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

Attached files

file	filename
EX-99.1 - EX-99.1 - Athene Holding Ltd	q32020pressrelease.htm
8-K - 8-K - Athene Holding Ltd	ahl-20201103.htm


Table of Contents
FINANCIAL RESULTS
Financial Highlights			3
Condensed Consolidated Statements of Income (GAAP view)			4
Segment Results of Operations (Management view)			5
Components of Adjusted Operating Return on Assets (Management view)			6
Reconciliation of Earnings Measures			7
Retirement Services Segment Highlights			8
Condensed Consolidated Balance Sheets			9

ASSETS
Investments (GAAP view)			11
Net Invested Assets (Management view)			12
Investment Funds (GAAP view)			13
Net Alternative Investments (Management view)			14
Funds Withheld at Interest (GAAP view)			15
Segment Net Investment Earned Rates (NIER)			16
NIERs by Asset Class & Apollo Investment			17
Credit Quality of Securities & Net Invested Assets			18

LIABILITIES
Net Reserve Liabilities & Rollforwards			21
Deferred Annuity Liability Characteristics			23

CAPITAL
Capitalization & Regulatory Capital Ratios			24
Financial Strength, Credit Ratings & Share Data			25

ADDITIONAL INFORMATION
Notes to the Financial Supplement			26
Non-GAAP Reconciliations			28


Financial Highlights Unaudited (in millions, except percentages and per share data)
	Quarterly Trends															Δ				Year-to-Date						Δ
	3Q’19			4Q’19			1Q’20			2Q’20			3Q’20			Q/Q		Y/Y		2019			2020			Y/Y
SELECTED INCOME STATEMENT DATA
Net income (loss) available to AHL common shareholders	$	276		$	432		$	(1,065)		$	824		$	622		(25)	%	125	%	$	1,704		$	381		(78)	%
Adjusted operating income (loss) available to common shareholders	243			389			(108)			490			302			(38)	%	24	%	900			684			(24)	%
Adjusted operating income available to common shareholders excluding notables and AOG	305			346			174			98			356			263	%	17	%	948			630			(34)	%
FINANCIAL RATIOS
Return on assets (ROA)	0.78		%	1.19		%	(2.95)		%	2.03		%	1.33		%	(70)bps		55bps		1.68		%	0.31		%	NM
Adjusted operating ROA	0.82		%	1.34		%	(0.36)		%	1.54		%	0.86		%	(68)bps		4bps		1.04		%	0.71		%	(33)bps
Adjusted operating ROA, excluding notables and AOG	1.03		%	1.19		%	0.59		%	0.31		%	1.03		%	72bps		0bps		1.09		%	0.65		%	(44)bps
Net investment spread – Retirement Services	1.13		%	1.84		%	1.03		%	0.96		%	1.41		%	45bps		28bps		1.38		%	1.14		%	(24)bps
Return on equity (ROE)	8.5		%	12.8		%	(36.5)		%	26.8		%	16.2		%	NM		NM		20.8		%	3.5		%	NM
Adjusted operating ROE	10.6		%	16.7		%	(4.4)		%	19.4		%	11.7		%	NM		110bps		13.3		%	9.1		%	NM
Adjusted operating ROE, excluding notables and AOG	13.3		%	14.9		%	7.6		%	4.5		%	16.3		%	NM		300bps		14.0		%	9.1		%	NM
Adjusted operating ROE – Retirement Services	13.5		%	21.6		%	10.6		%	11.1		%	20.2		%	NM		NM		16.0		%	14.0		%	NM
EARNINGS AND BOOK VALUE PER COMMON SHARE
Earnings (loss) per common share – basic class A	$	1.50		$	2.43		$	(5.81)		$	4.25		$	3.22		(24)	%	115	%	$	8.97		$	2.78		(69)	%
Earnings (loss) per common share – diluted class A1	1.50			2.42			(5.81)			4.19			3.16			(25)	%	111	%	8.95			2.73			(69)	%
Adjusted operating earnings (loss) per common share2	1.34			2.21			(0.60)			2.49			1.53			(39)	%	14	%	4.79			3.55			(26)	%
Adjusted operating earnings per common share excluding notables and AOG	1.67			1.97			1.00			0.58			2.10			262	%	26	%	5.04			3.69			(27)	%
Book value per common share	74.20			76.21			51.28			75.87			83.39			10	%	12	%	74.20			83.39			12	%
Adjusted book value per common share2	50.74			54.02			51.07			51.15			53.61			5	%	6	%	50.74			53.61			6	%
SELECTED BALANCE SHEET DATA
Total assets	$	144,202		$	146,875		$	142,179		$	183,241		$	191,088		4	%	33	%	$	144,202		$	191,088		33	%
Gross invested assets	121,140			124,563			128,263			161,965			167,136			3	%	38	%	121,140			167,136			38	%
Invested assets – ACRA noncontrolling interests	—			(7,077)			(7,063)			(24,696)			(24,301)			2	%	NM		—			(24,301)			NM
Net invested assets	121,140			117,486			121,200			137,269			142,835			4	%	18	%	121,140			142,835			18	%
Total liabilities	130,657			132,734			131,649			167,602			173,971			4	%	33	%	130,657			173,971			33	%
Net reserve liabilities	118,825			114,652			114,273			131,333			137,767			5	%	16	%	118,825			137,767			16	%
Debt	992			1,467			1,386			1,486			1,487			—	%	50	%	992			1,487			50	%
Total AHL shareholders’ equity	13,545			13,391			9,940			14,711			15,943			8	%	18	%	13,545			15,943			18	%
Adjusted AHL common shareholders’ equity	9,204			9,445			10,097			10,157			10,522			4	%	14	%	9,204			10,522			14	%
DEPOSITS
Retail	$	1,921		$	1,136		$	1,246		$	1,791		$	2,465		38	%	28	%	$	5,646		$	5,502		(3)	%
Flow reinsurance	609			1,196			861			2,265			2,317			2	%	280	%	2,754			5,443			98	%
Funding agreements3	503			499			823			2,636			2,619			(1)	%	NM		802			6,078			NM
Pension risk transfer	2,604			809			1,017			229			—			NM		NM		5,233			1,246			(76)	%
Gross organic deposits	5,637			3,640			3,947			6,921			7,401			7	%	31	%	14,435			18,269			27	%
Gross inorganic deposits	—			—			—			28,792			—			NM		NM		—			28,792			NM
Gross deposits	5,637			3,640			3,947			35,713			7,401			(79)	%	31	%	14,435			47,061			226	%
Deposits attributable to ACRA noncontrolling interest4	—			(544)			—			(18,268)			—			NM		NM		—			(18,268)			NM
Net deposits	$	5,637		$	3,096		$	3,947		$	17,445		$	7,401		(58)	%	31	%	$	14,435		$	28,793		99	%

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 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. 2 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. 3 Funding agreements are comprised of funding agreements issued under our FABN and FABR programs, funding agreements issued to the FHLB and long-term repurchase agreements. 4 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
	3Q’19		4Q’19		1Q’20		2Q’20		3Q’20		Q/Q		Y/Y		2019		2020		Y/Y
REVENUE
Premiums	$	2,688	$	907	$	1,140	$	355	$	112	(68)	%	(96)	%	$	5,475	$	1,607	(71)	%
Product charges	135		132		140		141		144		2	%	7	%	392		425		8	%
Net investment income	1,090		1,242		745		1,336		1,209		(10)	%	11	%	3,354		3,290		(2)	%
Investment related gains (losses)	665		965		(3,572)		2,548		1,797		(29)	%	170	%	3,754		773		(79)	%
Other revenues	6		10		(2)		18		13		(28)	%	117	%	27		29		7	%
Total revenues	$	4,584	$	3,256	$	(1,549)	$	4,398	$	3,275	(26)	%	(29)	%	$	13,002	$	6,124	(53)	%

BENEFITS AND EXPENSES
Interest sensitive contract benefits	$	801	$	1,146	$	(1,319)	$	2,076	$	1,225	(41)	%	53	%	$	3,411	$	1,982	(42)	%
Amortization of deferred sales inducements	20		36		10		(21)		48		NM		140	%	38		37		(3)	%
Future policy and other policy benefits	2,955		1,192		1,356		674		439		(35)	%	(85)	%	6,395		2,469		(61)	%
Amortization of deferred acquisition costs and value of business acquired	323		143		(413)		361		299		(17)	%	(7)	%	815		247		(70)	%
Dividends to policyholders	12		6		11		9		9		—	%	(25)	%	30		29		(3)	%
Policy and other operating expenses	194		200		188		218		231		6	%	19	%	544		637		17	%
Total benefits and expenses	4,305		2,723		(167)		3,317		2,251		(32)	%	(48)	%	11,233		5,401		(52)	%
Income (loss) before income taxes	279		533		(1,382)		1,081		1,024		(5)	%	267	%	1,769		723		(59)	%
Income tax expense (benefit)	(14)		69		(166)		150		140		(7)	%	NM		48		124		158	%
Net income (loss)	293		464		(1,216)		931		884		(5)	%	202	%	1,721		599		(65)	%
Less: Net income (loss) attributable to noncontrolling interests	—		13		(169)		88		232		164	%	NM		—		151		NM
Net income (loss) attributable to Athene Holding Ltd. shareholders	293		451		(1,047)		843		652		(23)	%	123	%	1,721		448		(74)	%
Less: Preferred stock dividends	17		19		18		19		30		58	%	76	%	17		67		294	%
Net income (loss) available to Athene Holding Ltd. common shareholders	$	276	$	432	$	(1,065)	$	824	$	622	(25)	%	125	%	$	1,704	$	381	(78)	%


Segment Results of Operations (Management view) Unaudited (in millions, except percentages and per share data)
	Quarterly Trends										Δ				Year-to-Date				Δ
	3Q’19		4Q’19		1Q’20		2Q’20		3Q’20		Q/Q		Y/Y		2019		2020		Y/Y
CONSOLIDATED
Fixed income and other investment income	$	1,168	$	1,185	$	1,188	$	1,140	$	1,225	7	%	5	%	$	3,497	$	3,553	2	%
Alternative investment income (loss)	124		154		(37)		(100)		305		NM		146	%	343		168		(51)	%
Net investment earnings	1,292		1,339		1,151		1,040		1,530		47	%	18	%	3,840		3,721		(3)	%
Cost of crediting	(576)		(521)		(540)		(560)		(640)		(14)	%	(11)	%	(1,658)		(1,740)		(5)	%
Other liability costs1	(358)		(259)		(342)		(215)		(320)		(49)	%	11	%	(913)		(877)		4	%
Cost of funds	(934)		(780)		(882)		(775)		(960)		(24)	%	(3)	%	(2,571)		(2,617)		(2)	%
Operating expenses	(79)		(86)		(79)		(88)		(78)		11	%	1	%	(248)		(245)		1	%
Interest expense	(12)		(17)		(19)		(28)		(27)		4	%	NM		(37)		(74)		(100)	%
Management fees from ACRA	—		2		2		3		9		200	%	NM		—		14		NM
Pre-tax adjusted operating income	267		458		173		152		474		212	%	78	%	984		799		(19)	%
Income tax expense – operating2	(7)		(50)		(24)		(15)		(61)		NM		NM		(67)		(100)		(49)	%
Adjusted operating income	260		408		149		137		413		201	%	59	%	917		699		(24)	%
Preferred stock dividends	(17)		(19)		(18)		(19)		(30)		(58)	%	(76)	%	(17)		(67)		NM
Adjusted operating income available to common shareholders excluding Apollo	243		389		131		118		383		225	%	58	%	900		632		(30)	%
Change in fair value of Apollo investment, net of tax3	—		—		(239)		372		(81)		NM		NM		—		52		NM
Adjusted operating income (loss) available to common shareholders	$	243	$	389	$	(108)	$	490	$	302	(38)	%	24	%	$	900	$	684	(24)	%

Adjusted operating earnings (loss) per common share	$	1.34	$	2.21	$	(0.60)	$	2.49	$	1.53	(39)	%	14	%	$	4.79	$	3.55	(26)	%

RETIREMENT SERVICES
Fixed income and other investment income	$	1,159	$	1,172	$	1,177	$	1,132	$	1,216	7	%	5	%	$	3,480	$	3,525	1	%
Alternative investment income (loss)	105		134		7		(57)		228		NM		117	%	276		178		(36)	%
Net investment earnings	1,264		1,306		1,184		1,075		1,444		34	%	14	%	3,756		3,703		(1)	%
Cost of crediting	(576)		(521)		(540)		(560)		(640)		(14)	%	(11)	%	(1,658)		(1,740)		(5)	%
Other liability costs1	(358)		(259)		(342)		(215)		(320)		(49)	%	11	%	(913)		(877)		4	%
Cost of funds	(934)		(780)		(882)		(775)		(960)		(24)	%	(3)	%	(2,571)		(2,617)		(2)	%
Operating expenses	(67)		(69)		(68)		(71)		(63)		11	%	6	%	(197)		(202)		(3)	%
Interest expense	—		(5)		(8)		(9)		(8)		11	%	NM		(3)		(25)		NM
Management fees from ACRA	—		2		2		3		9		200	%	NM		—		14		NM
Pre-tax adjusted operating income	263		454		228		223		422		89	%	60	%	985		873		(11)	%
Income tax expense – operating	(7)		(50)		(24)		(15)		(61)		NM		NM		(67)		(100)		(49)	%
Adjusted operating income available to common shareholders	$	256	$	404	$	204	$	208	$	361	74	%	41	%	$	918	$	773	(16)	%

CORPORATE & OTHER
Fixed income and other investment income	$	9	$	13	$	11	$	8	$	9	13	%	—	%	$	17	$	28	65	%
Alternative investment income (loss)	19		20		(44)		(43)		77		NM		NM		67		(10)		NM
Net investment earnings (loss)	28		33		(33)		(35)		86		NM		207	%	84		18		(79)	%
Operating expenses	(12)		(17)		(11)		(17)		(15)		12	%	(25)	%	(51)		(43)		16	%
Interest expense	(12)		(12)		(11)		(19)		(19)		—	%	(58)	%	(34)		(49)		(44)	%
Adjusted operating income (loss)	4		4		(55)		(71)		52		NM		NM		(1)		(74)		NM
Preferred stock dividends	(17)		(19)		(18)		(19)		(30)		(58)	%	(76)	%	(17)		(67)		NM
Adjusted operating income (loss) available to common shareholders excluding Apollo	(13)		(15)		(73)		(90)		22		NM		NM		(18)		(141)		NM
Change in fair value of Apollo investment, net of tax3	—		—		(239)		372		(81)		NM		NM		—		52		NM
Adjusted operating income (loss) available to common shareholders	$	(13)	$	(15)	$	(312)	$	282	$	(59)	NM		NM		$	(18)	$	(89)	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.


Components of Adjusted Operating Return on Assets (Management View) Unaudited (in millions, except percentages)
	Quarterly Trends															Δ				Year-to-Date						Δ
	3Q’19			4Q’19			1Q’20			2Q’20			3Q’20			Q/Q		Y/Y		2019			2020			Y/Y
CONSOLIDATED
Fixed income and other investment income	4.11		%	4.29		%	4.20		%	3.78		%	3.70		%	(8)bps		(41)bps		4.21		%	3.87		%	(34)bps
Alternative investment income (loss)	9.26		%	11.15		%	(2.58)		%	(6.75)		%	19.44		%	NM		NM		9.30		%	3.74		%	NM
Net investment earnings	4.35		%	4.62		%	3.87		%	3.29		%	4.41		%	112bps		6bps		4.43		%	3.87		%	(56)bps
Cost of crediting	(1.94)		%	(1.80)		%	(1.82)		%	(1.77)		%	(1.84)		%	(7)bps		10bps		(1.91)		%	(1.81)		%	10bps
Other liability costs	(1.20)		%	(0.89)		%	(1.15)		%	(0.68)		%	(0.93)		%	(25)bps		27bps		(1.05)		%	(0.91)		%	14bps
Cost of funds	(3.14)		%	(2.69)		%	(2.97)		%	(2.45)		%	(2.77)		%	(32)bps		37bps		(2.96)		%	(2.72)		%	24bps
Net investment spread	1.21		%	1.93		%	0.90		%	0.84		%	1.64		%	80bps		43bps		1.47		%	1.15		%	(32)bps
Operating expenses	(0.27)		%	(0.30)		%	(0.27)		%	(0.28)		%	(0.22)		%	6bps		5bps		(0.29)		%	(0.25)		%	4bps
Interest expense	(0.04)		%	(0.06)		%	(0.06)		%	(0.09)		%	(0.08)		%	1bps		(4)bps		(0.04)		%	(0.08)		%	(4)bps
Management fees from ACRA	—		%	—		%	0.01		%	0.01		%	0.03		%	2bps		NM		—		%	0.01		%	NM
Pre-tax adjusted operating income	0.90		%	1.57		%	0.58		%	0.48		%	1.37		%	89bps		47bps		1.14		%	0.83		%	(31)bps
Income tax expense – operating	(0.03)		%	(0.17)		%	(0.08)		%	(0.05)		%	(0.18)		%	(13)bps		(15)bps		(0.08)		%	(0.10)		%	(2)bps
Adjusted operating income	0.87		%	1.40		%	0.50		%	0.43		%	1.19		%	76bps		32bps		1.06		%	0.73		%	(33)bps
Preferred stock dividends	(0.05)		%	(0.06)		%	(0.06)		%	(0.06)		%	(0.09)		%	(3)bps		(4)bps		(0.02)		%	(0.07)		%	(5)bps
Adjusted operating income available to common shareholders excluding Apollo	0.82		%	1.34		%	0.44		%	0.37		%	1.10		%	73bps		28bps		1.04		%	0.66		%	(38)bps
Change in fair value of Apollo investment, net of tax	—		%	—		%	(0.80)		%	1.17		%	(0.24)		%	NM		NM		—		%	0.05		%	NM
Adjusted operating income (loss) available to common shareholders	0.82		%	1.34		%	(0.36)		%	1.54		%	0.86		%	(68)bps		4bps		1.04		%	0.71		%	(33)bps

Consolidated average net invested assets ex. Apollo investment	$	118,905		$	115,986		$	118,919		$	126,510		$	138,797		10	%	17	%	$	115,653		$	128,348		11	%
Consolidated average net invested assets	118,905			115,986			119,344			127,591			140,052			10	%	18	%	115,653			129,188			12	%

RETIREMENT SERVICES
Fixed income and other investment income	4.11		%	4.29		%	4.20		%	3.78		%	3.70		%	(8)bps		(41)bps		4.21		%	3.87		%	(34)bps
Alternative investment income (loss)	8.90		%	10.94		%	0.56		%	(4.38)		%	17.24		%	NM		NM		8.63		%	4.57		%	NM
Net investment earnings	4.31		%	4.57		%	4.04		%	3.44		%	4.22		%	78bps		(9)bps		4.38		%	3.90		%	(48)bps
Cost of crediting	(1.96)		%	(1.83)		%	(1.84)		%	(1.79)		%	(1.87)		%	(8)bps		9bps		(1.93)		%	(1.83)		%	10bps
Other liability costs	(1.22)		%	(0.90)		%	(1.17)		%	(0.69)		%	(0.94)		%	(25)bps		28bps		(1.07)		%	(0.93)		%	14bps
Cost of funds	(3.18)		%	(2.73)		%	(3.01)		%	(2.48)		%	(2.81)		%	(33)bps		37bps		(3.00)		%	(2.76)		%	24bps
Net investment spread	1.13		%	1.84		%	1.03		%	0.96		%	1.41		%	45bps		28bps		1.38		%	1.14		%	(24)bps
Operating expenses	(0.23)		%	(0.24)		%	(0.23)		%	(0.23)		%	(0.18)		%	5bps		5bps		(0.23)		%	(0.21)		%	2bps
Interest expense	—		%	(0.02)		%	(0.03)		%	(0.03)		%	(0.02)		%	1bps		NM		—		%	(0.03)		%	NM
Management fees from ACRA	—		%	0.01		%	0.01		%	0.01		%	0.03		%	2bps		NM		—		%	0.01		%	NM
Pre-tax adjusted operating income	0.90		%	1.59		%	0.78		%	0.71		%	1.24		%	53bps		34bps		1.15		%	0.91		%	(24)bps
Income tax expense – operating	(0.03)		%	(0.17)		%	(0.08)		%	(0.04)		%	(0.18)		%	(14)bps		(15)bps		(0.08)		%	(0.10)		%	(2)bps
Adjusted operating income available to common shareholders	0.87		%	1.42		%	0.70		%	0.67		%	1.06		%	39bps		19bps		1.07		%	0.81		%	(26)bps

Retirement Services average net invested assets	$	117,338		$	114,149		$	117,295		$	124,943		$	136,852		10	%	17	%	$	114,391		$	126,563		11	%


Reconciliation of Earnings Measures Unaudited (in millions, except percentages and per share data)
	Quarterly Trends										Δ				Year-to-Date				Δ
	3Q’19		4Q’19		1Q’20		2Q’20		3Q’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	$	276	$	432	$	(1,065)	$	824	$	622	(25)	%	125	%	$	1,704	$	381	(78)	%
Non-operating adjustments
Realized gains (losses) on sale of AFS securities	46		26		12		(11)		(11)		—	%	NM		99		(10)		NM
Unrealized, allowances and other investment gains (losses)	(31)		(12)		(369)		52		49		(6)	%	NM		8		(268)		NM
Change in fair value of reinsurance assets	314		(89)		(1,277)		1,113		434		(61)	%	38	%	1,500		270		(82)	%
Offsets to investment gains (losses)	(163)		28		495		(379)		(126)		67	%	23	%	(566)		(10)		98	%
Investment gains (losses), net of offsets	166		(47)		(1,139)		775		346		(55)	%	108	%	1,041		(18)		NM
Change in fair values of derivatives and embedded derivatives – FIAs, net of offsets	(117)		136		65		(405)		72		NM		NM		(201)		(268)		(33)	%
Integration, restructuring and other non-operating expenses	(34)		(24)		(4)		(9)		—		NM		NM		(46)		(13)		72	%
Stock compensation expense	(3)		(3)		(10)		—		(1)		NM		67	%	(9)		(11)		(22)	%
Income tax (expense) benefit – non-operating	21		(19)		131		(27)		(97)		NM		NM		19		7		(63)	%
Less: Total non-operating adjustments	33		43		(957)		334		320		(4)	%	NM		804		(303)		NM
Adjusted operating income (loss) available to common shareholders	$	243	$	389	$	(108)	$	490	$	302	(38)	%	24	%	$	900	$	684	(24)	%






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	$	1.50	$	2.43	$	(5.81)	$	4.25	$	3.22	(24)	%	115	%	$	8.97	$	2.78	(69)	%
Non-operating adjustments
Realized gains (losses) on sale of AFS securities	0.25		0.15		0.07		(0.06)		(0.06)		—	%	NM		0.52		(0.05)		NM
Unrealized, allowances and other investment gains (losses)	(0.17)		(0.07)		(2.03)		0.26		0.24		(8)	%	NM		0.04		(1.40)		NM
Change in fair value of reinsurance assets	1.72		(0.50)		(7.04)		5.66		2.20		(61)	%	28	%	7.97		1.40		(82)	%
Offsets to investment gains (losses)	(0.89)		0.16		2.73		(1.93)		(0.64)		67	%	28	%	(3.01)		(0.05)		98	%
Investment gains (losses), net of offsets	0.91		(0.26)		(6.27)		3.93		1.74		(56)	%	91	%	5.52		(0.10)		NM
Change in fair values of derivatives and embedded derivatives – FIAs, net of offsets	(0.65)		0.77		0.36		(2.06)		0.37		NM		NM		(1.07)		(1.39)		(30)	%
Integration, restructuring and other non-operating expenses	(0.18)		(0.13)		(0.03)		(0.04)		—		NM		NM		(0.24)		(0.07)		71	%
Stock compensation expense	(0.02)		(0.02)		(0.05)		—		—		NM		NM		(0.05)		(0.06)		(20)	%
Income tax (expense) benefit – non-operating	0.12		(0.11)		0.72		(0.14)		(0.49)		NM		NM		0.10		0.04		(60)	%
Less: Total non-operating adjustments	0.18		0.25		(5.27)		1.69		1.62		(4)	%	NM		4.26		(1.58)		NM
Effect of items convertible to or settled in Class A common shares	(0.02)		(0.03)		0.06		0.07		0.07		—	%	NM		(0.08)		0.81		NM
Adjusted operating earnings (loss) per common share	$	1.34	$	2.21	$	(0.60)	$	2.49	$	1.53	(39)	%	14	%	$	4.79	$	3.55	(26)	%

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
	3Q’19			4Q’19			1Q’20			2Q’20			3Q’20			Q/Q		Y/Y		2019			2020			Y/Y
NET INVESTMENT SPREAD – RETIREMENT SERVICES
Net investment earned rate	4.31		%	4.57		%	4.04		%	3.44		%	4.22		%	78bps		(9)bps		4.38		%	3.90		%	(48)bps
Cost of crediting	1.96		%	1.83		%	1.84		%	1.79		%	1.87		%	8bps		(9)bps		1.93		%	1.83		%	(10)bps
Other liability costs	1.22		%	0.90		%	1.17		%	0.69		%	0.94		%	25bps		(28)bps		1.07		%	0.93		%	(14)bps
Cost of funds	3.18		%	2.73		%	3.01		%	2.48		%	2.81		%	33bps		(37)bps		3.00		%	2.76		%	(24)bps
Net investment spread	1.13		%	1.84		%	1.03		%	0.96		%	1.41		%	45bps		28bps		1.38		%	1.14		%	(24)bps

Average net invested assets	$	117,338		$	114,149		$	117,295		$	124,943		$	136,852		10	%	17	%	$	114,391		$	126,563		11	%

COST OF CREDITING – RETIREMENT SERVICES
FIA option costs	$	265		$	252		$	248		$	252		$	264		5	%	—	%	$	795		$	764		(4)	%
Fixed interest credited to policyholders	188			177			174			199			242			22	%	29	%	550			615			12	%
Cost of crediting on deferred annuities	453			429			422			451			506			12	%	12	%	1,345			1,379			3	%
Average account value on deferred annuities	91,467			87,660			88,119			92,814			102,144			10	%	12	%	90,638			94,600			4	%
Cost of crediting on deferred annuities rate	1.98		%	1.95		%	1.91		%	1.94		%	1.98		%	4bps		0bps		1.98		%	1.94		%	(4)bps

Cost of crediting on institutional products	$	123		$	92		$	118		$	109		$	134		23	%	9	%	$	313		$	361		15	%
Average institutional reserve liabilities	13,320			12,931			14,250			15,233			18,162			19	%	36	%	11,200			15,882			42	%
Cost of crediting on institutional products rate	3.68		%	2.85		%	3.31		%	2.87		%	2.95		%	8bps		(73)bps		3.71		%	3.03		%	(68)bps

Cost of crediting	$	576		$	521		$	540		$	560		$	640		14	%	11	%	$	1,658		$	1,740		5	%






OTHER LIABILITY COSTS – RETIREMENT SERVICES
Change in rider reserve	$	114		$	124		$	183		$	128		$	119		(7)	%	4	%	$	406		$	430		6	%
DAC, DSI and VOBA amortization	226			131			127			84			178			112	%	(21)	%	442			389			(12)	%
Other1	18			4			32			3			23			NM		28	%	65			58			(11)	%
Other liability costs	$	358		$	259		$	342		$	215		$	320		49	%	(11)	%	$	913		$	877		(4)	%

INVESTMENT MARGIN ON DEFERRED ANNUITIES – RETIREMENT SERVICES
Net investment earned rate	4.31		%	4.57		%	4.04		%	3.44		%	4.22		%	78bps		(9)bps		4.38		%	3.90		%	(48)bps
Cost of crediting on deferred annuities	1.98		%	1.95		%	1.91		%	1.94		%	1.98		%	4bps		0bps		1.98		%	1.94		%	(4)bps
Investment margin on deferred annuities	2.33		%	2.62		%	2.13		%	1.50		%	2.24		%	74bps		(9)bps		2.40		%	1.96		%	(44)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		September 30, 2020		Δ
ASSETS
Investments
Available-for-sale securities, at fair value	$	71,374	$	73,988	4	%
Trading securities, at fair value	2,070		2,069		—	%
Equity securities	247		697		182	%
Mortgage loans, net of allowances	14,306		14,591		2	%
Investment funds	750		723		(4)	%
Policy loans	417		387		(7)	%
Funds withheld at interest	15,181		48,593		220	%
Derivative assets	2,888		2,771		(4)	%
Short-term investments	596		165		(72)	%
Other investments, net of allowances	158		949		NM
Total investments	107,987		144,933		34	%
Cash and cash equivalents	4,240		7,548		78	%
Restricted cash	402		1,226		205	%
Investments in related parties
Available-for-sale securities, at fair value	3,804		4,857		28	%
Trading securities, at fair value	785		1,397		78	%
Equity securities, at fair value	64		50		(22)	%
Mortgage loans, net of allowances	653		640		(2)	%
Investment funds	3,550		4,808		35	%
Funds withheld at interest	13,220		13,053		(1)	%

Other investments, net of allowances	487		467		(4)	%
Accrued investment income	807		796		(1)	%
Reinsurance recoverable	4,863		5,104		5	%
Deferred acquisition costs, deferred sales inducements and value of business acquired	5,008		5,165		3	%
Other assets	1,005		1,044		4	%
Total assets	$	146,875	$	191,088	30	%


Condensed Consolidated Balance Sheets, continued Unaudited (in millions, except percentages)
	December 31, 2019		September 30, 2020		Δ
LIABILITIES
Interest sensitive contract liabilities	$	102,745	$	141,207	37	%
Future policy benefits	23,330		24,823		6	%
Other policy claims and benefits	138		118		(14)	%
Dividends payable to policyholders	113		110		(3)	%
Short-term debt	475		—		NM
Long-term debt	992		1,487		50	%
Derivative liabilities	97		147		52	%
Payables for collateral on derivatives and securities to repurchase	3,255		3,742		15	%
Funds withheld liability	408		440		8	%
Other liabilities	1,181		1,897		61	%

Total liabilities	132,734		173,971		31	%

EQUITY
Preferred stock	—		—		NM
Common stock	—		—		NM
Additional paid-in-capital	4,171		6,045		45	%
Retained earnings	6,939		7,010		1	%
Accumulated other comprehensive income	2,281		2,888		27	%
Total Athene Holding Ltd. shareholders’ equity	13,391		15,943		19	%
Noncontrolling interests	750		1,174		57	%
Total equity	14,141		17,117		21	%
Total liabilities and equity	$	146,875	$	191,088	30	%


Investments (GAAP view) Unaudited (in millions, except percentages)
	December 31, 2019				September 30, 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	—	%	$	73	—	%
U.S. state, municipal and political subdivisions	1,541		1.2	%	927		0.5	%
Foreign governments	327		0.3	%	340		0.2	%
Corporate	47,228		36.2	%	51,129		30.1	%
CLO	7,349		5.6	%	8,370		4.9	%
ABS	5,118		3.9	%	4,200		2.6	%
CMBS	2,400		1.8	%	2,239		1.3	%
RMBS	7,375		5.7	%	6,710		3.9	%
Total available-for-sale securities, at fair value	71,374		54.7	%	73,988		43.5	%
Trading securities, at fair value	2,070		1.6	%	2,069		1.2	%
Equity securities	247		0.2	%	697		0.4	%
Mortgage loans, net of allowances	14,306		11.0	%	14,591		8.6	%
Investment funds	750		0.6	%	723		0.4	%
Policy loans	417		0.3	%	387		0.2	%
Funds withheld at interest	15,181		11.6	%	48,593		28.5	%
Derivative assets	2,888		2.2	%	2,771		1.6	%
Short-term investments	596		0.5	%	165		0.1	%
Other investments	158		0.1	%	949		0.6	%
Total investments	107,987		82.8	%	144,933		85.1	%
Investments in related parties
Available-for-sale securities, at fair value
Corporate	19		—	%	784		0.5	%
CLO	936		0.7	%	1,344		0.8	%
ABS	2,849		2.2	%	2,729		1.6	%
Total available-for-sale securities, at fair value	3,804		2.9	%	4,857		2.9	%
Trading securities, at fair value	785		0.6	%	1,397		0.8	%
Equity securities, at fair value	64		—	%	50		—	%
Mortgage loans	653		0.5	%	640		0.4	%
Investment funds	3,550		2.7	%	4,808		2.8	%
Funds withheld at interest	13,220		10.1	%	13,053		7.7	%

Other investments	487		0.4	%	467		0.3	%
Total investments in related parties	22,563		17.2	%	25,272		14.9	%
Total investments including related parties	$	130,550	100.0	%	$	170,205	100.0	%


Net Invested Assets (Management view) Unaudited (in millions, except percentages)
	December 31, 2019				September 30, 2020
	Invested Asset Value1		Percent of Total		Invested Asset Value1		Percent of Total
NET INVESTED ASSETS
Corporate	$	55,077	46.9	%	$	68,479	47.9	%
CLO	10,223		8.7	%	12,958		9.1	%
Credit	65,300		55.6	%	81,437		57.0	%
RMBS	8,394		7.1	%	8,278		5.8	%
CML	14,038		12.0	%	16,210		11.3	%
RML	4,490		3.8	%	4,243		3.0	%
CMBS	2,930		2.5	%	3,379		2.4	%

Real estate	29,852		25.4	%	32,110		22.5	%
ABS	10,317		8.8	%	10,423		7.3	%
Alternative investments	5,586		4.8	%	6,448		4.5	%
State, municipal, political subdivisions and foreign government	2,260		1.9	%	2,057		1.4	%

Equity securities	365		0.3	%	406		0.3	%
Short-term investments	624		0.5	%	685		0.5	%
U.S. government and agencies	49		—	%	85		0.1	%
Other investments	19,201		16.3	%	20,104		14.1	%
Cash and equivalents	1,958		1.7	%	6,682		4.7	%
Policy loans and other	1,175		1.0	%	1,304		0.9	%
Net invested assets excluding investment in Apollo	117,486		100.0	%	141,637		99.2	%
Investment in Apollo	—		—	%	1,198		0.8	%
Net invested assets	$	117,486	100.0	%	$	142,835	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				September 30, 2020
	Carrying Value		Percent of Total		Carrying Value		Percent of Total
INVESTMENT FUNDS INCLUDING RELATED PARTIES1
Investment funds
Real estate	$	277	6.4	%	$	290	5.3	%
Credit funds	153		3.6	%	110		2.0	%
Private equity	236		5.5	%	257		4.6	%
Real assets	83		2.0	%	66		1.2	%
Natural resources	1		—	%	—		—	%

Total investment funds	750		17.5	%	723		13.1	%
Investment funds – related parties
Differentiated investments
MidCap2	547		12.7	%	—		—	%
AmeriHome	487		11.3	%	666		12.1	%
Catalina	271		6.3	%	317		5.7	%
Athora	132		3.1	%	572		10.3	%
Venerable	99		2.3	%	108		2.0	%
Other	222		5.2	%	272		4.9	%
Total differentiated investments	1,758		40.9	%	1,935		35.0	%
Real estate	853		19.8	%	686		12.4	%
Credit funds	370		8.6	%	373		6.8	%
Private equity	105		2.4	%	257		4.6	%
Real assets	182		4.2	%	196		3.5	%
Natural resources	163		3.8	%	101		1.8	%
Public equities	119		2.8	%	62		1.1	%
Investment in Apollo	—		—	%	1,198		21.7	%
Total investment funds – related parties	3,550		82.5	%	4,808		86.9	%
Total investment funds including related parties	$	4,300	100.0	%	$	5,531	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. 2 The dissolution of CoInvest VII resulted in MidCap being held directly as a trading security in 3Q’20 rather than as an investment fund.


Net Alternative Investments (Management view) Unaudited (in millions, except percentages)
	December 31, 2019				September 30, 2020
	Invested Asset Value1		Percent of Total		Invested Asset Value1		Percent of Total
NET ALTERNATIVE INVESTMENTS
Retirement Services
Differentiated investments
AmeriHome	$	595	10.7	%	$	818	12.7	%
MidCap	547		9.8	%	609		9.4	%
Catalina	271		4.9	%	317		4.9	%

Venerable	99		1.8	%	108		1.7	%
Other	208		3.7	%	318		4.9	%
Total differentiated investments	1,720		30.9	%	2,170		33.6	%
Real estate	1,430		25.6	%	1,268		19.7	%
Credit	968		17.3	%	917		14.2	%
Private equity	378		6.8	%	570		8.8	%
Real assets	349		6.2	%	378		5.9	%
Natural resources	51		0.9	%	48		0.7	%
Other	58		1.0	%	—		—	%
Total Retirement Services	4,954		88.7	%	5,351		82.9	%
Corporate & Other

Athora	140		2.5	%	553		8.6	%
Credit	128		2.3	%	94		1.5	%
Natural resources	245		4.4	%	230		3.6	%
Equities2	119		2.1	%	220		3.4	%

Total Corporate & Other	632		11.3	%	1,097		17.1	%
Net alternative investments1	$	5,586	100.0	%	$	6,448	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 Equities includes our private equity investment in Jackson and a public equity position of 2.8 million shares in OneMain Holdings, Inc. (ticker: OMF) as of September 30, 2020. Equities inlcudes a public equity position of 2.8 million shares in OMF as of December 31, 2019.


Funds Withheld at Interest (GAAP view) Unaudited (in millions, except percentages)
	December 31, 2019				September 30, 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	—	%
U.S. state, municipal and political subdivisions	482		1.7	%	524		0.8	%
Foreign governments	143		0.5	%	291		0.5	%
Corporate	14,590		51.4	%	37,939		61.5	%
CLO	2,586		9.1	%	4,610		7.5	%
ABS	2,510		8.8	%	3,851		6.2	%
CMBS	756		2.7	%	2,398		3.9	%
RMBS	1,482		5.2	%	2,289		3.7	%
Total fixed maturity securities	22,564		79.5	%	51,917		84.1	%
Equity securities	74		0.3	%	96		0.2	%
Mortgage loans	4,357		15.3	%	7,003		11.4	%
Investment funds	807		2.8	%	974		1.6	%
Derivative assets	224		0.8	%	183		0.3	%
Short-term investments	157		0.6	%	1,024		1.7	%
Other investments	—		—	%	15		—	%
Cash and cash equivalents	239		0.8	%	809		1.3	%
Other assets and liabilities	(21)		(0.1)	%	(375)		(0.6)	%
Total funds withheld at interest including related parties1	$	28,401	100.0	%	$	61,646	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
	3Q’19			4Q’19			1Q’20			2Q’20			3Q’20			Q/Q		Y/Y		2019			2020			Y/Y
NIER – CONSOLIDATED
Fixed income and other investments	4.11		%	4.29		%	4.20		%	3.78		%	3.70		%	(8)bps		(41)bps		4.21		%	3.87		%	(34)bps
Alternative investments	9.26		%	11.15		%	(2.58)		%	(6.75)		%	19.44		%	NM		NM		9.30		%	3.74		%	NM
Total net investment earned rate	4.35		%	4.62		%	3.87		%	3.29		%	4.41		%	112bps		6bps		4.43		%	3.87		%	(56)bps

NIER SUMMARY – RETIREMENT SERVICES
Fixed income and other investments	4.11		%	4.29		%	4.20		%	3.78		%	3.70		%	(8)bps		(41)bps		4.21		%	3.87		%	(34)bps
Alternative investments	8.90		%	10.94		%	0.56		%	(4.38)		%	17.24		%	NM		NM		8.63		%	4.57		%	NM
Total net investment earned rate	4.31		%	4.57		%	4.04		%	3.44		%	4.22		%	78bps		(9)bps		4.38		%	3.90		%	(48)bps

Fixed income and other investment income	$	1,159		$	1,172		$	1,177		$	1,132		$	1,216		7	%	5	%	$	3,480		$	3,525		1	%
Alternatives investment income (loss)	105			134			7			(57)			228			NM		117	%	276			178			(36)	%
Total net investment earnings	$	1,264		$	1,306		$	1,184		$	1,075		$	1,444		34	%	14	%	$	3,756		$	3,703		(1)	%

Fixed income and other investments	$	112,611		$	109,250		$	112,205		$	119,720		$	131,565		10	%	17	%	$	110,126		$	121,376		10	%
Alternatives investments	4,727			4,899			5,090			5,223			5,287			1	%	12	%	4,265			5,187			22	%
Total average net invested assets	$	117,338		$	114,149		$	117,295		$	124,943		$	136,852		10	%	17	%	$	114,391		$	126,563		11	%

NIER SUMMARY – CORPORATE & OTHER
Fixed income and other investments	4.12		%	4.29		%	4.18		%	3.78		%	3.68		%	(10)bps		(44)bps		3.99		%	3.71		%	(28)bps
Alternative investments	11.95		%	12.82		%	(29.33)		%	(24.20)		%	31.35		%	NM		NM		13.79		%	(1.71)		%	NM
Total net investment earned rate	7.28		%	7.16		%	(8.14)		%	(8.91)		%	17.59		%	NM		NM		8.92		%	1.32		%	NM

Fixed income and other investment income	$	9		$	13		$	11		$	8		$	9		13	%	—	%	$	17		$	28		65	%
Alternatives investment income (loss)	19			20			(44)			(43)			77			NM		NM		67			(10)			NM
Total net investment earnings (loss)	$	28		$	33		$	(33)		$	(35)		$	86		NM		207	%	$	84		$	18		(79)	%

Fixed income and other investments	$	935		$	1,218		$	1,027		$	856		$	967		13	%	3	%	$	627		$	997		59	%
Alternatives investments	632			619			597			711			978			38	%	55	%	635			788			24	%
Total average net invested assets ex. Apollo investment	$	1,567		$	1,837		$	1,624		$	1,567		$	1,945		24	%	24	%	$	1,262		$	1,785		41	%

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
	3Q’19			4Q’19			1Q’20			2Q’20			3Q’20			Q/Q	Y/Y	2019			2020			Y/Y
NIER BY ASSET CLASS
Corporate securities	3.94		%	4.15		%	4.02		%	3.80		%	3.77		%	(3)bps	(17)bps	3.99		%	3.84		%	(15)bps
Structured securities
RMBS	4.39		%	5.03		%	5.53		%	4.61		%	4.72		%	11bps	33bps	5.21		%	4.95		%	(26)bps
CLO	4.57		%	4.45		%	4.38		%	3.74		%	2.88		%	(86)bps	NM	4.69		%	3.63		%	NM
ABS	4.14		%	3.88		%	4.48		%	3.85		%	3.78		%	(7)bps	(36)bps	4.15		%	4.04		%	(11)bps
CMBS	3.96		%	5.27		%	4.23		%	4.39		%	4.23		%	(16)bps	27bps	4.02		%	4.28		%	26bps
Total structured securities	4.33		%	4.52		%	4.69		%	4.05		%	3.73		%	(32)bps	(60)bps	4.63		%	4.15		%	(48)bps
State, municipal, political subdivisions and U.S. and foreign government	3.88		%	4.07		%	4.80		%	3.38		%	3.56		%	18bps	(32)bps	4.00		%	3.39		%	(61)bps
Mortgage loans	4.66		%	4.58		%	4.36		%	4.29		%	4.17		%	(12)bps	(49)bps	4.67		%	4.28		%	(39)bps
Alternative investments	9.26		%	11.15		%	(2.58)		%	(6.75)		%	19.44		%	NM	NM	9.30		%	3.74		%	NM
Other U.S. and Bermuda net invested assets	2.94		%	3.33		%	2.32		%	1.17		%	2.13		%	96bps	(81)bps	2.85		%	1.92		%	(93)bps
Consolidated net investment earned rate	4.35		%	4.62		%	3.87		%	3.29		%	4.41		%	112bps	6bps	4.43		%	3.87		%	(56)bps

APOLLO INVESTMENT DETAILS
Change in fair value of Apollo investment	$	—		$	—		$	(297)		$	481		$	(101)		NM	NM	$	—		$	83		NM
Income tax (expense) benefit on Apollo investment	—			—			58			(109)			20			NM	NM	—			(31)			NM
Change in fair value of Apollo investment, net of tax	$	—		$	—		$	(239)		$	372		$	(81)		NM	NM	$	—		$	52		NM

Return on Apollo investment, net of tax	—		%	—		%	(224.9)		%	137.7		%	(25.8)		%	NM	NM	—		%	8.2		%	NM
Change in fair value of Apollo investment impact on adjusted operating EPS1	$	—		$	—		$	(1.36)		$	1.79		$	(0.73)		NM	NM	$	—		$	(0.15)		NM
Adjusted operating EPS, excluding AOG	$	1.34		$	2.21		$	0.76		$	0.70		$	2.26		NM	NM	$	4.79		$	3.70		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 The impact of the Apollo investment on adjusted operating EPS includes removing the income/(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 Q1’20, 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				September 30, 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	%	$	39,246	49.8	%
2	32,336		43.0	%	34,614		43.9	%
Total investment grade	71,003		94.4	%	73,860		93.7	%
3	3,300		4.4	%	4,021		5.1	%
4	740		1.0	%	845		1.1	%
5	94		0.1	%	86		0.1	%
6	41		0.1	%	33		0.0	%
Total below investment grade	4,175		5.6	%	4,985		6.3	%
Total AFS securities including related parties	$	75,178	100.0	%	$	78,845	100.0	%

NRSRO designation
AAA/AA/A	$	28,299	37.7	%	$	30,541	38.7	%
BBB	29,032		38.6	%	29,268		37.1	%
Non-rated1	10,014		13.3	%	10,798		13.7	%
Total investment grade2	67,345		89.6	%	70,607		89.5	%
BB	3,403		4.5	%	3,920		5.0	%
B	813		1.1	%	1,009		1.3	%
CCC	1,981		2.6	%	1,698		2.2	%
CC and lower	1,076		1.4	%	988		1.2	%
Non-rated1	560		0.8	%	623		0.8	%
Total below investment grade	7,833		10.4	%	8,238		10.5	%
Total AFS securities including related parties	$	75,178	100.0	%	$	78,845	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	%	$	63,012	92.0	%

RMBS	8,001		95.3	%	7,911		95.6	%
CLO	10,053		98.3	%	12,493		96.4	%
ABS	9,476		91.8	%	9,392		90.1	%
CMBS	2,634		89.9	%	3,059		90.5	%
Total structured securities	30,164		94.7	%	32,855		93.8	%
State, municipal, political subdivisions and U.S. and foreign government	2,291		99.2	%	2,068		96.6	%
Short-term investments	597		95.5	%	669		97.7	%
Total NAIC 1 & 2 Designations	$	84,227			$	98,604

1 Securities denoted as non-rated by the NRSRO were classified as investment or non-investment grade according to the security’s respective NAIC designation. With respect to modeled LBaSS, the NAIC designation methodology differs in significant respects from the NRSRO ratings methodology. 2 We view the NAIC designation methodology as the most appropriate way to view our AFS portfolio when evaluating credit risk since a 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				September 30, 2020					December 31, 2019				September 30, 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	%	$	52,586	49.4	%	AAA/AA/A	$	33,918	37.7	%	$	40,764	38.4	%
2	38,391		42.7	%	46,018		43.3	%	BBB	33,902		37.7	%	38,838		36.5	%
Non-rated3	—		—	%	—		—	%	Non-rated3	12,448		13.9	%	15,108		14.2	%
Total investment grade	84,227		93.7	%	98,604		92.7	%	Total investment grade	80,268		89.3	%	94,710		89.1	%
3	4,056		4.5	%	5,648		5.3	%	BB	3,984		4.4	%	5,476		5.1	%
4	1,246		1.4	%	1,569		1.5	%	B	1,300		1.5	%	1,789		1.7	%
5	289		0.3	%	480		0.5	%	CCC	2,177		2.4	%	2,065		1.9	%
6	56		0.1	%	43		0.0	%	CC and lower	1,138		1.3	%	1,162		1.1	%
Non-rated3	—		—	%	—		—	%	Non-rated3	1,007		1.1	%	1,142		1.1	%
Total below investment grade	5,647		6.3	%	7,740		7.3	%	Total below investment grade	9,606		10.7	%	11,634		10.9	%
Total NAIC designated assets2	89,874		100.0	%	106,344		100.0	%	Total NRSRO designated assets2	89,874		100.0	%	106,344		100.0	%

Assets without NAIC designation									Assets without NRSRO designation
Commercial mortgage loans									Commercial mortgage loans
CM1	4,102		29.2	%	4,328		26.7	%	CM1	4,102		29.2	%	4,328		26.7	%
CM2	6,050		43.1	%	7,455		46.0	%	CM2	6,050		43.1	%	7,455		46.0	%
CM3	3,481		24.8	%	4,049		25.0	%	CM3	3,481		24.8	%	4,049		25.0	%
CM4	365		2.6	%	378		2.3	%	CM4	365		2.6	%	378		2.3	%
CM5	40		0.3	%	—		—	%	CM5	40		0.3	%	—		—	%
CM6	—		—	%	—		—	%	CM6	—		—	%	—		—	%
CM7	—		—	%	—		—	%	CM7	—		—	%	—		—	%
Total CMLs	14,038		100.0	%	16,210		100.0	%	Total CMLs	14,038		100.0	%	16,210		100.0	%
Residential mortgage loans									Residential mortgage loans
In good standing	4,423		98.5	%	4,163		98.1	%	In good standing	4,423		98.5	%	4,163		98.1	%
90 days late	34		0.8	%	41		1.0	%	90 days late	34		0.8	%	41		1.0	%
In foreclosure	33		0.7	%	39		0.9	%	In foreclosure	33		0.7	%	39		0.9	%
Total RMLs	4,490		100.0	%	4,243		100.0	%	Total RMLs	4,490		100.0	%	4,243		100.0	%
Alternative investments	5,586				6,448				Alternative investments	5,586				6,448
Investment in Apollo	—				1,198				Investment in Apollo	—				1,198
Cash and equivalents	1,958				6,682				Cash and equivalents	1,958				6,682
Equity securities	365				406				Equity securities	365				406
Other4	1,175				1,304				Other4	1,175				1,304

Net invested assets	$	117,486			$	142,835			Net invested assets	$	117,486			$	142,835

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, 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				September 30, 2020					December 31, 2019				September 30, 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	%	$	7,659	92.5	%	AAA/AA/A	$	1,068	12.7	%	$	1,169	14.1	%
2	391		4.6	%	252		3.1	%	BBB	717		8.5	%	561		6.8	%
Non-rated2	—		—	%	—		—	%	Non-rated2	2,702		32.2	%	2,721		32.9	%
Total investment grade	8,001		95.3	%	7,911		95.6	%	Total investment grade	4,487		53.4	%	4,451		53.8	%
3	311		3.7	%	288		3.5	%	BB	288		3.4	%	277		3.3	%
4	58		0.7	%	60		0.7	%	B	251		3.0	%	318		3.8	%
5	10		0.1	%	7		0.1	%	CCC	2,061		24.6	%	1,924		23.3	%
6	14		0.2	%	12		0.1	%	CC and lower	1,134		13.5	%	1,162		14.0	%
Non-rated2	—		—	%	—		—	%	Non-rated2	173		2.1	%	146		1.8	%
Total below investment grade	393		4.7	%	367		4.4	%	Total below investment grade	3,907		46.6	%	3,827		46.2	%
RMBS net invested assets	$	8,394	100.0	%	$	8,278	100.0	%	RMBS net invested assets	$	8,394	100.0	%	$	8,278	100.0	%

CREDIT QUALITY OF CLOs – NAIC DESIGNATION									CREDIT QUALITY OF CLOs – NRSRO DESIGNATION
1	$	5,796	56.7	%	$	7,885	60.8	%	AAA/AA/A	$	5,796	56.7	%	$	7,885	60.8	%
2	4,257		41.6	%	4,608		35.6	%	BBB	4,257		41.6	%	4,608		35.6	%
Non-rated2	—		—	%	—		—	%	Non-rated2	—		—	%	—		—	%
Total investment grade	10,053		98.3	%	12,493		96.4	%	Total investment grade	10,053		98.3	%	12,493		96.4	%
3	141		1.4	%	452		3.5	%	BB	141		1.4	%	452		3.5	%
4	22		0.2	%	9		0.1	%	B	22		0.2	%	9		0.1	%
5	7		0.1	%	4		—	%	CCC	7		0.1	%	4		—	%
6	—		—	%	—		—	%	CC and lower	—		—	%	—		—	%

Total below investment grade	170		1.7	%	465		3.6	%	Total below investment grade	170		1.7	%	465		3.6	%
CLOs net invested assets	$	10,223	100.0	%	$	12,958	100.0	%	CLOs net invested assets	$	10,223	100.0	%	$	12,958	100.0	%

CREDIT QUALITY OF ABS – NAIC DESIGNATION									CREDIT QUALITY OF ABS – NRSRO DESIGNATION
1	$	6,518	63.1	%	$	6,348	60.9	%	AAA/AA/A	$	5,297	51.3	%	$	5,001	48.0	%
2	2,958		28.7	%	3,044		29.2	%	BBB	2,268		22.0	%	2,278		21.9	%
Non-rated2	—		—	%	—		—	%	Non-rated2	1,911		18.5	%	2,038		19.6	%
Total investment grade	9,476		91.8	%	9,392		90.1	%	Total investment grade	9,476		91.8	%	9,317		89.5	%
3	565		5.5	%	643		6.2	%	BB	545		5.3	%	640		6.1	%
4	126		1.2	%	230		2.2	%	B	126		1.2	%	265		2.5	%
5	150		1.5	%	157		1.5	%	CCC	6		0.1	%	13		0.1	%
6	—		—	%	1		—	%	CC and lower	—		—	%	—		—	%
Non-rated2	—		—	%	—		—	%	Non-rated2	164		1.6	%	188		1.8	%
Total below investment grade	841		8.2	%	1,031		9.9	%	Total below investment grade	841		8.2	%	1,106		10.5	%
ABS net invested assets	$	10,317	100.0	%	$	10,423	100.0	%	ABS net invested assets	$	10,317	100.0	%	$	10,423	100.0	%

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


Net Reserve Liabilities & Rollforwards Unaudited (in millions, except percentages)
	December 31, 2019				September 30, 2020
	Dollars		Percent of Total		Dollars		Percent of Total
NET RESERVE LIABILITIES
Fixed indexed annuities	$	73,346	64.0	%	$	79,467	57.7	%
Fixed rate annuities	19,481		17.0	%	29,854		21.7	%
Total deferred annuities	92,827		81.0	%	109,321		79.4	%
Pension risk transfer annuities	8,230		7.2	%	9,278		6.7	%
Payout annuities	6,383		5.6	%	6,711		4.9	%
Funding agreements1	5,107		4.4	%	10,369		7.5	%
Life and other	2,105		1.8	%	2,088		1.5	%





Total net reserve liabilities	$	114,652	100.0	%	$	137,767	100.0	%


	Quarterly Trends										Δ				Year-to-Date				Δ
	3Q’19		4Q’19		1Q’20		2Q’20		3Q’20		Q/Q		Y/Y		2019		2020		Y/Y
NET RESERVE LIABILITY ROLLFORWARD
Net reserve liabilities – beginning	$	114,680	$	118,825	$	114,652	$	114,273	$	131,333	15	%	15	%	$	107,732	$	114,652	6	%
Gross deposits2	5,759		3,735		4,084		7,031		7,487		6	%	30	%	14,772		18,602		26	%
Acquisition and block reinsurance3	—		—		—		28,792		—		NM		NM		—		28,792		NM
Deposits attributable to ACRA noncontrolling interest	—		(544)		—		(18,288)		(53)		100	%	NM		—		(18,341)		NM
Net deposits	5,759		3,191		4,084		17,535		7,434		(58)	%	29	%	14,772		29,053		97	%
Net withdrawals	(2,807)		(2,497)		(2,740)		(3,282)		(2,695)		18	%	4	%	(8,494)		(8,717)		(3)	%
Sale of ACRA noncontrolling interest to ADIP and ownership changes4	—		(6,141)		—		335		—		NM		NM		—		335		NM
Other reserve changes	1,193		1,274		(1,723)		2,472		1,695		(31)	%	42	%	4,815		2,444		(49)	%
Net reserve liabilities – ending	$	118,825	$	114,652	$	114,273	$	131,333	$	137,767	5	%	16	%	$	118,825	$	137,767	16	%

ACRA NONCONTROLLING INTEREST RESERVE LIABILITY ROLLFORWARD5
Reserve liabilities – beginning	$	—	$	—	$	6,574	$	6,322	$	24,094	281	%	NM		$	—	$	6,574	NM
Deposits	—		544		—		20		53		165	%	NM		—		73		NM
Acquisition and block reinsurance3	—		—		—		18,268		—		NM		NM		—		18,268		NM
Withdrawals	—		(169)		(197)		(317)		(574)		(81)	%	NM		—		(1,088)		NM
Sale of ACRA noncontrolling interest to ADIP and ownership changes4	—		6,141		—		(335)		—		NM		NM		—		(335)		NM
Other reserve changes	—		58		(55)		136		189		39	%	NM		—		270		NM
Reserve liabilities – ending	$	—	$	6,574	$	6,322	$	24,094	$	23,762	(1)	%	NM		$	—	$	23,762	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 Funding agreements are comprised of funding agreements issued under our FABN and FABR programs, funding agreements issued to the FHLB and long-term repurchase agreements. 2 Gross 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 Acquisitions and block reinsurance transactions includes the reserve liabilities acquired in our inorganic channel at inception. Effective June 1, 2020, we entered into an agreement with Jackson National Life pursuant to which we agreed to reinsure a block of fixed and fixed indexed annuities on a funds withheld coinsurance basis providing $28.8 billion of gross deposits. 4 ACRA noncontrolling interest reserve liabilities at inception on October 1, 2019 were $6.1 billion. Effective April 1, 2020, ALRe purchased 14,000 newly issued shares in ACRA increasing our ownership from 33% to 36.55% of the economic interests. 5 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
	3Q’19		4Q’19		1Q’20		2Q’20		3Q’20		Q/Q		Y/Y		2019		2020		Y/Y
NET DEFERRED ANNUITY ACCOUNT VALUE ROLLFORWARD1
Net account value – beginning	$	91,165	$	91,768	$	88,000	$	88,238	$	100,694	14	%	10	%	$	89,435	$	88,000	(2)	%
Gross deposits2	2,483		2,237		2,013		3,913		4,604		18	%	85	%	8,259		10,530		27	%
Acquisition and block reinsurance3	—		—		—		27,404		—		NM		NM		—		27,404		NM
Deposits attributable to ACRA noncontrolling interest	—		4		—		(17,398)		(30)		100	%	NM		—		(17,428)		NM
Net deposits	2,483		2,241		2,013		13,919		4,574		(67)	%	84	%	8,259		20,506		148	%
Premium and interest bonuses	55		34		37		45		40		(11)	%	(27)	%	181		122		(33)	%
Fixed and index credits to policyholders	560		611		589		443		656		48	%	17	%	1,574		1,688		7	%
Surrenders and benefits paid	(2,382)		(2,091)		(2,288)		(2,054)		(2,248)		(9)	%	6	%	(7,361)		(6,590)		10	%
Sale of ACRA noncontrolling interest to ADIP and ownership changes4	—		(4,450)		—		221		—		NM		NM		—		221		NM
Fee and product charges	(113)		(113)		(113)		(118)		(122)		(3)	%	(8)	%	(320)		(353)		(10)	%
Net account value – ending	$	91,768	$	88,000	$	88,238	$	100,694	$	103,594	3	%	13	%	$	91,768	$	103,594	13	%

NET INSTITUTIONAL RESERVE LIABILITY ROLLFORWARD (PENSION RISK TRANSFER AND FUNDING AGREEMENTS)
Net reserve liabilities – beginning	$	11,354	$	14,371	$	13,337	$	15,036	$	17,103	14	%	51	%	$	8,536	$	13,337	56	%
Gross deposits2	3,106		1,314		1,840		2,865		2,619		(9)	%	(16)	%	6,036		7,324		21	%
Deposits attributable to ACRA noncontrolling interest	—		(548)		—		—		—		NM		NM		—		—		NM
Net deposits	3,106		766		1,840		2,865		2,619		(9)	%	(16)	%	6,036		7,324		21	%
Net withdrawals	(205)		(204)		(240)		(1,024)		(239)		77	%	(17)	%	(506)		(1,503)		NM
Sale of ACRA noncontrolling interest to ADIP and ownership changes4	—		(1,698)		—		117		—		NM		NM		—		117		NM
Other reserve changes	116		102		99		109		164		50	%	41	%	305		372		22	%
Net reserve liabilities – ending	$	14,371	$	13,337	$	15,036	$	17,103	$	19,647	15	%	37	%	$	14,371	$	19,647	37	%

Note: Please refer to Notes to the Financial Supplement section and the Non-GAAP Measure Reconciliations for discussion on net reserve liabilities. Net reserve liabilities include our economic ownership of ACRA reserve liabilities but do not include the reserve liabilities associated with the noncontrolling 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 Acquisitions and block reinsurance transactions include the reserve liabilities acquired in our inorganic channel at inception. Effective June 1, 2020, we entered into an agreement with Jackson National Life pursuant to which we agreed to reinsure a block of fixed and fixed indexed annuities on a funds withheld coinsurance basis providing $28.8 billion of gross deposits. 4 ACRA noncontrolling interest reserve liabilities at inception on October 1, 2019 were $6.1 billion. Effective April 1, 2020, ALRe purchased 14,000 newly issued shares in ACRA increasing our ownership from 33% to 36.55% of the economic interests.


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	$	25,632	24.7	%	$	25,632		24.7	%
0.0% < 2.0%	969		0.9	%	10,500			10.1	%
2.0% < 4.0%	3,987		3.9	%	14,777			14.3	%
4.0% < 6.0%	11,514		11.1	%	17,977			17.4	%
6.0% or greater	61,492		59.4	%	34,708			33.5	%
	$	103,594	100.0	%	$	103,594		100.0	%

			Surrender charge (gross)		MVA benefit			Surrender charge (net)
Aggregate surrender charge protection			5.8	%	(1.9)		%	3.9	%


	Deferred annuities		Percent of total		Average surrender charge (gross)
YEARS OF SURRENDER CHARGE REMAINING ON DEFERRED ANNUITIES NET ACCOUNT VALUE
No Surrender Charge	$	25,632	24.7	%	—	%
Less than 2	18,362		17.7	%	5.3	%
2 to less than 4	20,845		20.1	%	6.7	%
4 to less than 6	13,250		12.8	%	7.9	%
6 to less than 8	11,724		11.3	%	9.3	%
8 to less than 10	10,407		10.1	%	10.3	%
10 or greater	3,374		3.3	%	14.1	%
	$	103,594	100.0	%


	At minimum guarantees		Total account value		Percent of total account value at minimum guarantees
MINIMUM GUARANTEES ON DEFERRED ANNUITIES
Fixed indexed annuities	$	17,085	$	74,349	23	%
Fixed rate annuities	11,120		29,245		38	%
Total net deferred annuities	$	28,205	$	103,594	27	%

					September 30, 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 reflect an estimate of option cost in the market.


	December 31, 2019			September 30, 2020			Δ
DEFERRED ANNUITY RIDER RESERVE SUMMARY
Net rider reserve	$	4,091		$	4,512		10	%
Net account value with rider reserves	37,377			37,765			1	%
Rider reserve as a percentage of account value with rider reserves	10.9		%	11.9		%	100bps


Capitalization & Regulatory Capital Ratios Unaudited (in millions, except percentages)
	Quarterly Trends															Δ
	3Q’19			4Q’19			1Q’20			2Q’20			3Q’20			Q/Q		Y/Y
CAPITALIZATION
Total debt	$	992		$	1,467		$	1,386		$	1,486		$	1,487		—	%	50	%
Total AHL shareholders’ equity	13,545			13,391			9,940			14,711			15,943			8	%	18	%
Total capitalization	14,537			14,858			11,326			16,197			17,430			8	%	20	%
Less: Accumulated other comprehensive income (loss) (AOCI)	2,442			2,281			(1,174)			2,184			2,888			32	%	18	%
Less: Accumulated change in fair value of reinsurance assets	727			493			(155)			615			778			27	%	7	%
Total adjusted capitalization	$	11,368		$	12,084		$	12,655		$	13,398		$	13,764		3	%	21	%

EQUITY
Total AHL shareholders’ equity	$	13,545		$	13,391		$	9,940		$	14,711		$	15,943		8	%	18	%
Less: Preferred stock	1,172			1,172			1,172			1,755			1,755			—	%	50	%
Total AHL common shareholders’ equity	12,373			12,219			8,768			12,956			14,188			10	%	15	%
Less: AOCI	2,442			2,281			(1,174)			2,184			2,888			32	%	18	%
Less: Accumulated change in fair value of reinsurance assets	727			493			(155)			615			778			27	%	7	%
Total adjusted AHL common shareholders’ equity	$	9,204		$	9,445		$	10,097		$	10,157		$	10,522		4	%	14	%

EQUITY BY SEGMENT
Retirement Services	$	7,494		$	7,443		$	8,002		$	6,957		$	7,321		5	%	(2)	%
Corporate and Other	1,710			2,002			2,095			3,200			3,201			—	%	87	%
Total adjusted AHL common shareholders’ equity	$	9,204		$	9,445		$	10,097		$	10,157		$	10,522		4	%	14	%

FINANCIAL LEVERAGE
Debt to capital ratio	6.8		%	9.9		%	12.2		%	9.2		%	8.5		%	(70)bps		170bps
AOCI	1.5		%	1.8		%	(1.1)		%	1.5		%	1.8		%	30bps		30bps
Accumulated change in fair value of reinsurance assets	0.4		%	0.4		%	(0.1)		%	0.4		%	0.5		%	10bps		10bps
Adjusted debt to capital ratio	8.7		%	12.1		%	11.0		%	11.1		%	10.8		%	(30)bps		210bps


	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 Retirement Services 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 with certain adjustments made by management.

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

Athene Annuity and Life Company

Athene Annuity & Life Assurance Company of New York

Athene Life Insurance Company of New York

Not Rated

Athene Life Re Ltd.

Athene Life Re International Ltd.

Athene Co-Invest Reinsurance Affiliate 1A Ltd. and Athene Co-Invest Reinsurance Affiliate 1B Ltd.

Athene Co-Invest Reinsurance Affiliate International Ltd.

CREDIT RATINGS

Athene Holding Ltd.

bbb

BBB+

Senior notes

bbb

BBB+

BBB


	Quarterly Trends					Δ				Year-to-Date		Δ
	3Q’19	4Q’19	1Q’20	2Q’20	3Q’20	Q/Q		Y/Y		2019	2020	Y/Y
SHARE DATA
Weighted average common shares outstanding – basic – Class A	151.6	144.5	161.4	193.9	193.1	—	%	27	%	157.2	182.8	16	%
Weighted average common shares outstanding – diluted – Class A1	152.0	145.1	161.4	196.9	197.1	—	%	30	%	157.6	185.9	18	%
Weighted average common shares outstanding – adjusted operating2	182.3	175.7	181.5	196.9	197.1	—	%	8	%	188.1	192.5	2	%
Weighted average common shares outstanding – adjusted operating excluding Apollo3	182.3	175.7	173.3	168.9	169.1	—	%	(7)	%	188.1	170.7	(9)	%
Common shares outstanding4	182.5	175.7	193.9	193.9	191.2	(1)	%	5	%	182.5	191.2	5	%
Adjusted operating common shares outstanding2	181.4	174.9	197.7	198.6	196.3	(1)	%	8	%	181.4	196.3	8	%

1 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. 2 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. 3 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. 4 Represents common shares vested and outstanding for all classes eligible to participate in dividends for each period presented.


Notes to the Financial Supplement

KEY OPERATING AND NON-GAAP MEASURES

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

ADJUSTED OPERATING INCOME (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 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
	3Q’19		4Q’19		1Q’20		2Q’20		3Q’20		2019		2020
RECONCILIATION OF BOOK VALUE PER COMMON SHARE TO ADJUSTED BOOK VALUE PER COMMON SHARE
Book value per common share	$	74.20	$	76.21	$	51.28	$	75.87	$	83.39
Preferred stock	(6.42)		(6.67)		(6.04)		(9.05)		(9.18)
AOCI	(13.38)		(12.98)		6.06		(11.26)		(15.10)
Accumulated change in fair value of reinsurance assets	(3.98)		(2.80)		0.80		(3.17)		(4.07)
Effect of items convertible to or settled in Class A common shares	0.32		0.26		(1.03)		(1.24)		(1.43)
Adjusted book value per common share	$	50.74	$	54.02	$	51.07	$	51.15	$	53.61

RECONCILIATION OF AVERAGE AHL SHAREHOLDERS’ EQUITY TO AVERAGE ADJUSTED AHL COMMON SHAREHOLDERS’ EQUITY
Average AHL shareholders’ equity	$	12,955	$	13,468	$	11,666	$	12,326	$	15,327	$	10,911	$	14,667
Less: Average preferred stock	1,006		1,172		1,172		1,464		1,755		586		1,464
Less: Average AOCI	2,101		2,362		554		505		2,536		985		2,585
Less: Average accumulated change in fair value of reinsurance assets	683		610		169		230		697		326		636
Average adjusted AHL common shareholders’ equity	$	9,165	$	9,324	$	9,771	$	10,127	$	10,339	$	9,014	$	9,982

Retirement Services	$	7,598	$	7,468	$	7,722	$	7,480	$	7,139	$	7,651	$	7,381
Corporate and Other	1,567		1,856		2,049		2,647		3,200		1,363		2,601
Average adjusted AHL common shareholders’ equity	$	9,165	$	9,324	$	9,771	$	10,127	$	10,339	$	9,014	$	9,982

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	151.6		144.5		161.4		193.9		193.1		157.2		182.8
Conversion of Class B common shares to Class A common shares	25.4		25.4		16.9		—		—		25.4		5.6
Conversion of Class M common shares to Class A common shares	4.9		5.2		3.2		—		—		5.1		0.9
Effect of other stock compensation plans	0.4		0.6		—		3.0		4.0		0.4		3.2
Weighted average common shares outstanding – adjusted operating	182.3		175.7		181.5		196.9		197.1		188.1		192.5

RECONCILIATION OF CLASS A COMMON SHARES OUTSTANDING TO ADJUSTED OPERATING COMMON SHARES OUTSTANDING
Class A common shares outstanding	149.8		142.8		193.9		193.9		191.2
Conversion of Class B common shares to Class A common shares	25.4		25.4		—		—		—
Conversion of Class M common shares to Class A common shares	5.1		5.5		—		—		—
Effect of other stock compensation plans	1.1		1.2		3.8		4.7		5.1
Adjusted operating common shares outstanding	181.4		174.9		197.7		198.6		196.3


Non-GAAP Reconciliations Unaudited (in millions, except percentages)
	Quarterly Trends										Year-to-Date
	3Q’19		4Q’19		1Q’20		2Q’20		3Q’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	$	276	$	432	$	(1,065)	$	824	$	622	$	1,704	$	381
Less: Total non-operating adjustments	33		43		(957)		334		320		804		(303)
Adjusted operating income (loss) available to common shareholders	243		389		(108)		490		302		900		684
Notable items	62		(43)		43		(20)		(27)		48		(2)
Adjusted operating income (loss) available to common shareholders excluding notable items	$	305	$	346	$	(65)	$	470	$	275	$	948	$	682

Retirement Services adjusted operating income available to common shareholders	$	256	$	404	$	204	$	208	$	361	$	918	$	773
Non-recurring adjustment on derivative collateral	—		—		—		—		(25)		—		(25)



Actuarial experience and market impacts	18		(47)		50		(22)		—		4		29
Unlocking	48		—		—		—		(6)		48		(6)
Tax impact of notable items	(4)		4		(7)		2		4		(4)		—
Retirement Services notable items	62		(43)		43		(20)		(27)		48		(2)
Retirement Services adjusted operating income available to common shareholders excluding notable items	318		361		247		188		334		966		771

Corporate and Other adjusted operating income (loss) available to common shareholders	(13)		(15)		(312)		282		(59)		(18)		(89)
Adjusted operating income (loss) available to common shareholders excluding notable items	305		346		(65)		470		275		948		682
Less: Change in fair value of Apollo investment, net of tax	—		—		(239)		372		(81)		—		52
Adjusted operating income available to common shareholders excluding notables and AOG	$	305	$	346	$	174	$	98	$	356	$	948	$	630


Non-GAAP Reconciliations Unaudited (in millions, except percentages)
	Quarterly Trends															Year-to-Date
	3Q’19			4Q’19			1Q’20			2Q’20			3Q’20			2019			2020
RECONCILIATION OF NET INVESTMENT INCOME TO NET INVESTMENT EARNINGS
GAAP net investment income	$	1,090		$	1,242		$	745		$	1,336		$	1,209		$	3,354		$	3,290
Change in fair value of reinsurance assets	199			188			270			218			444			492			932

Alternative income gain (loss)	6			(12)			(101)			56			23			13			(22)
ACRA noncontrolling interest	—			(61)			(72)			(81)			(196)			—			(349)
Apollo investment (income) loss	—			—			297			(481)			101			—			(83)
Held for trading amortization and other	(3)			(18)			12			(8)			(51)			(19)			(47)
Total adjustments to arrive at net investment earnings	202			97			406			(296)			321			486			431
Total net investment earnings	$	1,292		$	1,339		$	1,151		$	1,040		$	1,530		$	3,840		$	3,721

Retirement Services	$	1,264		$	1,306		$	1,184		$	1,075		$	1,444		$	3,756		$	3,703
Corporate and Other	28			33			(33)			(35)			86			84			18
Total net investment earnings	$	1,292		$	1,339		$	1,151		$	1,040		$	1,530		$	3,840		$	3,721

RECONCILIATION OF NET INVESTMENT INCOME RATE TO NET INVESTMENT EARNED RATE
GAAP net investment income rate	3.67		%	4.28		%	2.51		%	4.22		%	3.48		%	3.87		%	3.42		%
Change in fair value of reinsurance assets	0.67		%	0.65		%	0.90		%	0.69		%	1.28		%	0.57		%	0.97		%

Alternative income gain (loss)	0.02		%	(0.04)		%	(0.34)		%	0.18		%	0.07		%	0.01		%	(0.02)		%
ACRA noncontrolling interest	—		%	(0.21)		%	(0.24)		%	(0.26)		%	(0.56)		%	—		%	(0.36)		%
Apollo investment (income) loss	—		%	—		%	1.00		%	(1.52)		%	0.29		%	—		%	(0.09)		%
Held for trading amortization and other	(0.01)		%	(0.06)		%	0.04		%	(0.02)		%	(0.15)		%	(0.02)		%	(0.05)		%
Total adjustments to arrive at net investment earned rate	0.68		%	0.34		%	1.36		%	(0.93)		%	0.93		%	0.56		%	0.45		%
Consolidated net investment earned rate	4.35		%	4.62		%	3.87		%	3.29		%	4.41		%	4.43		%	3.87		%

Retirement Services	4.31		%	4.57		%	4.04		%	3.44		%	4.22		%	4.38		%	3.90		%
Corporate and Other	7.28		%	7.16		%	(8.14)		%	(8.91)		%	17.59		%	8.92		%	1.32		%
Consolidated net investment earned rate	4.35		%	4.62		%	3.87		%	3.29		%	4.41		%	4.43		%	3.87		%

Retirement Services	$	117,338		$	114,149		$	117,295		$	124,943		$	136,852		$	114,391		$	126,563
Corporate and Other ex. Apollo investment	1,567			1,837			1,624			1,567			1,945			1,262			1,785
Consolidated average net invested assets ex. Apollo investment	$	118,905		$	115,986		$	118,919		$	126,510		$	138,797		$	115,653		$	128,348


Non-GAAP Reconciliations Unaudited (in millions, except percentages)
	Quarterly Trends															Year-to-Date
	3Q’19			4Q’19			1Q’20			2Q’20			3Q’20			2019			2020
RECONCILIATION OF INTEREST SENSITIVE CONTRACT BENEFITS TO COST OF CREDITING
GAAP interest sensitive contract benefits	$	801		$	1,146		$	(1,319)		$	2,076		$	1,225		$	3,411		$	1,982
Interest credited other than deferred annuities and institutional products	63			64			63			75			73			168			211
FIA option costs	282			269			266			271			284			840			821
Product charges (strategy fees)	(31)			(31)			(32)			(34)			(34)			(88)			(100)
Reinsurance embedded derivative impacts	14			14			14			15			14			43			43
Change in fair values of embedded derivatives – FIAs	(560)			(905)			1,504			(1,734)			(779)			(2,739)			(1,009)
Negative VOBA amortization	9			8			7			5			3			28			15
ACRA noncontrolling interest	—			(42)			38			(113)			(151)			—			(226)

Other changes in interest sensitive contract liabilities	(2)			(2)			(1)			(1)			5			(5)			3
Total adjustments to arrive at cost of crediting	(225)			(625)			1,859			(1,516)			(585)			(1,753)			(242)
Retirement Services cost of crediting	$	576		$	521		$	540		$	560		$	640		$	1,658		$	1,740

GAAP interest sensitive contract benefits	2.73		%	4.02		%	(4.50)		%	6.65		%	3.58		%	3.98		%	2.09		%
Interest credited other than deferred annuities and institutional products	0.21		%	0.23		%	0.21		%	0.24		%	0.21		%	0.19		%	0.22		%
FIA option costs	0.96		%	0.94		%	0.91		%	0.86		%	0.83		%	0.98		%	0.86		%
Product charges (strategy fees)	(0.10)		%	(0.11)		%	(0.11)		%	(0.11)		%	(0.10)		%	(0.10)		%	(0.11)		%
Reinsurance embedded derivative impacts	0.05		%	0.05		%	0.05		%	0.05		%	0.04		%	0.05		%	0.05		%
Change in fair values of embedded derivatives – FIAs	(1.91)		%	(3.17)		%	5.13		%	(5.55)		%	(2.28)		%	(3.19)		%	(1.06)		%
Negative VOBA amortization	0.03		%	0.03		%	0.02		%	0.02		%	0.01		%	0.03		%	0.02		%
ACRA noncontrolling interest	—		%	(0.15)		%	0.13		%	(0.37)		%	(0.44)		%	—		%	(0.24)		%

Other changes in interest sensitive contract liabilities	(0.01)		%	(0.01)		%	—		%	—		%	0.02		%	(0.01)		%	—		%
Total adjustments to arrive at cost of crediting	(0.77)		%	(2.19)		%	6.34		%	(4.86)		%	(1.71)		%	(2.05)		%	(0.26)		%
Retirement Services cost of crediting	1.96		%	1.83		%	1.84		%	1.79		%	1.87		%	1.93		%	1.83		%

Retirement Services cost of crediting on deferred annuities	1.98		%	1.95		%	1.91		%	1.94		%	1.98		%	1.98		%	1.94		%
Retirement Services cost of crediting on institutional products	3.68		%	2.85		%	3.31		%	2.87		%	2.95		%	3.71		%	3.03		%
Retirement Services cost of crediting	1.96		%	1.83		%	1.84		%	1.79		%	1.87		%	1.93		%	1.83		%

Retirement Services average net invested assets	$	117,338		$	114,149		$	117,295		$	124,943		$	136,852		$	114,391		$	126,563
Average net account value on deferred annuities	91,467			87,660			88,119			92,814			102,144			90,638			94,600
Average institutional net reserve liabilities	13,320			12,931			14,250			15,233			18,162			11,200			15,882


Non-GAAP Reconciliations Unaudited (in millions)
	Quarterly Trends										Year-to-Date
	3Q’19		4Q’19		1Q’20		2Q’20		3Q’20		2019		2020
RECONCILIATION OF BENEFITS AND EXPENSES TO OTHER LIABILITY COSTS
GAAP benefits and expenses	$	4,305	$	2,723	$	(167)	$	3,317	$	2,251	$	11,233	$	5,401
Premiums	(2,688)		(907)		(1,140)		(355)		(112)		(5,475)		(1,607)
Product charges	(135)		(132)		(140)		(141)		(144)		(392)		(425)
Other revenues	(6)		(10)		2		(18)		(13)		(27)		(29)
Cost of crediting	(280)		(238)		(259)		(275)		(342)		(775)		(876)
Change in fair value of embedded derivatives - FIA, net of offsets	(497)		(1,003)		1,456		(1,445)		(863)		(2,574)		(852)
DAC, DSI and VOBA amortization related to investment gains and losses	(151)		28		425		(323)		(86)		(505)		16
Rider reserves	(9)		3		76		(46)		(21)		(61)		9
Policy and other operating expenses, excluding policy acquisition expenses	(130)		(138)		(117)		(145)		(132)		(350)		(394)

AmerUs closed block fair value liability	(46)		6		45		(100)		(15)		(158)		(70)
ACRA noncontrolling interest	—		(74)		165		(241)		(193)		—		(269)

Other changes in benefits and expenses	(5)		1		(4)		(13)		(10)		(3)		(27)
Total adjustments to arrive at other liability costs	(3,947)		(2,464)		509		(3,102)		(1,931)		(10,320)		(4,524)
Other liability costs	$	358	$	259	$	342	$	215	$	320	$	913	$	877

Retirement Services	$	358	$	259	$	342	$	215	$	320	$	913	$	877
Corporate and Other	—		—		—		—		—		—		—
Consolidated other liability costs	$	358	$	259	$	342	$	215	$	320	$	913	$	877

RECONCILIATION OF POLICY AND OTHER OPERATING EXPENSES TO OPERATING EXPENSES
Policy and other operating expenses	$	194	$	200	$	188	$	218	$	231	$	544	$	637
Interest expense	(15)		(20)		(20)		(29)		(34)		(47)		(83)
Policy acquisition expenses, net of deferrals	(63)		(62)		(71)		(73)		(99)		(194)		(243)
Integration, restructuring and other non-operating expenses	(34)		(24)		(4)		(9)		—		(46)		(13)
Stock compensation expenses	(3)		(3)		(10)		—		(1)		(9)		(11)
ACRA noncontrolling interest	—		(5)		(4)		(19)		(16)		—		(39)
Other changes in policy and other operating expenses	—		—		—		—		(3)		—		(3)
Total adjustments to arrive at operating expenses	(115)		(114)		(109)		(130)		(153)		(296)		(392)
Operating expenses	$	79	$	86	$	79	$	88	$	78	$	248	$	245

Retirement Services	$	67	$	69	$	68	$	71	$	63	$	197	$	202
Corporate and Other	12		17		11		17		15		51		43
Consolidated operating expenses	$	79	$	86	$	79	$	88	$	78	$	248	$	245


Non-GAAP Reconciliations Unaudited (in millions)
	December 31, 2019		September 30, 2020
RECONCILIATION OF TOTAL INVESTMENTS INCLUDING RELATED PARTIES TO NET INVESTED ASSETS
Total investments, including related parties	$	130,550	$	170,205
Derivative assets	(2,888)		(2,771)
Cash and cash equivalents (including restricted cash)	4,639		8,774
Accrued investment income	807		796
Payables for collateral on derivatives	(2,743)		(2,644)
Reinsurance funds withheld and modified coinsurance	(1,440)		(1,441)
VIE and VOE assets, liabilities and noncontrolling interest	25		(130)
Unrealized (gains) losses	(4,095)		(5,211)
Ceded policy loans	(235)		(221)
Net investment receivables (payables)	(57)		(705)
Allowance for credit losses	—		484
Total adjustments to arrive at gross invested assets	(5,987)		(3,069)
Gross invested assets	124,563		167,136
ACRA noncontrolling interest	(7,077)		(24,301)
Net invested assets	$	117,486	$	142,835

RECONCILIATION OF INVESTMENT FUNDS INCLUDING RELATED PARTIES TO NET ALTERNATIVE INVESTMENTS
Investment funds, including related parties	$	4,300	$	5,531
Equity securities	78		222
CLO and ABS equities included in trading securities	405		973
Investment in Apollo	—		(1,198)
Investment funds within funds withheld at interest	807		974
Royalties and other assets included in other investments	67		59

Unrealized (gains) losses and other adjustments	8		(10)
ACRA noncontrolling interest	(79)		(103)
Total adjustments to arrive at net alternative investments	1,286		917
Net alternative investments	$	5,586	$	6,448

RECONCILIATION OF TOTAL LIABILITIES TO NET RESERVE LIABILITIES
Total liabilities	$	132,734	$	173,971
Short-term debt	(475)		—
Long-term debt	(992)		(1,487)
Derivative liabilities	(97)		(147)
Payables for collateral on derivatives and securities to repurchase	(3,255)		(3,144)
Funds withheld liability	(408)		(440)
Other liabilities	(1,181)		(1,897)

Reinsurance ceded receivables	(4,863)		(5,104)
Policy loans ceded	(235)		(221)
ACRA noncontrolling interest	(6,574)		(23,762)
Other	(2)		(2)
Total adjustments to arrive at net reserve liabilities	(18,082)		(36,204)
Net reserve liabilities	$	114,652	$	137,767

Athene Holding Ltd - FORM 8-K - EX-99.2 - November 3, 2020

Attached files