284	5.3	%
Credit funds	153		3.6	%	122		2.3	%
Private equity	236		5.5	%	244		4.5	%
Real assets	83		2.0	%	89		1.7	%
Natural resources	1		—	%	1		—	%
Total investment funds	750		17.5	%	740		13.8	%
Investment funds – related parties
Differentiated investments
MidCap	547		12.7	%	508		9.5	%
AmeriHome	487		11.3	%	508		9.5	%
Catalina	271		6.3	%	296		5.5	%
Athora	132		3.1	%	130		2.4	%
Venerable	99		2.3	%	110		2.1	%
Other	222		5.2	%	281		5.2	%
Total differentiated investments	1,758		40.9	%	1,833		34.2	%
Real estate	853		19.8	%	775		14.4	%
Credit funds	370		8.6	%	446		8.3	%
Private equity	105		2.4	%	227		4.2	%
Real assets	182		4.2	%	256		4.8	%
Natural resources	163		3.8	%	200		3.7	%
Public equities	119		2.8	%	44		0.8	%
Investment in Apollo	—		—	%	850		15.8	%
Total investment funds – related parties	3,550		82.5	%	4,631		86.2	%
Total investment funds including related parties	$	4,300	100.0	%	$	5,371	100.0	%

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



Net Alternative Investments (Management view) Unaudited (in millions, except percentages)
	December 31, 2019				March 31, 2020
	Invested Asset Value¹		Percent of Total		Invested Asset Value¹		Percent of Total
NET ALTERNATIVE INVESTMENTS
Retirement Services
Differentiated investments
AmeriHome	$	595	10.7	%	$	621	10.7	%
MidCap	547		9.8	%	508		8.8	%
Catalina	271		4.9	%	296		5.1	%
Venerable	99		1.8	%	110		1.9	%
Other	208		3.7	%	332		5.7	%
Total differentiated investments	1,720		30.9	%	1,867		32.2	%
Real estate	1,430		25.6	%	1,410		24.4	%
Credit	968		17.3	%	950		16.4	%
Private equity	378		6.8	%	495		8.6	%
Real assets	349		6.2	%	385		6.6	%
Natural resources	51		0.9	%	61		1.1	%
Other	58		1.0	%	58		1.0	%
Total Retirement Services	4,954		88.7	%	5,226		90.3	%
Corporate & Other
Athora	140		2.5	%	140		2.4	%
Credit	128		2.3	%	88		1.5	%
Natural resources	245		4.4	%	289		5.0	%
Public equities²	119		2.1	%	44		0.8	%
Total Corporate & Other	632		11.3	%	561		9.7	%
Net alternative investments¹	$	5,586	100.0	%	$	5,787	100.0	%

Note: Net invested assets includes our economic ownership of ACRA investments but does not include the investments associated with the noncontrolling interest.
1 Net alternative investments does not correspond to the total investment funds, including related parties, on our condensed consolidated balance sheets. Net alternative investments adjusts the GAAP presentation to include CLO equity tranche securities that are included in trading securities in the GAAP view, a nonredeemable preferred stock viewed as an alternative investment for management view but included in equity securities for GAAP view, investment funds included in our funds withheld at interest reinsurance portfolios, royalties and other investments. Please refer to Notes to the Financial Supplement section for discussion on net invested assets including net alternative investments and the Non-GAAP Measure Reconciliations section for the reconciliation of investment funds, including related parties, to net alternative investments.
2 Public Equities include: OneMain Financial (OMF) - 2.8 million of shares as of March 31, 2020 and December 31, 2019.



Funds Withheld at Interest (GAAP view) Unaudited (in millions, except percentages)
	December 31, 2019					March 31, 2020
	Carrying Value			Percent of Total		Carrying Value			Percent of Total
FUNDS WITHHELD AT INTEREST INCLUDING RELATED PARTIES
Fixed maturity securities
U.S. government and agencies	$	15		0.1	%	$	15		0.1	%
U.S. state, municipal and political subdivisions	482			1.7	%	324			1.2	%
Foreign governments	143			0.5	%	134			0.5	%
Corporate	14,590			51.4	%	13,156			50.3	%
CLO	2,586			9.1	%	2,283			8.7	%
ABS	2,510			8.8	%	2,149			8.2	%
CMBS	756			2.7	%	475			1.8	%
RMBS	1,482			5.2	%	1,302			5.0	%
Total fixed maturity securities	22,564			79.5	%	19,838			75.8	%
Equity securities	74			0.3	%	61			0.2	%
Mortgage loans	4,357			15.3	%	4,411			16.9	%
Investment funds	807			2.8	%	927			3.6	%
Derivative assets	224			0.8	%	65			0.2	%
Short-term investments	157			0.6	%	127			0.5	%
Cash and cash equivalents	239			0.8	%	807			3.1	%
Other assets and liabilities	(21		)	(0.1	)%	(68		)	(0.3	)%
Total funds withheld at interest including related parties¹	$	28,401		100.0	%	$	26,168		100.0	%

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



Segment Net Investment Earned Rates (NIER) Unaudited (In millions, except percentages)
	Quarterly Trends															Δ				Year-to-Date						Δ
	1Q’19			2Q’19			3Q’19			4Q’19			1Q’20			Q/Q		Y/Y		2019			2020			Y/Y
NIER – CONSOLIDATED
Fixed income and other investments	4.28		%	4.26		%	4.11		%	4.29		%	4.20		%	(9)bps		(8)bps		4.28		%	4.20		%	(8)bps
Alternative investments	4.36		%	14.13		%	9.26		%	11.15		%	(2.58		)%	NM		NM		4.36		%	(2.58		)%	NM
Total net investment earned rate	4.28		%	4.67		%	4.35		%	4.62		%	3.87		%	(75)bps		(41)bps		4.28		%	3.87		%	(41)bps

NIER SUMMARY – RETIREMENT SERVICES
Fixed income and other investments	4.28		%	4.26		%	4.11		%	4.29		%	4.20		%	(9)bps		(8)bps		4.28		%	4.20		%	(8)bps
Alternative investments	2.13		%	14.46		%	8.90		%	10.94		%	0.56		%	NM		NM		2.13		%	0.56		%	NM
Total net investment earned rate	4.21		%	4.63		%	4.31		%	4.57		%	4.04		%	(53)bps		(17)bps		4.21		%	4.04		%	(17)bps

Fixed income and other investment income	$	1,151		$	1,170		$	1,159		$	1,172		$	1,177		—	%	2	%	$	1,151		$	1,177		2	%
Alternatives investment income	20			151			105			134			7			(95	)%	(65	)%	20			7			(65	)%
Total net investment earnings	$	1,171		$	1,321		$	1,264		$	1,306		$	1,184		(9	)%	1	%	$	1,171		$	1,184		1	%

Fixed income and other investments	$	107,641		$	109,888		$	112,611		$	109,250		$	112,205		3	%	4	%	$	107,641		$	112,205		4	%
Alternatives investments	3,802			4,171			4,727			4,899			5,090			4	%	34	%	3,802			5,090			34	%
Total average net invested assets	$	111,443		$	114,059		$	117,338		$	114,149		$	117,295		3	%	5	%	$	111,443		$	117,295		5	%

NIER SUMMARY – CORPORATE & OTHER
Fixed income and other investments	4.28		%	4.26		%	4.12		%	4.29		%	4.18		%	(11)bps		(10)bps		4.28		%	4.18		%	(10)bps
Alternative investments	17.66		%	11.96		%	11.95		%	12.82		%	(29.33		)%	NM		NM		17.66		%	(29.33		)%	NM
Total net investment earned rate	13.19		%	8.39		%	7.28		%	7.16		%	(8.14		)%	NM		NM		13.19		%	(8.14		)%	NM

Fixed income and other investment income	$	3		$	5		$	9		$	13		$	11		(15	)%	267	%	$	3		$	11		267	%
Alternatives investment income	29			19			19			20			(44		)	NM		NM		29			(44		)	NM
Total net investment earnings	$	32		$	24		$	28		$	33		$	(33	)	NM		NM		$	32		$	(33	)	NM

Fixed income and other investments	$	320		$	539		$	935		$	1,218		$	1,027		(16	)%	221	%	$	320		$	1,027		221	%
Alternatives investments	639			623			632			619			597			(4	)%	(7	)%	639			597			(7	)%
Total average net invested assets ex. Apollo investment	$	959		$	1,162		$	1,567		$	1,837		$	1,624		(12	)%	69	%	$	959		$	1,624		69	%

Note: Please refer to Notes to the Financial Supplement section and the Non-GAAP Measure Reconciliations for discussion on net investment earned rate and net invested assets. The investment results above are presented net of investment management fees as well as the proportionate share of income/(loss) and investments associated with the ACRA noncontrolling interest. Consolidated and Corporate & Other average net invested assets exclude the assets related to our investment in Apollo when used in the calculation of our net investment earned rate.



NIERs by Asset Class and Apollo Investment Unaudited (in millions, except percentages)
	Quarterly Trends															Δ		Year-to-Date						Δ
	1Q’19			2Q’19¹			3Q’19			4Q’19			1Q’20			Q/Q	Y/Y	2019			2020			Y/Y
NIER BY ASSET CLASS
Corporate securities	3.93		%	4.12		%	3.94		%	4.15		%	4.02		%	(13)bps	9bps	3.93		%	4.02		%	9bps
Structured securities
RMBS	6.03		%	5.07		%	4.39		%	5.03		%	5.53		%	50bps	(50)bps	6.03		%	5.53		%	(50)bps
CLO	4.76		%	4.73		%	4.57		%	4.45		%	4.38		%	(7)bps	(38)bps	4.76		%	4.38		%	(38)bps
ABS	3.95		%	4.34		%	4.14		%	3.88		%	4.48		%	60bps	53bps	3.95		%	4.48		%	53bps
CMBS	4.16		%	3.93		%	3.96		%	5.27		%	4.23		%	NM	7bps	4.16		%	4.23		%	7bps
Total structured securities	4.90		%	4.64		%	4.33		%	4.52		%	4.69		%	17bps	(21)bps	4.90		%	4.69		%	(21)bps
State, municipal, political subdivisions and U.S. and foreign government	4.27		%	3.80		%	3.88		%	4.07		%	4.80		%	73bps	53bps	4.27		%	4.80		%	53bps
Mortgage loans	4.91		%	4.54		%	4.66		%	4.58		%	4.36		%	(22)bps	(55)bps	4.91		%	4.36		%	(55)bps
Alternative investments	4.36		%	14.13		%	9.26		%	11.15		%	(2.58		)%	NM	NM	4.36		%	(2.58		)%	NM
Other U.S. and Bermuda net invested assets	2.70		%	2.84		%	2.94		%	3.33		%	2.32		%	NM	(38)bps	2.70		%	2.32		%	(38)bps
Consolidated net investment earned rate	4.28		%	4.67		%	4.35		%	4.62		%	3.87		%	(75)bps	(41)bps	4.28		%	3.87		%	(41)bps

APOLLO INVESTMENT DETAILS
Change in fair value of Apollo investment	$	—		$	—		$	—		$	—		$	(297	)	NM	NM	$	—		$	(297	)	NM
Income tax (expense) benefit on Apollo investment	—			—			—			—			58			NM	NM	—			58			NM
Change in fair value of Apollo investment, net of tax	$	—		$	—		$	—		$	—		$	(239	)	NM	NM	$	—		$	(239	)	NM

Return on Apollo investment, net of tax	—		%	—		%	—		%	—		%	(224.9		)%	NM	NM	—		%	(224.9		)%	NM
Change in fair value of Apollo investment impact on adjusted operating EPS²	$	—		$	—		$	—		$	—		$	(1.36	)	NM	NM	$	—		$	(1.36	)	NM
Adjusted operating EPS, excluding AOG	$	1.50		$	1.95		$	1.34		$	2.21		$	0.76		NM	NM	$	1.50		$	0.76		NM

Note: Please refer to Notes to the Financial Supplement section and the Non-GAAP Measure Reconciliations for discussion on net investment earned rate. The investment results above are presented net of investment management fees as well as the proportionate share of income/(loss) and investments associated with the ACRA noncontrolling interest. 1 In the second quarter of 2019, we implemented a new management fee structure which changed the allocation of fees by asset class. Although the implementation of the new management fee structure had impacts on the allocation of fees by asset class, on a consolidated basis the impact was immaterial. 2 The impact of the Apollo investment on adjusted operating EPS includes removing the loss on the investment, net of tax, as well as the Athene shares issued in exchange for the AOG units. It does not include an adjustment for the shares issued in exchange for $350 million. For Q1 2020, the calculation also includes the dilution of other stock compensation plans as a result of the exclusion of the loss on the Apollo investment creating adjusted operating income available to common shareholders instead of a loss.



Credit Quality of Securities Unaudited (in millions, except percentages)
	December 31, 2019				March 31, 2020
CREDIT QUALITY OF AFS SECURITIES (GAAP VIEW)	Fair Value		Percent of Total		Fair Value		Percent of Total
NAIC designation
1	$	38,667	51.4	%	$	35,844	51.8	%
2	32,336		43.0	%	29,432		42.5	%
Total investment grade	71,003		94.4	%	65,276		94.3	%
3	3,300		4.4	%	3,117		4.5	%
4	740		1.0	%	710		1.0	%
5	94		0.1	%	72		0.1	%
6	41		0.1	%	42		0.1	%
Total below investment grade	4,175		5.6	%	3,941		5.7	%
Total AFS securities including related parties	$	75,178	100.0	%	$	69,217	100.0	%

NRSRO designation
AAA/AA/A	$	28,299	37.7	%	$	26,515	38.3	%
BBB	29,032		38.6	%	25,198		36.4	%
Non-rated¹	10,014		13.3	%	10,268		14.8	%
Total investment grade²	67,345		89.6	%	61,981		89.5	%
BB	3,403		4.5	%	3,193		4.6	%
B	813		1.1	%	810		1.2	%
CCC	1,981		2.6	%	1,722		2.5	%
CC and lower	1,076		1.4	%	918		1.3	%
Non-rated¹	560		0.8	%	593		0.9	%
Total below investment grade	7,833		10.4	%	7,236		10.5	%
Total AFS securities including related parties	$	75,178	100.0	%	$	69,217	100.0	%

	Invested Asset Value³		% NAIC 1 or 2		Invested Asset Value³		% NAIC 1 or 2
SUMMARY OF NAIC 1 & 2 DESIGNATIONS BY ASSET CLASS (MANAGEMENT VIEW)
Corporate securities	$	51,175	92.9	%	$	50,348	92.1	%
RMBS	8,001		95.3	%	7,708		94.9	%
CLO	10,053		98.3	%	11,035		99.3	%
ABS	9,476		91.8	%	9,559		92.9	%
CMBS	2,634		89.9	%	2,551		89.7	%
Total structured securities	30,164		94.7	%	30,853		95.3	%
State, municipal, political subdivisions and U.S. and foreign government	2,291		99.2	%	1,601		99.6	%
Short-term investments	597		95.5	%	574		95.0	%
Total NAIC 1 & 2 Designations	$	84,227			$	83,376

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



Credit Quality of Net Invested Assets (Management view) Unaudited (In millions, except percentages)
	December 31, 2019				March 31, 2020					December 31, 2019				March 31, 2020
	Invested Asset Value¹		% of Total		Invested Asset Value¹		% of Total			Invested Asset Value¹		% of Total		Invested Asset Value¹		% of Total
CREDIT QUALITY OF NET INVESTED ASSETS									CREDIT QUALITY OF NET INVESTED ASSETS
NAIC designation									NRSRO designation
1	$	45,836	51.0	%	$	45,289	50.7	%	AAA/AA/A	$	33,918	37.7	%	$	32,968	37.0	%
2	38,391		42.7	%	38,087		42.7	%	BBB	33,902		37.7	%	32,334		36.2	%
Non-rated³	—		—	%	—		—	%	Non-rated³	12,448		13.9	%	13,764		15.4	%
Total investment grade	84,227		93.7	%	83,376		93.4	%	Total investment grade	80,268		89.3	%	79,066		88.6	%
3	4,056		4.5	%	4,586		5.1	%	BB	3,984		4.4	%	4,502		5.0	%
4	1,246		1.4	%	968		1.1	%	B	1,300		1.5	%	1,423		1.6	%
5	289		0.3	%	268		0.3	%	CCC	2,177		2.4	%	2,106		2.4	%
6	56		0.1	%	59		0.1	%	CC and lower	1,138		1.3	%	1,071		1.2	%
Non-rated³	—		—	%	—		—	%	Non-rated³	1,007		1.1	%	1,089		1.2	%
Total below investment grade	5,647		6.3	%	5,881		6.6	%	Total below investment grade	9,606		10.7	%	10,191		11.4	%
Total NAIC designated assets²	89,874		100.0	%	89,257		100.0	%	Total NRSRO designated assets²	89,874		100.0	%	89,257		100.0	%

Assets without NAIC designation									Assets without NRSRO designation
Commercial mortgage loans									Commercial mortgage loans
CM1	4,102		29.2	%	3,778		25.3	%	CM1	4,102		29.2	%	3,778		25.3	%
CM2	6,050		43.1	%	7,168		47.9	%	CM2	6,050		43.1	%	7,168		47.9	%
CM3	3,481		24.8	%	3,643		24.4	%	CM3	3,481		24.8	%	3,643		24.4	%
CM4	365		2.6	%	365		2.4	%	CM4	365		2.6	%	365		2.4	%
CM5	40		0.3	%	—		—	%	CM5	40		0.3	%	—		—	%
CM6	—		—	%	—		—	%	CM6	—		—	%	—		—	%
CM7	—		—	%	—		—	%	CM7	—		—	%	—		—	%
Total CMLs	14,038		100.0	%	14,954		100.0	%	Total CMLs	14,038		100.0	%	14,954		100.0	%
Residential mortgage loans									Residential mortgage loans
In good standing	4,423		98.5	%	4,037		98.2	%	In good standing	4,423		98.5	%	4,037		98.2	%
90 days late	34		0.8	%	33		0.8	%	90 days late	34		0.8	%	33		0.8	%
In foreclosure	33		0.7	%	42		1.0	%	In foreclosure	33		0.7	%	42		1.0	%
Total RMLs	4,490		100.0	%	4,112		100.0	%	Total RMLs	4,490		100.0	%	4,112		100.0	%
Alternative investments	5,586				5,787				Alternative investments	5,586				5,787
Investment in Apollo	—				850				Investment in Apollo	—				850
Cash and equivalents	1,958				4,718				Cash and equivalents	1,958				4,718
Equity securities	365				369				Equity securities	365				369
Other⁴	1,175				1,153				Other⁴	1,175				1,153
Net invested assets	$	117,486			$	121,200			Net invested assets	$	117,486			$	121,200

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



Credit Quality of Net Invested Assets – RMBS, CLOs, ABS (Management view) Unaudited (In millions, except percentages)
	December 31, 2019				March 31, 2020					December 31, 2019				March 31, 2020
	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	$	7,610	90.7	%	$	7,408	91.2	%	AAA/AA/A	$	1,068	12.7	%	$	1,113	13.7	%
2	391		4.6	%	300		3.7	%	BBB	717		8.5	%	591		7.3	%
Non-rated²	—		—	%	—		—	%	Non-rated²	2,702		32.2	%	2,585		31.8	%
Total investment grade	8,001		95.3	%	7,708		94.9	%	Total investment grade	4,487		53.4	%	4,289		52.8	%
3	311		3.7	%	328		4.0	%	BB	288		3.4	%	313		3.8	%
4	58		0.7	%	64		0.8	%	B	251		3.0	%	259		3.2	%
5	10		0.1	%	8		0.1	%	CCC	2,061		24.6	%	2,006		24.7	%
6	14		0.2	%	15		0.2	%	CC and lower	1,134		13.5	%	1,071		13.2	%
Non-rated²	—		—	%	—		—	%	Non-rated²	173		2.1	%	185		2.3	%
Total below investment grade	393		4.7	%	415		5.1	%	Total below investment grade	3,907		46.6	%	3,834		47.2	%
RMBS net invested assets	$	8,394	100.0	%	$	8,123	100.0	%	RMBS net invested assets	$	8,394	100.0	%	$	8,123	100.0	%

CREDIT QUALITY OF CLOs – NAIC DESIGNATION									CREDIT QUALITY OF CLOs – NRSRO DESIGNATION
1	$	5,796	56.7	%	$	6,680	60.1	%	AAA/AA/A	$	5,796	56.7	%	$	6,680	60.1	%
2	4,257		41.6	%	4,355		39.2	%	BBB	4,257		41.6	%	4,355		39.2	%
Non-rated²	—		—	%	—		—	%	Non-rated²	—		—	%	—		—	%
Total investment grade	10,053		98.3	%	11,035		99.3	%	Total investment grade	10,053		98.3	%	11,035		99.3	%
3	141		1.4	%	74		0.6	%	BB	141		1.4	%	74		0.6	%
4	22		0.2	%	9		0.1	%	B	22		0.2	%	9		0.1	%
5	7		0.1	%	—		—	%	CCC	7		0.1	%	—		—	%
6	—		—	%	—		—	%	CC and lower	—		—	%	—		—	%
Total below investment grade	170		1.7	%	83		0.7	%	Total below investment grade	170		1.7	%	83		0.7	%
CLOs net invested assets	$	10,223	100.0	%	$	11,118	100.0	%	CLOs net invested assets	$	10,223	100.0	%	$	11,118	100.0	%

CREDIT QUALITY OF ABS – NAIC DESIGNATION									CREDIT QUALITY OF ABS – NRSRO DESIGNATION
1	$	6,518	63.1	%	$	6,579	63.9	%	AAA/AA/A	$	5,297	51.3	%	$	5,217	50.7	%
2	2,958		28.7	%	2,980		29.0	%	BBB	2,268		22.0	%	2,247		21.8	%
Non-rated²	—		—	%	—		—	%	Non-rated²	1,911		18.5	%	2,063		20.1	%
Total investment grade	9,476		91.8	%	9,559		92.9	%	Total investment grade	9,476		91.8	%	9,527		92.6	%
3	565		5.5	%	543		5.3	%	BB	545		5.3	%	571		5.5	%
4	126		1.2	%	44		0.4	%	B	126		1.2	%	44		0.4	%
5	150		1.5	%	146		1.4	%	CCC	6		0.1	%	6		0.1	%
6	—		—	%	—		—	%	CC and lower	—		—	%	—		—	%
Non-rated²	—		—	%	—		—	%	Non-rated²	164		1.6	%	144		1.4	%
Total below investment grade	841		8.2	%	733		7.1	%	Total below investment grade	841		8.2	%	765		7.4	%
ABS net invested assets	$	10,317	100.0	%	$	10,292	100.0	%	ABS net invested assets	$	10,317	100.0	%	$	10,292	100.0	%

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



Net Reserve Liabilities & Rollforwards Unaudited (in millions, except percentages)
	December 31, 2019				March 31, 2020
	Dollars		Percent of Total		Dollars		Percent of Total
NET RESERVE LIABILITIES
Fixed indexed annuities	$	73,346	64.0	%	$	70,868	62.0	%
Fixed rate annuities	19,481		17.0	%	19,886		17.4	%
Total deferred annuities	92,827		81.0	%	90,754		79.4	%
Pension risk transfer annuities	8,230		7.2	%	9,143		8.0	%
Payout annuities	6,383		5.6	%	6,504		5.7	%
Funding agreements	5,107		4.4	%	5,893		5.2	%
Life and other	2,105		1.8	%	1,979		1.7	%
Total net reserve liabilities	$	114,652	100.0	%	$	114,273	100.0	%



	Quarterly Trends															Δ				Year-to-Date						Δ
	1Q’19			2Q’19			3Q’19			4Q’19			1Q’20			Q/Q		Y/Y		2019			2020			Y/Y
NET RESERVE LIABILITY ROLLFORWARD
Net reserve liabilities – beginning	$	107,732		$	111,791		$	114,680		$	118,825		$	114,652		(4	)%	6	%	$	107,732		$	114,652		6	%
Gross deposits¹	4,860			4,153			5,759			3,735			4,084			9	%	(16	)%	4,860			4,084			(16	)%
Deposits attributable to ACRA noncontrolling interest	—			—			—			(544		)	—			NM		NM		—			—			NM
Net deposits	4,860			4,153			5,759			3,191			4,084			28	%	(16	)%	4,860			4,084			(16	)%
Net withdrawals	(2,780		)	(2,907		)	(2,807		)	(2,497		)	(2,740		)	(10	)%	1	%	(2,780		)	(2,740		)	1	%
Sale of ACRA noncontrolling interest to ADIP²	—			—			—			(6,141		)	—			NM		NM		—			—			NM
Other reserve changes	1,979			1,643			1,193			1,274			(1,723		)	NM		NM		1,979			(1,723		)	NM
Net reserve liabilities – ending	$	111,791		$	114,680		$	118,825		$	114,652		$	114,273		—	%	2	%	$	111,791		$	114,273		2	%

ACRA NONCONTROLLING INTEREST RESERVE LIABILITY ROLLFORWARD³
Reserve liabilities – beginning	$	—		$	—		$	—		$	—		$	6,574		NM		NM		$	—		$	6,574		NM
Deposits	—			—			—			544			—			NM		NM		—			—			NM
Withdrawals	—			—			—			(169		)	(197		)	(17	)%	NM		—			(197		)	NM
Sale of ACRA noncontrolling interest to ADIP²	—			—			—			6,141			—			NM		NM		—			—			NM
Other reserve changes	—			—			—			58			(55		)	NM		NM		—			(55		)	NM
Reserve liabilities – ending	$	—		$	—		$	—		$	6,574		$	6,322		(4	)%	NM		$	—		$	6,322		NM

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



Net Reserve Liabilities & Rollforwards, continued Unaudited (in millions, except percentages)
	Quarterly Trends															Δ				Year-to-Date						Δ
	1Q’19			2Q’19			3Q’19			4Q’19			1Q’20			Q/Q		Y/Y		2019			2020			Y/Y
NET DEFERRED ANNUITY ACCOUNT VALUE ROLLFORWARD¹
Net account value – beginning	$	89,435		$	90,184		$	91,165		$	91,768		$	88,000		(4	)%	(2	)%	$	89,435		$	88,000		(2	)%
Gross deposits²	2,800			2,976			2,483			2,237			2,013			(10	)%	(28	)%	2,800			2,013			(28	)%
Deposits attributable to ACRA noncontrolling interest	—			—			—			4			—			NM		NM		—			—			NM
Net deposits	2,800			2,976			2,483			2,241			2,013			(10	)%	(28	)%	2,800			2,013			(28	)%
Premium and interest bonuses	58			68			55			34			37			9	%	(36	)%	58			37			(36	)%
Fixed and index credits to policyholders	423			591			560			611			589			(4	)%	39	%	423			589			39	%
Surrenders and benefits paid	(2,431		)	(2,548		)	(2,382		)	(2,091		)	(2,288		)	(9	)%	6	%	(2,431		)	(2,288		)	6	%
Sale of ACRA noncontrolling interest to ADIP³	—			—			—			(4,450		)	—			NM		NM		—			—			NM
Fee and product charges	(101		)	(106		)	(113		)	(113		)	(113		)	—	%	(12	)%	(101		)	(113		)	(12	)%
Net account value – ending	$	90,184		$	91,165		$	91,768		$	88,000		$	88,238		—	%	(2	)%	$	90,184		$	88,238		(2	)%

NET INSTITUTIONAL RESERVE LIABILITY ROLLFORWARD (PENSION RISK TRANSFER AND FUNDING AGREEMENTS)
Net reserve liabilities – beginning	$	8,536		$	10,404		$	11,354		$	14,371		$	13,337		(7	)%	56	%	$	8,536		$	13,337		56	%
Gross deposits²	1,922			1,008			3,106			1,314			1,840			40	%	(4	)%	1,922			1,840			(4	)%
Deposits attributable to ACRA noncontrolling interest	—			—			—			(548		)	—			NM		NM		—			—			NM
Net deposits	1,922			1,008			3,106			766			1,840			140	%	(4	)%	1,922			1,840			(4	)%
Net withdrawals	(143		)	(158		)	(205		)	(204		)	(240		)	(18	)%	(68	)%	(143		)	(240		)	(68	)%
Sale of ACRA noncontrolling interest to ADIP³	—			—			—			(1,698		)	—			NM		NM		—			—			NM
Other reserve changes	89			100			116			102			99			(3	)%	11	%	89			99			11	%
Net reserve liabilities – ending	$	10,404		$	11,354		$	14,371		$	13,337		$	15,036		13	%	45	%	$	10,404		$	15,036		45	%

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



Deferred Annuity Liability Characteristics Unaudited (in millions, except percentages)
	Surrender charge (gross)		Percent of total		Surrender charge (net of MVA)			Percent of total
SURRENDER CHARGE PERCENTAGES ON DEFERRED ANNUITIES NET ACCOUNT VALUE
No Surrender Charge	$	19,141	21.7	%	$	19,141		21.7	%
0.0% < 2.0%	806		0.9	%	9,550			10.8	%
2.0% < 4.0%	2,850		3.2	%	13,882			15.7	%
4.0% < 6.0%	8,905		10.1	%	17,840			20.2	%
6.0% or greater	56,536		64.1	%	27,825			31.6	%
	$	88,238	100.0	%	$	88,238		100.0	%

			Surrender charge (gross)		MVA benefit			Surrender charge (net)
Aggregate surrender charge protection			6.3	%	(2.2		)%	4.1	%



	Deferred annuities		Percent of total		Average surrender charge (gross)
YEARS OF SURRENDER CHARGE REMAINING ON DEFERRED ANNUITIES NET ACCOUNT VALUE
No Surrender Charge	$	19,141	21.7	%	—	%
Less than 2	16,484		18.7	%	5.4	%
2 to less than 4	16,927		19.2	%	6.9	%
4 to less than 6	10,591		12.0	%	8.2	%
6 to less than 8	10,770		12.2	%	9.4	%
8 to less than 10	10,725		12.1	%	10.3	%
10 or greater	3,600		4.1	%	14.2	%
	$	88,238	100.0	%



	At minimum guarantees		Total account value		Percent of total account value at minimum guarantees
MINIMUM GUARANTEES ON DEFERRED ANNUITIES
Fixed indexed annuities	$	14,802	$	68,620	22	%
Fixed rate annuities	7,724		19,618		39	%
Total net deferred annuities	$	22,526	$	88,238	26	%

					March 31, 2020
Distance to guarantees¹					> 100

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



	December 31, 2019			March 31, 2020			Δ
DEFERRED ANNUITY RIDER RESERVE SUMMARY
Net rider reserve	$	4,091		$	3,649		(11	)%
Net account value with rider reserves	37,377			37,243			—	%
Rider reserve as a percentage of account value with rider reserves	10.9		%	9.8		%	NM



Capitalization & Regulatory Capital Ratios Unaudited (in millions, except percentages)
	Quarterly Trends															Δ
	1Q’19			2Q’19			3Q’19			4Q’19			1Q’20			Q/Q		Y/Y
CAPITALIZATION
Total debt	$	991		$	991		$	992		$	1,467		$	1,386		(6	)%	40	%
Total AHL shareholders’ equity	10,117			12,365			13,545			13,391			9,940			(26	)%	(2	)%
Total capitalization	11,108			13,356			14,537			14,858			11,326			(24	)%	2	%
Less: Accumulated other comprehensive income (loss) (AOCI)	706			1,760			2,442			2,281			(1,174		)	NM		NM
Less: Accumulated change in fair value of reinsurance assets	309			639			727			493			(155		)	NM		NM
Total adjusted capitalization	$	10,093		$	10,957		$	11,368		$	12,084		$	12,655		5	%	25	%

EQUITY
Total AHL shareholders’ equity	$	10,117		$	12,365		$	13,545		$	13,391		$	9,940		(26	)%	(2	)%
Less: Preferred stock	—			839			1,172			1,172			1,172			—	%	NM
Total AHL common shareholders’ equity	10,117			11,526			12,373			12,219			8,768			(28	)%	(13	)%
Less: AOCI	706			1,760			2,442			2,281			(1,174		)	NM		NM
Less: Accumulated change in fair value of reinsurance assets	309			639			727			493			(155		)	NM		NM
Total adjusted AHL common shareholders’ equity	$	9,102		$	9,127		$	9,204		$	9,445		$	10,097		7	%	11	%

EQUITY BY SEGMENT
Retirement Services	$	8,201		$	7,704		$	7,494		$	7,443		$	8,002		8	%	(2	)%
Corporate and Other	901			1,423			1,710			2,002			2,095			5	%	133	%
Total adjusted AHL common shareholders’ equity	$	9,102		$	9,127		$	9,204		$	9,445		$	10,097		7	%	11	%

FINANCIAL LEVERAGE
Debt to capital ratio	8.9		%	7.4		%	6.8		%	9.9		%	12.2		%	230bps		NM
AOCI	0.6		%	1.2		%	1.5		%	1.8		%	(1.1		)%	NM		NM
Accumulated change in fair value of reinsurance assets	0.3		%	0.4		%	0.4		%	0.4		%	(0.1		)%	(50)bps		(40)bps
Adjusted debt to capital ratio	9.8		%	9.0		%	8.7		%	12.1		%	11.0		%	NM		120bps



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

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



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

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



	Quarterly Trends					Δ				Year-to-Date		Δ
	1Q’19	2Q’19	3Q’19	4Q’19	1Q’20	Q/Q		Y/Y		2019	2020	Y/Y
SHARE DATA
Weighted average common shares outstanding – basic¹	194.0	191.2	184.3	177.3	194.3	10	%	—	%	194.0	194.3	—	%
Weighted average shares outstanding – diluted – Class A common shares²	161.7	158.8	152.0	145.1	161.4	11	%	—	%	161.7	161.4	—	%
Weighted average common shares outstanding – adjusted operating³	192.2	189.4	182.3	175.7	181.5	3	%	(6	)%	192.2	181.5	(6	)%
Weighted average common shares outstanding - adjusted operating excluding Apollo⁴	192.2	189.4	182.3	175.7	173.3	(1	)%	(10	)%	192.2	173.3	(10	)%
Common shares outstanding⁵	194.1	185.4	182.5	175.7	193.9	10	%	—	%	194.1	193.9	—	%
Adjusted operating common shares outstanding³	192.4	184.4	181.4	174.9	197.7	13	%	3	%	192.4	197.7	3	%

1 Basic earnings per common share, including basic weighted average common shares outstanding, includes all classes eligible to participate in dividends for each period presented. In Q1 2020, the Class B and Class M common shares were eliminated. The Class A basic weighted average common shares outstanding for the period were 161,400,055. 2 Diluted earnings per common share on a GAAP basis for Class A common shares, including diluted Class A weighted average common shares outstanding, includes the dilutive impacts, if any, of Class B common shares, Class M common shares and any other stock-based awards. 3 Represents Class A common shares outstanding or weighted average common shares outstanding assuming conversion or settlement of all outstanding items that are able to be converted to or settled in Class A common shares, including the impacts of Class B common shares, Class M common shares and any other stock-based awards, but excluding any awards for which the exercise or conversion price exceeds the market value of our Class A common shares on the applicable measurement date. 4 Weighted average common shares outstanding - adjusted operating excluding Apollo is adjusted to exclude the Athene shares issued in exchange for the AOG units as part of the Apollo transaction, but does not include an adjustment for the shares issued in exchange for $350 million cash. For Q1 2020, the calculation also includes the dilution of other stock compensation plans as a result of the exclusion of the loss on the AOG units creating adjusted operating income available to common shareholders instead of a loss. 5 Represents common shares vested and outstanding for all classes eligible to participate in dividends for each period presented.



Notes to the Financial Supplement

KEY OPERATING AND NON-GAAP MEASURES

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

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

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

•

Investment Gains (Losses), Net of Offsets—Consists of the realized gains and losses on the sale of AFS securities, the change in fair value of reinsurance assets, unrealized gains and losses, allowances, 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 CLOs) and 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 and the change in unit-linked reserves related to the corresponding trading securities. Investment gains and losses are net of offsets related to DAC, DSI, and VOBA amortization and changes to guaranteed lifetime withdrawal benefit (GLWB) and guaranteed minimum death benefit (GMDB) reserves (together, GLWB and GMDB reserves represent rider reserves) as well as the MVAs associated with surrenders or terminations of contracts.

•

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


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


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


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


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

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

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

ADJUSTED OPERATING ROE

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

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

Adjusted operating earnings (loss) per common share, weighted average common shares outstanding – adjusted operating and adjusted book value per common share are non-GAAP measures used to evaluate our financial performance and financial condition. The non-GAAP measures adjust the number of shares included in the corresponding GAAP measures to reflect the conversion or settlement of all shares and other stock-based awards outstanding. We believe using these measures represent an economic view of our share counts and provide a simplified and consistent view of our outstanding shares. Adjusted operating earnings (loss) per common share is calculated as the adjusted operating income (loss) available to common shareholders, over the weighted average common shares outstanding – adjusted operating. Adjusted book value per common share is calculated as the adjusted AHL common shareholders’ equity divided by the adjusted operating common shares outstanding. Effective February 28, 2020, all Class B common shares were converted into Class A common shares and all Class M common shares were converted into warrants and Class A common shares. Our Class B common shares were economically equivalent to Class A common shares and could have been converted to Class A common shares on a one-for-one basis at any time. Our Class M common shares were in the legal form of shares but economically functioned as options as they were convertible into Class A common shares after vesting and settlement of the conversion price. In calculating Class A diluted earnings per share on a GAAP basis, we are required to apply sequencing rules to determine the dilutive impacts, if any, of our Class B common shares, Class M common shares and any other stock-based awards. To the extent our Class B common shares, Class M common shares and/or any other stock-based awards were not dilutive, after considering the dilutive effects of the more dilutive securities in the sequence, they were excluded. Weighted average common shares outstanding – adjusted operating and adjusted operating common shares outstanding assume conversion or settlement of all outstanding items that are able to be converted to or settled in Class A common shares, including the impacts of Class B common shares on a one-for-one basis, the impacts of all Class M common shares net of the conversion price and any other stock-based awards, but excluding any awards for which the exercise or conversion price exceeds the market value of our Class A common shares on the applicable measurement date. For certain historical periods, Class M shares were not included due to issuance restrictions which were contingent upon our IPO. Adjusted operating earnings (loss) per common share, weighted average common shares outstanding – adjusted operating and adjusted book value per common share should not be used as a substitute for basic earnings (loss) per share – Class A common shares, basic weighted average common shares outstanding – Class A or book value per common share. However, we believe the adjustments to the shares and equity are significant to gaining an understanding of our overall results of operations and financial condition.



Notes to the Financial Supplement, continued

ADJUSTED DEBT TO CAPITAL RATIO

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

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

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

•

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

•

Cost of funds includes liability costs related to cost of crediting on both deferred annuities and institutional products as well as other liability costs, but does not include the proportionate share of the ACRA cost of funds associated with the noncontrolling interest. Cost of funds is computed as the total liability costs divided by the average net invested assets, excluding our investment in Apollo, for the relevant period. To enhance the ability to analyze these measures across periods, interim periods are annualized.

◦

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

◦

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

•

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

•

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

NET INVESTED ASSETS

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

NET RESERVE LIABILITIES

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

SALES

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



Non-GAAP Reconciliations Unaudited (in millions, except per share data)
	Quarterly Trends															Year-to-Date
	1Q’19			2Q’19			3Q’19			4Q’19			1Q’20			2019		2020
RECONCILIATION OF BOOK VALUE PER COMMON SHARE TO ADJUSTED BOOK VALUE PER COMMON SHARE
Book value per common share	$	52.12		$	66.69		$	74.20		$	76.21		$	51.28
Preferred stock	—			(4.53		)	(6.42		)	(6.67		)	(6.04		)
AOCI	(3.64		)	(9.49		)	(13.38		)	(12.98		)	6.06
Accumulated change in fair value of reinsurance assets	(1.59		)	(3.45		)	(3.98		)	(2.80		)	0.80
Effect of items convertible to or settled in Class A common shares	0.41			0.28			0.32			0.26			(1.03		)
Adjusted book value per common share	$	47.30		$	49.50		$	50.74		$	54.02		$	51.07

RECONCILIATION OF AVERAGE AHL SHAREHOLDERS’ EQUITY TO AVERAGE ADJUSTED AHL COMMON SHAREHOLDERS’ EQUITY
Average AHL shareholders’ equity	$	9,197		$	11,241		$	12,955		$	13,468		$	11,666		$	9,197	$	11,666
Less: Average preferred stock	—			420			1,006			1,172			1,172			—		1,172
Less: Average AOCI	117			1,233			2,101			2,362			554			117		554
Less: Average accumulated change in fair value of reinsurance assets	117			474			683			610			169			117		169
Average adjusted AHL common shareholders’ equity	$	8,963		$	9,114		$	9,165		$	9,324		$	9,771		$	8,963	$	9,771

Retirement Services	$	8,004		$	7,952		$	7,598		$	7,468		$	7,722		$	8,004	$	7,722
Corporate and Other	959			1,162			1,567			1,856			2,049			959		2,049
Average adjusted AHL common shareholders’ equity	$	8,963		$	9,114		$	9,165		$	9,324		$	9,771		$	8,963	$	9,771

RECONCILIATION OF BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING – CLASS A TO WEIGHTED AVERAGE COMMON SHARES OUTSTANDING – ADJUSTED OPERATING
Basic weighted average common shares outstanding – Class A	161.3			158.5			151.6			144.5			161.4			161.3		161.4
Conversion of Class B common shares to Class A common shares	25.4			25.4			25.4			25.4			16.9			25.4		16.9
Conversion of Class M common shares to Class A common shares	5.1			5.1			4.9			5.2			3.2			5.1		3.2
Effect of other stock compensation plans	0.4			0.4			0.4			0.6			—			0.4		—
Weighted average common shares outstanding – adjusted operating	192.2			189.4			182.3			175.7			181.5			192.2		181.5

RECONCILIATION OF CLASS A COMMON SHARES OUTSTANDING TO ADJUSTED OPERATING COMMON SHARES OUTSTANDING
Class A common shares outstanding	161.3			152.6			149.8			142.8			193.9
Conversion of Class B common shares to Class A common shares	25.4			25.4			25.4			25.4			—
Conversion of Class M common shares to Class A common shares	5.0			5.3			5.1			5.5			—
Effect of other stock compensation plans	0.7			1.1			1.1			1.2			3.8
Adjusted operating common shares outstanding	192.4			184.4			181.4			174.9			197.7



Non-GAAP Reconciliations Unaudited (in millions, except percentages)
	Quarterly Trends														Year-to-Date
	1Q’19		2Q’19			3Q’19			4Q’19			1Q’20			2019		2020
RECONCILIATION OF NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS TO ADJUSTED OPERATING INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS EXCLUDING NOTABLES AND AOG
Net income (loss) available to Athene Holding Ltd. common shareholders	$	708	$	720		$	276		$	432		$	(1,065	)	$	708	$	(1,065	)
Less: Total non-operating adjustments	421		350			33			43			(957		)	421		(957		)
Adjusted operating income (loss) available to common shareholders	287		370			243			389			(108		)	287		(108		)
Notable items	—		—			62			(43		)	43			—		43
Adjusted operating income (loss) available to common shareholders excluding notable items	$	287	$	370		$	305		$	346		$	(65	)	$	287	$	(65	)

Retirement Services adjusted operating income available to common shareholders	$	286	$	376		$	256		$	404		$	204		$	286	$	204
Rider reserve and DAC equity market performance	—		—			5			(25		)	50			—		50
Actuarial updates	—		—			—			(22		)	—			—		—
Out of period actuarial adjustments	—		—			13			—			—			—		—
Unlocking	—		—			48			—			—			—		—
Tax impact of notable items	—		—			(4		)	4			(7		)	—		(7		)
Retirement Services notable items	—		—			62			(43		)	43			—		43
Retirement Services adjusted operating income available to common shareholders excluding notable items	286		376			318			361			247			286		247

Corporate and Other adjusted operating income (loss) available to common shareholders	1		(6		)	(13		)	(15		)	(312		)	1		(312		)
Adjusted operating income (loss) available to common shareholders excluding notable items	287		370			305			346			(65		)	287		(65		)
Less: Change in fair value of Apollo investment, net of tax	—		—			—			—			(239		)	—		(239		)
Adjusted operating income available to common shareholders excluding notables and AOG	$	287	$	370		$	305		$	346		$	174		$	287	$	174



Non-GAAP Reconciliations Unaudited (in millions, except percentages)
	Quarterly Trends															Year-to-Date
	1Q’19			2Q’19			3Q’19			4Q’19			1Q’20			2019			2020
RECONCILIATION OF NET INVESTMENT INCOME TO NET INVESTMENT EARNINGS
GAAP net investment income	$	1,082		$	1,182		$	1,090		$	1,242		$	745		$	1,082		$	745
Change in fair value of reinsurance assets	132			161			199			188			270			132			270
Alternative income gain (loss)	(5		)	12			6			(12		)	(101		)	(5		)	(101		)
ACRA noncontrolling interest	—			—			—			(61		)	(72		)	—			(72		)
Apollo investment (income) loss	—			—			—			—			297			—			297
Held for trading amortization and other	(6		)	(10		)	(3		)	(18		)	12			(6		)	12
Total adjustments to arrive at net investment earnings	121			163			202			97			406			121			406
Total net investment earnings	$	1,203		$	1,345		$	1,292		$	1,339		$	1,151		$	1,203		$	1,151

Retirement Services	$	1,171		$	1,321		$	1,264		$	1,306		$	1,184		$	1,171		$	1,184
Corporate and Other	32			24			28			33			(33		)	32			(33		)
Total net investment earnings	$	1,203		$	1,345		$	1,292		$	1,339		$	1,151		$	1,203		$	1,151

RECONCILIATION OF NET INVESTMENT INCOME RATE TO NET INVESTMENT EARNED RATE
GAAP net investment income rate	3.85		%	4.10		%	3.67		%	4.28		%	2.51		%	3.85		%	2.51		%
Change in fair value of reinsurance assets	0.47		%	0.56		%	0.67		%	0.65		%	0.90		%	0.47		%	0.90		%
Alternative income gain (loss)	(0.02		)%	0.04		%	0.02		%	(0.04		)%	(0.34		)%	(0.02		)%	(0.34		)%
ACRA noncontrolling interest	—		%	—		%	—		%	(0.21		)%	(0.24		)%	—		%	(0.24		)%
Apollo investment (income) loss	—		%	—		%	—		%	—		%	1.00		%	—		%	1.00		%
Held for trading amortization and other	(0.02		)%	(0.03		)%	(0.01		)%	(0.06		)%	0.04		%	(0.02		)%	0.04		%
Total adjustments to arrive at net investment earned rate	0.43		%	0.57		%	0.68		%	0.34		%	1.36		%	0.43		%	1.36		%
Consolidated net investment earned rate	4.28		%	4.67		%	4.35		%	4.62		%	3.87		%	4.28		%	3.87		%

Retirement Services	4.21		%	4.63		%	4.31		%	4.57		%	4.04		%	4.21		%	4.04		%
Corporate and Other	13.19		%	8.39		%	7.28		%	7.16		%	(8.14		)%	13.19		%	(8.14		)%
Consolidated net investment earned rate	4.28		%	4.67		%	4.35		%	4.62		%	3.87		%	4.28		%	3.87		%

Retirement Services	$	111,443		$	114,059		$	117,338		$	114,149		$	117,295		$	111,443		$	117,295
Corporate and Other ex. Apollo investment	959			1,162			1,567			1,837			1,624			959			1,624
Consolidated average net invested assets ex. Apollo investment	$	112,402		$	115,221		$	118,905		$	115,986		$	118,919		$	112,402		$	118,919



Non-GAAP Reconciliations Unaudited (in millions, except percentages)
	Quarterly Trends															Year-to-Date
	1Q’19			2Q’19			3Q’19			4Q’19			1Q’20			2019			2020
RECONCILIATION OF INTEREST SENSITIVE CONTRACT BENEFITS TO COST OF CREDITING
GAAP interest sensitive contract benefits	$	1,516		$	1,094		$	801		$	1,146		$	(1,319	)	$	1,516		$	(1,319	)
Interest credited other than deferred annuities and institutional products	55			50			63			64			63			55			63
FIA option costs	278			280			282			269			266			278			266
Product charges (strategy fees)	(28		)	(29		)	(31		)	(31		)	(32		)	(28		)	(32		)
Reinsurance embedded derivative impacts	15			14			14			14			14			15			14
Change in fair values of embedded derivatives – FIAs	(1,311		)	(868		)	(560		)	(905		)	1,504			(1,311		)	1,504
Negative VOBA amortization	12			7			9			8			7			12			7
ACRA noncontrolling interest	—			—			—			(42		)	38			—			38
Other changes in interest sensitive contract liabilities	(2		)	(1		)	(2		)	(2		)	(1		)	(2		)	(1		)
Total adjustments to arrive at cost of crediting	(981		)	(547		)	(225		)	(625		)	1,859			(981		)	1,859
Retirement Services cost of crediting	$	535		$	547		$	576		$	521		$	540		$	535		$	540

GAAP interest sensitive contract benefits	5.44		%	3.84		%	2.73		%	4.02		%	(4.50		)%	5.44		%	(4.50		)%
Interest credited other than deferred annuities and institutional products	0.20		%	0.18		%	0.21		%	0.23		%	0.21		%	0.20		%	0.21		%
FIA option costs	1.00		%	0.98		%	0.96		%	0.94		%	0.91		%	1.00		%	0.91		%
Product charges (strategy fees)	(0.10		)%	(0.10		)%	(0.10		)%	(0.11		)%	(0.11		)%	(0.10		)%	(0.11		)%
Reinsurance embedded derivative impacts	0.05		%	0.05		%	0.05		%	0.05		%	0.05		%	0.05		%	0.05		%
Change in fair values of embedded derivatives – FIAs	(4.70		)%	(3.05		)%	(1.91		)%	(3.17		)%	5.13		%	(4.70		)%	5.13		%
Negative VOBA amortization	0.04		%	0.02		%	0.03		%	0.03		%	0.02		%	0.04		%	0.02		%
ACRA noncontrolling interest	—		%	—		%	—		%	(0.15		)%	0.13		%	—		%	0.13		%
Other changes in interest sensitive contract liabilities	(0.01		)%	—		%	(0.01		)%	(0.01		)%	—		%	(0.01		)%	—		%
Total adjustments to arrive at cost of crediting	(3.52		)%	(1.92		)%	(0.77		)%	(2.19		)%	6.34		%	(3.52		)%	6.34		%
Retirement Services cost of crediting	1.92		%	1.92		%	1.96		%	1.83		%	1.84		%	1.92		%	1.84		%

Retirement Services cost of crediting on deferred annuities	1.98		%	1.98		%	1.98		%	1.95		%	1.91		%	1.98		%	1.91		%
Retirement Services cost of crediting on institutional products	3.69		%	3.76		%	3.68		%	2.85		%	3.31		%	3.69		%	3.31		%
Retirement Services cost of crediting	1.92		%	1.92		%	1.96		%	1.83		%	1.84		%	1.92		%	1.84		%

Retirement Services average net invested assets	$	111,443		$	114,059		$	117,338		$	114,149		$	117,295		$	111,443		$	117,295
Average net account value on deferred annuities	89,809			90,675			91,467			87,660			88,119			89,809			88,119
Average institutional net reserve liabilities	9,809			10,470			13,320			12,931			14,250			9,809			14,250



Non-GAAP Reconciliations Unaudited (in millions)
	Quarterly Trends															Year-to-Date
	1Q’19			2Q’19			3Q’19			4Q’19			1Q’20			2019			2020
RECONCILIATION OF BENEFITS AND EXPENSES TO OTHER LIABILITY COSTS
GAAP benefits and expenses	$	4,255		$	2,673		$	4,305		$	2,723		$	(167	)	$	4,255		$	(167	)
Premiums	(2,000		)	(787		)	(2,688		)	(907		)	(1,140		)	(2,000		)	(1,140		)
Product charges	(125		)	(132		)	(135		)	(132		)	(140		)	(125		)	(140		)
Other revenues	(12		)	(9		)	(6		)	(10		)	2			(12		)	2
Cost of crediting	(242		)	(253		)	(280		)	(238		)	(259		)	(242		)	(259		)
Change in fair value of embedded derivatives - FIA, net of offsets	(1,260		)	(817		)	(497		)	(1,003		)	1,456			(1,260		)	1,456
DAC, DSI and VOBA amortization related to investment gains and losses	(173		)	(181		)	(151		)	28			425			(173		)	425
Rider reserves	(28		)	(24		)	(9		)	3			76			(28		)	76
Policy and other operating expenses, excluding policy acquisition expenses	(103		)	(117		)	(130		)	(138		)	(117		)	(103		)	(117		)
AmerUs closed block fair value liability	(53		)	(59		)	(46		)	6			45			(53		)	45
ACRA noncontrolling interest	—			—			—			(74		)	165			—			165
Other	1			1			(5		)	1			(4		)	1			(4		)
Total adjustments to arrive at other liability costs	(3,995		)	(2,378		)	(3,947		)	(2,464		)	509			(3,995		)	509
Other liability costs	$	260		$	295		$	358		$	259		$	342		$	260		$	342

Retirement Services	$	260		$	295		$	358		$	259		$	342		$	260		$	342
Corporate and Other	—			—			—			—			—			—			—
Consolidated other liability costs	$	260		$	295		$	358		$	259		$	342		$	260		$	342

RECONCILIATION OF POLICY AND OTHER OPERATING EXPENSES TO OPERATING EXPENSES
Policy and other operating expenses	$	165		$	185		$	194		$	200		$	188		$	165		$	188
Interest expense	(17		)	(15		)	(15		)	(20		)	(20		)	(17		)	(20		)
Policy acquisition expenses, net of deferrals	(62		)	(69		)	(63		)	(62		)	(71		)	(62		)	(71		)
Integration, restructuring and other non-operating expenses	(1		)	(11		)	(34		)	(24		)	(4		)	(1		)	(4		)
Stock compensation expenses	(3		)	(3		)	(3		)	(3		)	(10		)	(3		)	(10		)
ACRA noncontrolling interest	—			—			—			(5		)	(4		)	—			(4		)
Total adjustments to arrive at operating expenses	(83		)	(98		)	(115		)	(114		)	(109		)	(83		)	(109		)
Operating expenses	$	82		$	87		$	79		$	86		$	79		$	82		$	79

Retirement Services	$	62		$	68		$	67		$	69		$	68		$	62		$	68
Corporate and Other	20			19			12			17			11			20			11
Consolidated operating expenses	$	82		$	87		$	79		$	86		$	79		$	82		$	79



Non-GAAP Reconciliations Unaudited (in millions)
	December 31, 2019			March 31, 2020
RECONCILIATION OF TOTAL INVESTMENTS INCLUDING RELATED PARTIES TO NET INVESTED ASSETS
Total investments, including related parties	$	130,550		$	121,969
Derivative assets	(2,888		)	(1,610		)
Cash and cash equivalents (including restricted cash)	4,639			5,983
Accrued investment income	807			802
Payables for collateral on derivatives	(2,743		)	(1,589		)
Reinsurance funds withheld and modified coinsurance	(1,440		)	355
VIE and VOE assets, liabilities and noncontrolling interest	25			23
Unrealized (gains) losses	(4,095		)	2,292
Ceded policy loans	(235		)	(229		)
Net investment receivables (payables)	(57		)	(238		)
Allowance for credit losses	—			505
Total adjustments to arrive at gross invested assets	(5,987		)	6,294
Gross invested assets	124,563			128,263
ACRA noncontrolling interest	(7,077		)	(7,063		)
Net invested assets	$	117,486		$	121,200

RECONCILIATION OF INVESTMENT FUNDS INCLUDING RELATED PARTIES TO NET ALTERNATIVE INVESTMENTS
Investment funds, including related parties	$	4,300		$	5,371
Nonredeemable preferred stock included in equity securities	78			65
CLO and ABS equities included in trading securities	405			308
Investment in Apollo	—			(850		)
Investment funds within funds withheld at interest	807			927
Royalties and other assets included in other investments	67			64
Unrealized (gains) losses and other adjustments	8			14
ACRA noncontrolling interest	(79		)	(112		)
Total adjustments to arrive at net alternative investments	1,286			416
Net alternative investments	$	5,586		$	5,787

RECONCILIATION OF TOTAL LIABILITIES TO NET RESERVE LIABILITIES
Total liabilities	$	132,734		$	131,649
Short-term debt	(475		)	(400		)
Long-term debt	(992		)	(986		)
Derivative liabilities	(97		)	(222		)
Payables for collateral on derivatives and securities to repurchase	(3,255		)	(2,883		)
Funds withheld liability	(408		)	(396		)
Other liabilities	(1,181		)	(853		)
Reinsurance ceded receivables	(4,863		)	(5,087		)
Policy loans ceded	(235		)	(229		)
ACRA noncontrolling interest	(6,574		)	(6,322		)
Other	(2		)	2
Total adjustments to arrive at net reserve liabilities	(18,082		)	(17,376		)
Net reserve liabilities	$	114,652		$	114,273

Athene Holding Ltd - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - May 8, 2020

Attached files