02/12/2024 | Press release | Distributed by Public on 02/12/2024 15:56
Table of Contents
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FINANCIAL RESULTS
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8
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ASSETS
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LIABILITIES
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ADDITIONAL INFORMATION
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Important Notice
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Financial Highlights
Unaudited (in millions, except percentages)
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Quarterly Trends | Δ | Year-to-Date | Δ | |||||||||||||||||
4Q'22 | 1Q'23 | 2Q'23 | 3Q'23 | 4Q'23 | Q/Q | Y/Y | 2022 | 2023 | Y/Y | |||||||||||
SELECTED INCOME STATEMENT DATA
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GAAP | ||||||||||||||||||||
Net income (loss) available to AHL common stockholder | $ | 361 | $ | 721 | $ | 396 | $ | 442 | $ | 3,054 | NM | NM | $ | (3,051) | $ | 4,613 | NM | |||
Return on assets (ROA) | 0.60 | % | 1.15 | % | 0.60 | % | 0.66 | % | 4.28 | % | NM | NM | (1.27) | % | 1.72 | % | NM | |||
NON-GAAP | ||||||||||||||||||||
Spread related earnings (SRE) | $ | 697 | $ | 687 | $ | 799 | $ | 872 | $ | 749 | (14) | % | 7 | % | $ | 2,466 | $ | 3,107 | 26 | % |
Net spread | 1.42 | % | 1.36 | % | 1.52 | % | 1.68 | % | 1.41 | % | (27)bps | (1)bp | 1.31 | % | 1.49 | % | 18bps | |||
Net investment spread | 1.85 | % | 1.83 | % | 1.99 | % | 2.13 | % | 1.80 | % | (33)bps | (5)bps | 1.71 | % | 1.93 | % | 22bps | |||
Spread related earnings, excluding notable items | $ | 732 | $ | 662 | $ | 799 | $ | 782 | $ | 749 | (4) | % | 2 | % | $ | 2,469 | $ | 2,992 | 21 | % |
Net spread, excluding notable items | 1.49 | % | 1.31 | % | 1.52 | % | 1.51 | % | 1.41 | % | (10)bps | (8)bps | 1.31 | % | 1.44 | % | 13bps | |||
Net investment spread, excluding notable items | 1.92 | % | 1.78 | % | 1.99 | % | 1.96 | % | 1.80 | % | (16)bps | (12)bps | 1.71 | % | 1.88 | % | 17bps | |||
Alternative net investment income delta to long-term expectation1
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$ | 14 | $ | 148 | $ | 75 | $ | 96 | $ | 132 | 38 | % | NM | $ | 80 | $ | 451 | NM | ||
Alternative net return delta to long-term expectation | 0.45 | % | 4.88 | % | 2.47 | % | 3.25 | % | 4.53 | % | 128bps | NM | 0.58 | % | 3.78 | % | NM | |||
Impact to net spread | 0.03 | % | 0.30 | % | 0.14 | % | 0.18 | % | 0.25 | % | 7bps | 22bps | 0.04 | % | 0.21 | % | 17bps | |||
SELECTED BALANCE SHEET DATA | ||||||||||||||||||||
GAAP | ||||||||||||||||||||
Total assets
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$ | 243,931 | $ | 257,654 | $ | 269,437 | $ | 269,763 | $ | 300,708 | 11 | % | 23 | % | $ | 243,931 | $ | 300,708 | 23 | % |
Goodwill | 4,058 | 4,061 | 4,065 | 4,060 | 4,065 | - | % | - | % | 4,058 | 4,065 | - | % | |||||||
Total liabilities | 233,382 | 244,604 | 256,203 | 255,734 | 279,344 | 9 | % | 20 | % | 233,382 | 279,344 | 20 | % | |||||||
Debt | 3,658 | 3,650 | 3,642 | 3,634 | 4,209 | 16 | % | 15 | % | 3,658 | 4,209 | 15 | % | |||||||
Total AHL stockholders' equity | 7,158 | 8,698 | 8,701 | 8,537 | 13,967 | 64 | % | 95 | % | 7,158 | 13,967 | 95 | % | |||||||
Debt-to-capital ratio | 33.8 | % | 29.6 | % | 29.5 | % | 29.9 | % | 23.2 | % | NM | NM | 33.8 | % | 23.2 | % | NM | |||
NON-GAAP | ||||||||||||||||||||
Gross invested assets
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$ | 238,310 | $ | 247,673 | $ | 257,235 | $ | 261,209 | $ | 278,617 | 7 | % | 17 | % | $ | 238,310 | $ | 278,617 | 17 | % |
Invested assets - ACRA noncontrolling interests
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(41,859) | (40,924) | (43,565) | (53,114) | (61,190) | 15 | % | 46 | % | (41,859) | (61,190) | 46 | % | |||||||
Net invested assets
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196,451 | 206,749 | 213,670 | 208,095 | 217,427 | 4 | % | 11 | % | 196,451 | 217,427 | 11 | % | |||||||
Net reserve liabilities
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175,970 | 184,891 | 193,431 | 185,744 | 199,289 | 7 | % | 13 | % | 175,970 | 199,289 | 13 | % | |||||||
Notional debt | 3,400 | 3,400 | 3,400 | 3,400 | 4,000 | 18 | % | 18 | % | 3,400 | 4,000 | 18 | % | |||||||
Adjusted AHL common stockholder's equity | 16,653 | 16,505 | 17,001 | 19,089 | 20,497 | 7 | % | 23 | % | 16,653 | 20,497 | 23 | % | |||||||
Adjusted debt-to-capital ratio | 14.7 | % | 14.7 | % | 14.4 | % | 13.3 | % | 14.5 | % | 120bps | (20)bps | 14.7 | % | 14.5 | % | (20)bps | |||
INFLOWS DATA | ||||||||||||||||||||
Gross organic inflows | $ | 11,290 | $ | 11,927 | $ | 18,714 | $ | 12,942 | $ | 19,824 | 53 | % | 76 | % | $ | 47,850 | $ | 63,407 | 33 | % |
Gross inorganic inflows | - | - | - | - | 2,214 | NM | NM | - | 2,214 | NM | ||||||||||
Total gross inflows | $ | 11,290 | $ | 11,927 | $ | 18,714 | $ | 12,942 | $ | 22,038 | 70 | % | 95 | % | $ | 47,850 | $ | 65,621 | 37 | % |
Note: "NM" represents changes that are not meaningful. Please refer to the Notes to the Financial Supplement section for discussion on non-GAAP metrics and the Non-GAAP Measure Reconciliations section for reconciliations of non-GAAP metrics. Effective for the quarter ended December 31, 2023, we no longer report spread related earnings - normalized. Instead we report spread related earnings, excluding notable items. Notable items include unusual variability such as actuarial experience, assumption updates and other insurance adjustments. Notable items were removed from spread related earnings - normalized historically, and are similarly removed from spread related earnings, excluding notable items. No changes were made to line-item balances deriving spread related earnings. 1. Refers to the amount that as-reported alternative net investment income is below (above) management's long-term expectation of an 11% average annual return. Our long-term expectation is based on historical experience and provides investors with supplemental information for period-to-period comparability as well as a basis for developing expectations of future performance. There is no assurance that management's expected long-term average annual return will be achieved. Actual results may differ materially.
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Condensed Consolidated Statements of Income (Loss) (GAAP view)
Unaudited (in millions, except percentages)
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Quarterly Trends | Δ | Year-to-Date | Δ | |||||||||||||||
4Q'22 | 1Q'23 | 2Q'23 | 3Q'23 | 4Q'23 | Q/Q | Y/Y | 2022 | 2023 | Y/Y | |||||||||
REVENUES | ||||||||||||||||||
Premiums
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$ | 869 | $ | 96 | $ | 9,041 | $ | 26 | $ | 3,586 | NM | NM | $ | 11,638 | $ | 12,749 | 10 | % |
Product charges
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193 | 198 | 207 | 217 | 226 | 4 | % | 17 | % | 718 | 848 | 18 | % | |||||
Net investment income
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2,319 | 2,407 | 2,717 | 2,928 | 3,078 | 5 | % | 33 | % | 7,571 | 11,130 | 47 | % | |||||
Investment related gains (losses) | 105 | 1,065 | 366 | (2,624) | 2,621 | NM | NM | (12,706) | 1,428 | NM | ||||||||
Other revenues
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10 | 13 | 7 | 564 | 7 | (99) | % | (30) | % | (28) | 591 | NM | ||||||
Revenues of consolidated variable interest entities | ||||||||||||||||||
Net investment income | 31 | 80 | 55 | 75 | 47 | (37) | % | 52 | % | 111 | 257 | 132 | % | |||||
Investment related gains (losses) | 260 | 201 | 293 | 250 | 447 | 79 | % | 72 | % | 319 | 1,191 | 273 | % | |||||
Total revenues | 3,787 | 4,060 | 12,686 | 1,436 | 10,012 | NM | 164 | % | 7,623 | 28,194 | 270 | % | ||||||
BENEFITS AND EXPENSES
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Interest sensitive contract benefits
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1,119 | 1,289 | 2,012 | 333 | 2,595 | NM | 132 | % | 538 | 6,229 | NM | |||||||
Future policy and other policy benefits
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1,235 | 466 | 9,512 | 368 | 4,088 | NM | 231 | % | 12,465 | 14,434 | 16 | % | ||||||
Market risk benefits remeasurement (gains) losses | 32 | 346 | (71) | (441) | 570 | NM | NM | (1,657) | 404 | NM | ||||||||
Amortization of deferred acquisition costs, deferred sales inducements and value of business acquired | 126 | 138 | 153 | 211 | 186 | (12) | % | 48 | % | 444 | 688 | 55 | % | |||||
Policy and other operating expenses
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412 | 435 | 452 | 472 | 489 | 4 | % | 19 | % | 1,495 | 1,848 | 24 | % | |||||
Total benefits and expenses | 2,924 | 2,674 | 12,058 | 943 | 7,928 | NM | 171 | % | 13,285 | 23,603 | 78 | % | ||||||
Income (loss) before income taxes | 863 | 1,386 | 628 | 493 | 2,084 | NM | 141 | % | (5,662) | 4,591 | NM | |||||||
Income tax expense (benefit)1
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137 | 163 | 133 | 162 | (1,748) | NM | NM | (646) | (1,290) | (100) | % | |||||||
Net income (loss) | 726 | 1,223 | 495 | 331 | 3,832 | NM | NM | (5,016) | 5,881 | NM | ||||||||
Less: Net income (loss) attributable to noncontrolling interests | 329 | 455 | 54 | (155) | 733 | NM | 123 | % | (2,106) | 1,087 | NM | |||||||
Net income (loss) attributable to Athene Holding Ltd. stockholders | 397 | 768 | 441 | 486 | 3,099 | NM | NM | (2,910) | 4,794 | NM | ||||||||
Less: Preferred stock dividends
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36 | 47 | 45 | 44 | 45 | 2 | % | 25 | % | 141 | 181 | 28 | % | |||||
Net income (loss) available to Athene Holding Ltd. common stockholder | $ | 361 | $ | 721 | $ | 396 | $ | 442 | $ | 3,054 | NM | NM | $ | (3,051) | $ | 4,613 | NM | |
1. 4Q'23 and FY'23 include a one-time tax benefit of $1.9 billion resulting from the establishment of deferred tax assets related to the Government of Bermuda's enactment of the Corporate Income Tax Act 2023.
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Spread Related Earnings (Management view)
Unaudited (in millions, except percentages)
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Quarterly Trends | Δ | Year-to-Date | Δ | |||||||||||||||||
4Q'22 | 1Q'23 | 2Q'23 | 3Q'23 | 4Q'23 | Q/Q | Y/Y | 2022 | 2023 | Y/Y | |||||||||||
SPREAD RELATED EARNINGS | ||||||||||||||||||||
Fixed income and other net investment income | $ | 1,727 | $ | 1,958 | $ | 2,208 | $ | 2,236 | $ | 2,342 | 5 | % | 36 | % | $ | 5,707 | $ | 8,744 | 53 | % |
Alternative net investment income | 322 | 185 | 259 | 230 | 190 | (17) | % | (41) | % | 1,206 | 864 | (28) | % | |||||||
Net investment earnings | 2,049 | 2,143 | 2,467 | 2,466 | 2,532 | 3 | % | 24 | % | 6,913 | 9,608 | 39 | % | |||||||
Strategic capital management fees | 14 | 14 | 16 | 19 | 23 | 21 | % | 64 | % | 53 | 72 | 36 | % | |||||||
Cost of funds | (1,158) | (1,235) | (1,437) | (1,384) | (1,594) | 15 | % | 38 | % | (3,755) | (5,650) | 50 | % | |||||||
Net investment spread | 905 | 922 | 1,046 | 1,101 | 961 | (13) | % | 6 | % | 3,211 | 4,030 | 26 | % | |||||||
Other operating expenses | (128) | (126) | (118) | (123) | (120) | (2) | % | (6) | % | (466) | (487) | 5 | % | |||||||
Interest and other financing costs | (80) | (109) | (129) | (106) | (92) | (13) | % | 15 | % | (279) | (436) | 56 | % | |||||||
Spread related earnings | $ | 697 | $ | 687 | $ | 799 | $ | 872 | $ | 749 | (14) | % | 7 | % | $ | 2,466 | $ | 3,107 | 26 | % |
Fixed income and other net investment income | 3.76 | % | 4.13 | % | 4.46 | % | 4.58 | % | 4.66 | % | 8bps | 90bps | 3.22 | % | 4.45 | % | 123bps | |||
Alternative net investment income | 10.55 | % | 6.12 | % | 8.53 | % | 7.75 | % | 6.47 | % | NM | NM | 10.42 | % | 7.22 | % | NM | |||
Net investment earnings | 4.19 | % | 4.25 | % | 4.69 | % | 4.76 | % | 4.76 | % | 0bps | 57bps | 3.66 | % | 4.61 | % | 95bps | |||
Strategic capital management fees | 0.03 | % | 0.03 | % | 0.03 | % | 0.04 | % | 0.04 | % | 0bps | 1bp | 0.03 | % | 0.03 | % | 0bps | |||
Cost of funds | (2.37) | % | (2.45) | % | (2.73) | % | (2.67) | % | (3.00) | % | 33bps | 63bps | (1.98) | % | (2.71) | % | 73bps | |||
Net investment spread | 1.85 | % | 1.83 | % | 1.99 | % | 2.13 | % | 1.80 | % | (33)bps | (5)bps | 1.71 | % | 1.93 | % | 22bps | |||
Other operating expenses | (0.26) | % | (0.25) | % | (0.22) | % | (0.24) | % | (0.23) | % | (1)bp | (3)bps | (0.25) | % | (0.23) | % | (2)bps | |||
Interest and other financing costs | (0.17) | % | (0.22) | % | (0.25) | % | (0.21) | % | (0.16) | % | (5)bps | (1)bp | (0.15) | % | (0.21) | % | 6bps | |||
Spread related earnings | 1.42 | % | 1.36 | % | 1.52 | % | 1.68 | % | 1.41 | % | (27)bps | (1)bp | 1.31 | % | 1.49 | % | 18bps | |||
Average net invested assets - fixed income and other | $ | 183,597 | $ | 189,509 | $ | 198,063 | $ | 195,448 | $ | 201,035 | 3 | % | 9 | % | $ | 177,178 | $ | 196,514 | 11 | % |
Average net invested assets - alternatives | 12,207 | 12,091 | 12,146 | 11,864 | 11,726 | (1) | % | (4) | % | 11,564 | 11,965 | 3 | % | |||||||
Average net invested assets | $ | 195,804 | $ | 201,600 | $ | 210,209 | $ | 207,312 | $ | 212,761 | 3 | % | 9 | % | $ | 188,742 | $ | 208,479 | 10 | % |
Note: Please refer to the Notes to the Financial Supplement section for discussion on spread related earnings. |
Reconciliation of Earnings Measures
Unaudited (in millions, except percentages)
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Quarterly Trends | Δ | Year-to-Date | Δ | |||||||||||||||||
4Q'22 | 1Q'23 | 2Q'23 | 3Q'23 | 4Q'23 | Q/Q | Y/Y | 2022 | 2023 | Y/Y | |||||||||||
RECONCILIATION OF NET INCOME (LOSS) AVAILABLE TO ATHENE HOLDING LTD. COMMON STOCKHOLDER TO SPREAD RELATED EARNINGS | ||||||||||||||||||||
Net income (loss) available to Athene Holding Ltd. common stockholder | $ | 361 | $ | 721 | $ | 396 | $ | 442 | $ | 3,054 | NM | NM | $ | (3,051) | $ | 4,613 | NM | |||
Preferred stock dividends | 36 | 47 | 45 | 44 | 45 | 2 | % | 25 | % | 141 | 181 | 28 | % | |||||||
Net income (loss) attributable to noncontrolling interests | 329 | 455 | 54 | (155) | 733 | NM | 123 | % | (2,106) | 1,087 | NM | |||||||||
Net income (loss) | 726 | 1,223 | 495 | 331 | 3,832 | NM | NM | (5,016) | 5,881 | NM | ||||||||||
Income tax expense (benefit) | 137 | 163 | 133 | 162 | (1,748) | NM | NM | (646) | (1,290) | (100) | % | |||||||||
Income (loss) before income taxes | 863 | 1,386 | 628 | 493 | 2,084 | NM | 141 | % | (5,662) | 4,591 | NM | |||||||||
Realized gains (losses) on sale of AFS securities | (32) | (59) | (81) | (29) | (34) | (17) | % | (6) | % | (176) | (203) | (15) | % | |||||||
Unrealized, allowances and other investment gains (losses) | (442) | 92 | (338) | (261) | 256 | NM | NM | (3,187) | (251) | 92 | % | |||||||||
Change in fair value of reinsurance assets | 331 | 357 | (153) | (384) | 765 | NM | 131 | % | (4,084) | 585 | NM | |||||||||
Offsets to investment gains (losses) | 6 | 7 | 9 | 11 | 12 | 9 | % | 100 | % | 13 | 39 | 200 | % | |||||||
Investment gains (losses), net of offsets | (137) | 397 | (563) | (663) | 999 | NM | NM | (7,434) | 170 | NM | ||||||||||
Change in fair values of derivatives and embedded derivatives - FIAs | (24) | 143 | 206 | (141) | 59 | NM | NM | (338) | 267 | NM | ||||||||||
Non-operating change in funding agreements | (26) | (6) | 10 | 12 | 19 | 58 | % | NM | (106) | 35 | NM | |||||||||
Change in fair value of market risk benefits | 30 | (271) | 133 | 565 | (498) | NM | NM | 1,894 | (71) | NM | ||||||||||
Non-operating change in liability for future policy benefits | (4) | (1) | (45) | (5) | 2 | NM | NM | (17) | (49) | NM | ||||||||||
Non-operating change in insurance liabilities and related derivatives | (24) | (135) | 304 | 431 | (418) | NM | NM | 1,433 | 182 | (87) | % | |||||||||
Integration, restructuring and other non-operating expenses | (29) | (29) | (28) | (41) | (32) | (22) | % | 10 | % | (133) | (130) | (2) | % | |||||||
Stock compensation expense | (16) | (16) | (13) | (13) | (46) | 254 | % | 188 | % | (56) | (88) | 57 | % | |||||||
Preferred stock dividends | 36 | 47 | 45 | 44 | 45 | 2 | % | 25 | % | 141 | 181 | 28 | % | |||||||
Noncontrolling interests - pre-tax income (loss) and VIE adjustments | 336 | 435 | 84 | (137) | 787 | NM | 134 | % | (2,079) | 1,169 | NM | |||||||||
Less: Total adjustments to income (loss) before income taxes | 166 | 699 | (171) | (379) | 1,335 | NM | NM | (8,128) | 1,484 | NM | ||||||||||
Spread related earnings | $ | 697 | $ | 687 | $ | 799 | $ | 872 | $ | 749 | (14) | % | 7 | % | $ | 2,466 | $ | 3,107 | 26 | % |
Note: Please refer to the Notes to the Financial Supplement section for discussion on spread related earnings.
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Net Flows & Outflows Attributable to Athene by Type
Unaudited (in millions, except percentages)
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Quarterly Trends | Δ | Year-to-Date | Δ | |||||||||||||||||
4Q'22 | 1Q'23 | 2Q'23 | 3Q'23 | 4Q'23 | Q/Q | Y/Y | 2022 | 2023 | Y/Y | |||||||||||
NET FLOWS | ||||||||||||||||||||
Retail | $ | 7,662 | $ | 8,578 | $ | 6,782 | $ | 6,523 | $ | 13,410 | 106 | % | 75 | % | $ | 20,407 | $ | 35,293 | 73 | % |
Flow reinsurance | 1,856 | 1,793 | 2,782 | 3,174 | 2,798 | (12) | % | 51 | % | 6,186 | 10,547 | 70 | % | |||||||
Funding agreements1
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1,000 | 1,500 | 148 | 3,245 | 2,300 | (29) | % | 130 | % | 10,039 | 7,193 | (28) | % | |||||||
Pension group annuities | 772 | 56 | 9,002 | - | 1,316 | NM | 70 | % | 11,218 | 10,374 | (8) | % | ||||||||
Gross organic inflows | 11,290 | 11,927 | 18,714 | 12,942 | 19,824 | 53 | % | 76 | % | 47,850 | 63,407 | 33 | % | |||||||
Gross inorganic inflows2
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- | - | - | - | 2,214 | NM | NM | - | 2,214 | NM | ||||||||||
Total gross inflows | 11,290 | 11,927 | 18,714 | 12,942 | 22,038 | 70 | % | 95 | % | 47,850 | 65,621 | 37 | % | |||||||
Gross outflows3
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(11,064) | (6,879) | (9,135) | (10,738) | (7,116) | (34) | % | (36) | % | (27,872) | (33,868) | 22 | % | |||||||
Net flows | $ | 226 | $ | 5,048 | $ | 9,579 | $ | 2,204 | $ | 14,922 | NM | NM | $ | 19,978 | $ | 31,753 | 59 | % | ||
Inflows attributable to Athene4
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$ | 10,022 | $ | 11,896 | $ | 14,977 | $ | 3,101 | $ | 13,026 | NM | 30 | % | $ | 39,244 | $ | 43,000 | 10 | % | |
Inflows attributable to ADIP4,5
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1,268 | 31 | 3,737 | 9,841 | 9,012 | (8) | % | NM | 8,606 | 22,621 | 163 | % | ||||||||
Total gross inflows | $ | 11,290 | $ | 11,927 | $ | 18,714 | $ | 12,942 | $ | 22,038 | 70 | % | 95 | % | $ | 47,850 | $ | 65,621 | 37 | % |
Outflows attributable to Athene | $ | (9,787) | $ | (5,531) | $ | (7,891) | $ | (9,550) | $ | (5,791) | (39) | % | (41) | % | $ | (23,724) | $ | (28,763) | 21 | % |
Outflows attributable to ADIP5
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(1,277) | (1,348) | (1,244) | (1,188) | (1,325) | 12 | % | 4 | % | (4,148) | (5,105) | 23 | % | |||||||
Total gross outflows3
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$ | (11,064) | $ | (6,879) | $ | (9,135) | $ | (10,738) | $ | (7,116) | (34) | % | (36) | % | $ | (27,872) | $ | (33,868) | 22 | % |
OUTFLOWS ATTRIBUTABLE TO ATHENE BY TYPE6
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Maturity-driven, contractual-based outflows7
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$ | (1,472) | $ | (1,717) | $ | (3,981) | $ | (3,243) | $ | (1,952) | (40) | % | 33 | % | $ | (6,995) | $ | (10,893) | 56 | % |
Policyholder-driven outflows8
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(3,453) | (3,814) | (3,910) | (3,584) | (3,839) | 7 | % | 11 | % | (11,867) | (15,147) | 28 | % | |||||||
Income oriented withdrawals (planned)9
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(1,813) | (1,766) | (1,750) | (1,617) | (1,831) | 13 | % | 1 | % | (6,271) | (6,964) | 11 | % | |||||||
From policies out-of-surrender-charge (planned)10
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(1,188) | (1,480) | (1,377) | (1,326) | (1,365) | 3 | % | 15 | % | (4,259) | (5,548) | 30 | % | |||||||
From policies in-surrender-charge (unplanned)11
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(452) | (568) | (783) | (641) | (643) | - | % | 42 | % | (1,337) | (2,635) | 97 | % | |||||||
Core outflows | (4,925) | (5,531) | (7,891) | (6,827) | (5,791) | (15) | % | 18 | % | (18,862) | (26,040) | 38 | % | |||||||
Strategic reinsurance transactions12
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(4,862) | - | - | (2,723) | - | NM | NM | (4,862) | (2,723) | (44) | % | |||||||||
Outflows attributable to Athene | $ | (9,787) | $ | (5,531) | $ | (7,891) | $ | (9,550) | $ | (5,791) | (39) | % | (41) | % | $ | (23,724) | $ | (28,763) | 21 | % |
Annualized rate13
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Maturity-driven, contractual-based outflows7
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(3.0) | % | (3.4) | % | (7.6) | % | (6.3) | % | (3.7) | % | NM | 70bps | (3.7) | % | (5.2) | % | 150bps | |||
Policyholder-driven outflows8
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(7.1) | % | (7.6) | % | (7.4) | % | (6.9) | % | (7.2) | % | 30bps | 10bps | (6.3) | % | (7.3) | % | 100bps | |||
Income oriented withdrawals (planned)9
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(3.7) | % | (3.5) | % | (3.3) | % | (3.1) | % | (3.4) | % | 30bps | (30)bps | (3.3) | % | (3.3) | % | 0bps | |||
From policies out-of-surrender-charge (planned)10
|
(2.5) | % | (3.0) | % | (2.6) | % | (2.6) | % | (2.6) | % | 0bps | 10bps | (2.3) | % | (2.7) | % | 40bps | |||
From policies in-surrender-charge (unplanned)11
|
(0.9) | % | (1.1) | % | (1.5) | % | (1.2) | % | (1.2) | % | 0bps | 30bps | (0.7) | % | (1.3) | % | 60bps | |||
Core outflows | (10.1) | % | (11.0) | % | (15.0) | % | (13.2) | % | (10.9) | % | NM | 80bps | (10.0) | % | (12.5) | % | 250bps | |||
Strategic reinsurance transactions12
|
(9.9) | % | - | % | - | % | (5.2) | % | - | % | NM | NM | (2.6) | % | (1.3) | % | NM | |||
Outflows attributable to Athene | (20.0) | % | (11.0) | % | (15.0) | % | (18.4) | % | (10.9) | % | NM | NM | (12.6) | % | (13.8) | % | 120bps | |||
1 Funding agreements are comprised of funding agreements issued under our funding agreement backed notes (FABN) and secured funding agreement backed repurchase agreements (FABR) programs, funding agreements issued to the Federal Home Loan Bank (FHLB) and long-term repurchase agreements. 2 Gross inorganic inflows represent acquisitions and block reinsurance transactions. On November 6, 2023, we entered into an agreement with a Japanese counterparty, effective October 1, 2023, pursuant to which we agreed to reinsure a block of whole life insurance policies on a coinsurance basis. In conjunction with the transaction, we entered into an agreement with a leading mortality reinsurer to retrocede the mortality risk related to this block of business. 3 Gross outflows include full and partial policyholder withdrawals on deferred annuities, death benefits, pension group annuity benefit payments, payments on payout annuities, funding agreement repurchases and maturities and reinsurance outflows. 4 Effective July 1, 2023, Athene Life Re Ltd. (ALRe) sold 50% of Athene Co-Invest Reinsurance Affiliate Holding 2 Ltd.'s (together with its subsidiaries, ACRA 2) economic interests to Apollo/Athene Dedicated Investment Program II (ADIP II), resulting in approximately $6.8 billion of inflows attributable to Athene for the first six months of 2023 being retroactively attributed to ADIP II. Effective December 31, 2023, ADIP II's ownership of economic interests in ACRA 2 increased to 60%, with ALRe owning the remaining 40% of economic interests. This resulted in approximately $3.0 billion of inflows attributable to Athene for the year ended December 31, 2023 being retroactively attributed to ADIP II. These were reflected as an inflow for ADIP and a reduction of Athene inflows in 3Q'23 and 4Q'23, respectively. 5 ADIP refers to Apollo/Athene Dedicated Investment Program (ADIP I) and ADIP II and represents the noncontrolling interests in business ceded to ACRA. 6 The format and methodology of this table was updated during 1Q'23 to provide additional information. 7 Represents outflows from funding agreements, pension group annuities and multi-year guarantee fixed annuities (MYGA), all of which occur based on defined maturities or substantially lapse upon reaching their contractual term. Amounts may vary on a quarterly basis, based on the timing of original issuance. 8 Represents outflows from fixed indexed annuities and other applicable products, which have varying degrees of predictability due to policyholder actions. 9 Represents partial annuity withdrawals to meet retirement income needs within contractual annual limits. 10 Represents outflows from policies that no longer have an active surrender charge in force. 11 Represents outflows from policies with an active surrender charge in force. 12 Strategic reinsurance transaction outflows include the cession of certain inforce funding agreements to Catalina General Insurance Ltd. (Catalina) in 4Q'22 and the portion of the reinsurance business recaptured by Venerable Insurance and Annuity Company (VIAC) in 3Q'23. 13 The outflow rate is calculated as outflows attributable to Athene divided by average net invested assets for the respective period, on an annualized basis.
|
Condensed Consolidated Balance Sheets
Unaudited (in millions, except percentages)
|
||||||
December 31, 2022 | December 31, 2023 | Δ | ||||
ASSETS
|
||||||
Investments
|
||||||
Available-for-sale securities, at fair value
|
$ | 102,404 | $ | 134,338 | 31 | % |
Trading securities, at fair value
|
1,595 | 1,706 | 7 | % | ||
Equity securities | 1,487 | 1,293 | (13) | % | ||
Mortgage loans, at fair value | 27,454 | 44,115 | 61 | % | ||
Investment funds
|
79 | 109 | 38 | % | ||
Policy loans
|
347 | 334 | (4) | % | ||
Funds withheld at interest
|
32,880 | 24,359 | (26) | % | ||
Derivative assets
|
3,309 | 5,298 | 60 | % | ||
Short-term investments | 2,160 | 341 | (84) | % | ||
Other investments | 773 | 1,206 | 56 | % | ||
Total investments
|
172,488 | 213,099 | 24 | % | ||
Cash and cash equivalents
|
7,779 | 13,020 | 67 | % | ||
Restricted cash
|
628 | 1,761 | 180 | % | ||
Investments in related parties
|
||||||
Available-for-sale securities, at fair value
|
9,821 | 14,009 | 43 | % | ||
Trading securities, at fair value
|
878 | 838 | (5) | % | ||
Equity securities, at fair value
|
279 | 318 | 14 | % | ||
Mortgage loans, at fair value | 1,302 | 1,281 | (2) | % | ||
Investment funds
|
1,569 | 1,632 | 4 | % | ||
Funds withheld at interest
|
9,808 | 6,474 | (34) | % | ||
Short-term investments | - | 947 | NM | |||
Other investments, at fair value | 303 | 343 | 13 | % | ||
Accrued investment income
|
1,328 | 1,933 | 46 | % | ||
Reinsurance recoverable
|
4,358 | 4,154 | (5) | % | ||
Deferred acquisition costs, deferred sales inducements and value of business acquired
|
4,466 | 5,979 | 34 | % | ||
Goodwill | 4,058 | 4,065 | - | % | ||
Other assets
|
8,693 | 10,308 | 19 | % | ||
Assets of consolidated variable interest entities | ||||||
Investments | ||||||
Trading securities, at fair value | 1,063 | 2,136 | 101 | % | ||
Mortgage loans, at fair value | 2,055 | 2,173 | 6 | % | ||
Investment funds, at fair value | 12,480 | 15,927 | 28 | % | ||
Other investments, at fair value | 101 | 103 | 2 | % | ||
Cash and cash equivalents | 362 | 98 | (73) | % | ||
Other assets | 112 | 110 | (2) | % | ||
Total assets
|
$ | 243,931 | $ | 300,708 | 23 | % |
Condensed Consolidated Balance Sheets, continued
Unaudited (in millions, except percentages)
|
||||||
December 31, 2022 | December 31, 2023 | Δ | ||||
LIABILITIES
|
||||||
Interest sensitive contract liabilities
|
$ | 173,616 | $ | 204,670 | 18 | % |
Future policy benefits
|
42,110 | 53,287 | 27 | % | ||
Market risk benefits | 2,970 | 3,751 | 26 | % | ||
Debt | 3,658 | 4,209 | 15 | % | ||
Derivative liabilities
|
1,646 | 1,995 | 21 | % | ||
Payables for collateral on derivatives and securities to repurchase
|
6,707 | 7,536 | 12 | % | ||
Other liabilities
|
1,860 | 2,781 | 50 | % | ||
Liabilities of consolidated variable interest entities | 815 | 1,115 | 37 | % | ||
Total liabilities | 233,382 | 279,344 | 20 | % | ||
EQUITY | ||||||
Preferred stock
|
- | - | NM | |||
Common stock
|
- | - | NM | |||
Additional paid-in capital | 18,119 | 19,499 | 8 | % | ||
Retained earnings (accumulated deficit) | (3,640) | 37 | NM | |||
Accumulated other comprehensive loss | (7,321) | (5,569) | 24 | % | ||
Total Athene Holding Ltd. stockholders' equity | 7,158 | 13,967 | 95 | % | ||
Noncontrolling interests
|
3,391 | 7,397 | 118 | % | ||
Total equity | 10,549 | 21,364 | 103 | % | ||
Total liabilities and equity | $ | 243,931 | $ | 300,708 | 23 | % |
Net Invested Assets (Management view) & Agency Ratings
Unaudited (in millions, except percentages)
|
||||||||
December 31, 2022 | December 31, 2023 | |||||||
Invested Asset Value1
|
Percent of Total |
Invested Asset Value1
|
Percent of Total | |||||
NET INVESTED ASSETS | ||||||||
Corporate
|
$ | 80,800 | 41.1 | % | $ | 82,883 | 38.1 | % |
CLO
|
19,881 | 10.1 | % | 20,538 | 9.4 | % | ||
Credit
|
100,681 | 51.2 | % | 103,421 | 47.5 | % | ||
CML
|
23,750 | 12.1 | % | 25,977 | 11.9 | % | ||
RML
|
11,147 | 5.7 | % | 18,021 | 8.3 | % | ||
RMBS | 7,363 | 3.7 | % | 7,795 | 3.6 | % | ||
CMBS
|
4,495 | 2.3 | % | 5,580 | 2.6 | % | ||
Real estate
|
46,755 | 23.8 | % | 57,373 | 26.4 | % | ||
ABS
|
20,680 | 10.5 | % | 22,202 | 10.2 | % | ||
Alternative investments
|
12,079 | 6.1 | % | 11,659 | 5.4 | % | ||
State, municipal, political subdivisions and foreign government
|
2,715 | 1.4 | % | 3,384 | 1.5 | % | ||
Equity securities
|
1,737 | 0.9 | % | 1,727 | 0.8 | % | ||
Short-term investments
|
1,930 | 1.0 | % | 1,048 | 0.5 | % | ||
US government and agencies | 2,691 | 1.4 | % | 4,052 | 1.9 | % | ||
Other investments
|
41,832 | 21.3 | % | 44,072 | 20.3 | % | ||
Cash and equivalents | 5,481 | 2.8 | % | 10,467 | 4.8 | % | ||
Policy loans and other | 1,702 | 0.9 | % | 2,094 | 1.0 | % | ||
Net invested assets | $ | 196,451 | 100.0 | % | $ | 217,427 | 100.0 | % |
A.M. Best | Standard & Poor's | Fitch | Moody's | |
FINANCIAL STRENGTH RATINGS | ||||
Athene Annuity & Life Assurance Company
|
A | A+ | A+ | A1 |
Athene Annuity and Life Company
|
A | A+ | A+ | A1 |
Athene Annuity & Life Assurance Company of New York
|
A | A+ | A+ | A1 |
Athene Life Insurance Company of New York | A | NR | NR | NR |
Athene Annuity Re Ltd. | A | A+ | A+ | A1 |
Athene Life Re Ltd. | A | A+ | A+ | A1 |
Athene Life Re International Ltd. | A | A+ | A+ | A1 |
Athene Co-Invest Reinsurance Affiliate 1A Ltd. and Athene Co-Invest Reinsurance Affiliate 1B Ltd. | A | A+ | A+ | A1 |
Athene Co-Invest Reinsurance Affiliate 2A Ltd. and Athene Co-Invest Reinsurance Affiliate 2B Ltd. | A | A+ | A+ | A1 |
Athene Co-Invest Reinsurance Affiliate International Ltd. | A | A+ | A+ | A1 |
CREDIT RATINGS
|
||||
Athene Holding Ltd. | bbb+ | A- | A- | NR |
Senior notes | bbb+ | A- | BBB+ | Baa1 |
1 Please refer to the 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 investments, including related parties, to net invested assets. Net invested assets include our economic ownership of ACRA investments but do not include the investments associated with the noncontrolling interests.
|
Net Alternative Investments (Management view)
Unaudited (in millions, except percentages)
|
||||||||
December 31, 2022 | December 31, 2023 | |||||||
Invested Asset Value1
|
Percent of Total |
Invested Asset Value1
|
Percent of Total | |||||
NET ALTERNATIVE INVESTMENTS | ||||||||
Strategic origination platforms | ||||||||
Wheels | $ | 662 | 5.5 | % | $ | 691 | 5.9 | % |
Redding Ridge | 624 | 5.2 | % | 571 | 4.9 | % | ||
NNN Lease | 579 | 4.8 | % | 459 | 3.9 | % | ||
MidCap Financial | 604 | 5.0 | % | 528 | 4.5 | % | ||
Foundation Home Loans | 302 | 2.5 | % | 242 | 2.1 | % | ||
PK AirFinance | 251 | 2.1 | % | 251 | 2.2 | % | ||
Aqua Finance | 267 | 2.2 | % | 215 | 1.8 | % | ||
Other | 308 | 2.5 | % | 243 | 2.1 | % | ||
Total strategic origination platforms | 3,597 | 29.8 | % | 3,200 | 27.4 | % | ||
Strategic retirement services platforms | ||||||||
Athora | 1,012 | 8.4 | % | 1,106 | 9.5 | % | ||
Catalina | 417 | 3.4 | % | 382 | 3.3 | % | ||
FWD | 400 | 3.3 | % | 358 | 3.1 | % | ||
Challenger | 294 | 2.4 | % | 274 | 2.4 | % | ||
Venerable | 241 | 2.0 | % | 181 | 1.5 | % | ||
Other | 20 | 0.2 | % | - | - | % | ||
Total strategic retirement services platforms | 2,384 | 19.7 | % | 2,301 | 19.8 | % | ||
Apollo and other fund investments | ||||||||
Equity | ||||||||
Real estate | 1,212 | 10.0 | % | 969 | 8.3 | % | ||
Traditional private equity | 947 | 7.8 | % | 1,157 | 9.9 | % | ||
Other | 189 | 1.6 | % | 189 | 1.6 | % | ||
Total equity | 2,348 | 19.4 | % | 2,315 | 19.8 | % | ||
Hybrid | ||||||||
Real estate | 1,289 | 10.7 | % | 1,123 | 9.6 | % | ||
Other | 1,315 | 10.9 | % | 1,479 | 12.7 | % | ||
Total hybrid | 2,604 | 21.6 | % | 2,602 | 22.3 | % | ||
Yield | 885 | 7.3 | % | 867 | 7.5 | % | ||
Total Apollo and other fund investments | 5,837 | 48.3 | % | 5,784 | 49.6 | % | ||
Other2
|
261 | 2.2 | % | 374 | 3.2 | % | ||
Net alternative investments3
|
$ | 12,079 | 100.0 | % | $ | 11,659 | 100.0 | % |
1 Please refer to the 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 reconciliations of investments, including related parties, to net invested assets and investment funds, including related parties and VIEs, to net alternative investments. Net invested assets include our economic ownership of ACRA investments but do not include the investments associated with the noncontrolling interests. Net alternative invested asset values reflect Athene's ownership of Apollo Aligned Alternatives, L.P. (AAA). Athene's ownership percentage of AAA was approximately 69%, 71%, 75%, 77% and 81% as of December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, respectively. 2 Other primarily includes cash and royalties. 3 Net alternative investments do not correspond to total investment funds, including related parties and VIEs, on our condensed consolidated balance sheets. Net alternative investments adjusts the GAAP presentation to include certain equity securities that are included in AFS or trading securities in the GAAP view, investment funds included in our funds withheld at interest and modco reinsurance portfolios, royalties and other investments.
|
Credit Quality of Securities
Unaudited (in millions, except percentages)
|
||||||||
December 31, 2022 | December 31, 2023 | |||||||
CREDIT QUALITY OF AFS SECURITIES (GAAP VIEW)
|
Fair Value | Percent of Total | Fair Value | Percent of Total | ||||
NAIC designation
|
||||||||
1 A-G | $ | 58,470 | 52.1 | % | $ | 81,549 | 55.0 | % |
2 A-C | 49,067 | 43.7 | % | 61,664 | 41.5 | % | ||
Total investment grade
|
107,537 | 95.8 | % | 143,213 | 96.5 | % | ||
3 A-C | 3,302 | 3.0 | % | 3,544 | 2.4 | % | ||
4 A-C | 925 | 0.8 | % | 1,013 | 0.7 | % | ||
5 A-C | 190 | 0.2 | % | 129 | 0.1 | % | ||
6 | 271 | 0.2 | % | 448 | 0.3 | % | ||
Total below investment grade
|
4,688 | 4.2 | % | 5,134 | 3.5 | % | ||
Total AFS securities including related parties
|
$ | 112,225 | 100.0 | % | $ | 148,347 | 100.0 | % |
NRSRO designation
|
||||||||
AAA/AA/A | $ | 51,926 | 46.3 | % | $ | 71,887 | 48.5 | % |
BBB | 44,783 | 39.9 | % | 58,010 | 39.1 | % | ||
Non-rated1
|
8,985 | 8.0 | % | 11,427 | 7.7 | % | ||
Total investment grade | 105,694 | 94.2 | % | 141,324 | 95.3 | % | ||
BB
|
3,176 | 2.8 | % | 3,421 | 2.3 | % | ||
B
|
749 | 0.7 | % | 826 | 0.6 | % | ||
CCC
|
1,055 | 0.9 | % | 1,037 | 0.6 | % | ||
CC and lower
|
584 | 0.5 | % | 739 | 0.5 | % | ||
Non-rated1
|
967 | 0.9 | % | 1,000 | 0.7 | % | ||
Total below investment grade
|
6,531 | 5.8 | % | 7,023 | 4.7 | % | ||
Total AFS securities including related parties
|
$ | 112,225 | 100.0 | % | $ | 148,347 | 100.0 | % |
1 Securities denoted as non-rated by the NRSRO were classified as investment or non-investment grade according to the security's respective NAIC designation. With respect to modeled loan backed and structured securities (LBaSS), the NAIC designation methodology differs in significant respects from the NRSRO ratings methodology. NRSRO ratings methodology is focused on the likelihood of recovery of all contractual payments, including principal at par regardless of entry price, while the NAIC designation methodology considers an investment at amortized cost, and the likelihood of recovery of that book value. We view the NAIC designation methodology as the most appropriate way to view our AFS portfolio when evaluating credit risk since a portion of our holdings were purchased at a significant discount to par. |
Credit Quality of Net Invested Assets (Management view)
Unaudited (In millions, except percentages)
|
|||||||||||||||||
December 31, 2022 | December 31, 2023 | December 31, 2022 | December 31, 2023 | ||||||||||||||
Invested Asset Value1
|
% of Total |
Invested Asset Value1
|
% of Total |
Invested Asset Value1
|
% of Total |
Invested Asset Value1
|
% of Total | ||||||||||
CREDIT QUALITY OF NET INVESTED ASSETS
|
CREDIT QUALITY OF NET INVESTED ASSETS
|
||||||||||||||||
NAIC designation
|
NRSRO designation
|
||||||||||||||||
1 A-G | $ | 71,471 | 50.8 | % | $ | 79,503 | 53.9 | % | AAA/AA/A | $ | 60,869 | 43.3 | % | $ | 67,768 | 45.9 | % |
2 A-C | 62,115 | 44.2 | % | 61,775 | 41.9 | % | BBB | 56,029 | 39.9 | % | 57,345 | 38.9 | % | ||||
Non-rated | 506 | 0.4 | % | 322 | 0.2 | % |
Non-rated2
|
14,686 | 10.5 | % | 14,397 | 9.8 | % | ||||
Total investment grade
|
134,092 | 95.4 | % | 141,600 | 96.0 | % | Total investment grade | 131,584 | 93.7 | % | 139,510 | 94.6 | % | ||||
3 A-C | 4,471 | 3.2 | % | 3,833 | 2.6 | % |
BB
|
4,217 | 3.0 | % | 3,551 | 2.4 | % | ||||
4 A-C | 1,259 | 0.9 | % | 1,170 | 0.8 | % |
B
|
990 | 0.7 | % | 915 | 0.6 | % | ||||
5 A-C | 407 | 0.3 | % | 357 | 0.2 | % |
CCC
|
1,431 | 1.0 | % | 1,280 | 0.9 | % | ||||
6 | 326 | 0.2 | % | 522 | 0.4 | % |
CC and lower
|
906 | 0.6 | % | 940 | 0.6 | % | ||||
Non-rated | - | - | % | - | - | % |
Non-rated2
|
1,427 | 1.0 | % | 1,286 | 0.9 | % | ||||
Total below investment grade
|
6,463 | 4.6 | % | 5,882 | 4.0 | % |
Total below investment grade
|
8,971 | 6.3 | % | 7,972 | 5.4 | % | ||||
Total NAIC designated assets3
|
140,555 | 100.0 | % | 147,482 | 100.0 | % |
Total NRSRO designated assets3
|
140,555 | 100.0 | % | 147,482 | 100.0 | % | ||||
Assets without NAIC designation
|
Assets without NRSRO designation
|
||||||||||||||||
Commercial mortgage loans
|
Commercial mortgage loans
|
||||||||||||||||
CM1
|
3,998 | 16.8 | % | 4,384 | 16.9 | % |
CM1
|
3,998 | 16.8 | % | 4,384 | 16.9 | % | ||||
CM2
|
14,008 | 59.0 | % | 15,645 | 60.2 | % |
CM2
|
14,008 | 59.0 | % | 15,645 | 60.2 | % | ||||
CM3
|
5,216 | 22.0 | % | 5,304 | 20.4 | % |
CM3
|
5,216 | 22.0 | % | 5,304 | 20.4 | % | ||||
CM4
|
447 | 1.9 | % | 623 | 2.4 | % |
CM4
|
447 | 1.9 | % | 623 | 2.4 | % | ||||
CM5
|
81 | 0.3 | % | - | - | % |
CM5
|
81 | 0.3 | % | - | - | % | ||||
CM6
|
- | - | % | 13 | 0.1 | % |
CM6
|
- | - | % | 13 | 0.1 | % | ||||
CM7
|
- | - | % | 8 | - | % |
CM7
|
- | - | % | 8 | - | % | ||||
Total CMLs
|
23,750 | 100.0 | % | 25,977 | 100.0 | % |
Total CMLs
|
23,750 | 100.0 | % | 25,977 | 100.0 | % | ||||
Residential mortgage loans
|
Residential mortgage loans
|
||||||||||||||||
In good standing
|
10,636 | 95.4 | % | 17,503 | 97.1 | % |
In good standing
|
10,636 | 95.4 | % | 17,503 | 97.1 | % | ||||
90 days late
|
422 | 3.8 | % | 407 | 2.3 | % |
90 days late
|
422 | 3.8 | % | 407 | 2.3 | % | ||||
In foreclosure
|
89 | 0.8 | % | 111 | 0.6 | % |
In foreclosure
|
89 | 0.8 | % | 111 | 0.6 | % | ||||
Total RMLs
|
11,147 | 100.0 | % | 18,021 | 100.0 | % |
Total RMLs
|
11,147 | 100.0 | % | 18,021 | 100.0 | % | ||||
Alternative investments
|
12,079 | 11,659 |
Alternative investments
|
12,079 | 11,659 | ||||||||||||
Cash and equivalents | 5,481 | 10,467 | Cash and equivalents | 5,481 | 10,467 | ||||||||||||
Equity securities
|
1,737 | 1,727 |
Equity securities
|
1,737 | 1,727 | ||||||||||||
Other4
|
1,702 | 2,094 |
Other4
|
1,702 | 2,094 | ||||||||||||
Net invested assets
|
$ | 196,451 | $ | 217,427 |
Net invested assets
|
$ | 196,451 | $ | 217,427 | ||||||||
1 Please refer to the Notes to the Financial Supplement section for discussion on net invested assets and the Non-GAAP Measure Reconciliations section for the reconciliation of total investments, including related parties, to net invested assets. 2 Securities denoted as non-rated by the NRSRO were classified as investment or non-investment grade according to the security's respective NAIC designation. With respect to modeled LBaSS, the NAIC designation methodology differs in significant respects from the NRSRO ratings methodology. 3 NAIC and NRSRO designations include corporates, CLO, RMBS, CMBS, ABS, state, municipal, political subdivisions and foreign government securities, short-term investments and US government and agency securities. 4 Other includes policy loans, accrued interest and other net invested assets.
|
Credit Quality of Net Invested Assets - ABS and CLOs (Management view)
Unaudited (In millions, except percentages)
|
|||||||||||||||||
December 31, 2022 | December 31, 2023 | December 31, 2022 | December 31, 2023 | ||||||||||||||
Invested Asset Value1
|
% of Total |
Invested Asset Value1
|
% of Total |
Invested Asset Value1
|
% of Total |
Invested Asset Value1
|
% of Total | ||||||||||
CREDIT QUALITY OF ABS - NAIC DESIGNATION | CREDIT QUALITY OF ABS - NRSRO DESIGNATION | ||||||||||||||||
1 A-G | $ | 12,261 | 59.3 | % | $ | 13,700 | 61.7 | % | AAA/AA/A | $ | 11,780 | 57.0 | % | $ | 12,117 | 54.6 | % |
2 A-C | 7,301 | 35.3 | % | 7,227 | 32.6 | % | BBB | 7,248 | 35.0 | % | 8,407 | 37.9 | % | ||||
Non-rated | - | - | % | - | - | % |
Non-rated2
|
535 | 2.6 | % | 403 | 1.8 | % | ||||
Total investment grade | 19,562 | 94.6 | % | 20,927 | 94.3 | % | Total investment grade | 19,563 | 94.6 | % | 20,927 | 94.3 | % | ||||
3 A-C | 710 | 3.4 | % | 809 | 3.6 | % | BB | 709 | 3.4 | % | 822 | 3.6 | % | ||||
4 A-C | 229 | 1.1 | % | 261 | 1.2 | % | B | 229 | 1.1 | % | 248 | 1.1 | % | ||||
5 A-C | 157 | 0.8 | % | 125 | 0.5 | % | CCC | 33 | 0.2 | % | 12 | 0.1 | % | ||||
6 | 22 | 0.1 | % | 80 | 0.4 | % | CC and lower | 22 | 0.1 | % | 35 | 0.2 | % | ||||
Non-rated | - | - | % | - | - | % |
Non-rated2
|
124 | 0.6 | % | 158 | 0.7 | % | ||||
Total below investment grade | 1,118 | 5.4 | % | 1,275 | 5.7 | % | Total below investment grade | 1,117 | 5.4 | % | 1,275 | 5.7 | % | ||||
ABS net invested assets | $ | 20,680 | 100.0 | % | $ | 22,202 | 100.0 | % | ABS net invested assets | $ | 20,680 | 100.0 | % | $ | 22,202 | 100.0 | % |
CREDIT QUALITY OF CLOs - NAIC DESIGNATION | CREDIT QUALITY OF CLOs - NRSRO DESIGNATION | ||||||||||||||||
1 A-G | $ | 12,455 | 62.7 | % | $ | 13,232 | 64.4 | % | AAA/AA/A | $ | 12,455 | 62.7 | % | $ | 13,232 | 64.4 | % |
2 A-C | 7,278 | 36.6 | % | 7,161 | 34.9 | % | BBB | 7,278 | 36.6 | % | 7,161 | 34.9 | % | ||||
Non-rated | - | - | % | - | - | % |
Non-rated2
|
- | - | % | - | - | % | ||||
Total investment grade | 19,733 | 99.3 | % | 20,393 | 99.3 | % | Total investment grade | 19,733 | 99.3 | % | 20,393 | 99.3 | % | ||||
3 A-C | 128 | 0.6 | % | 126 | 0.6 | % | BB | 128 | 0.6 | % | 126 | 0.6 | % | ||||
4 A-C | 20 | 0.1 | % | 19 | 0.1 | % | B | 20 | 0.1 | % | 19 | 0.1 | % | ||||
5 A-C | - | - | % | - | - | % | CCC | - | - | % | - | - | % | ||||
6 | - | - | % | - | - | % | CC and lower | - | - | % | - | - | % | ||||
Non-rated | - | - | % | - | - | % |
Non-rated2
|
- | - | % | - | - | % | ||||
Total below investment grade | 148 | 0.7 | % | 145 | 0.7 | % | Total below investment grade | 148 | 0.7 | % | 145 | 0.7 | % | ||||
CLO net invested assets | $ | 19,881 | 100.0 | % | $ | 20,538 | 100.0 | % | CLO net invested assets | $ | 19,881 | 100.0 | % | $ | 20,538 | 100.0 | % |
1 Please refer to the Notes to the Financial Supplement section for discussion on net invested assets and the 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.
|
Credit Quality of Net Invested Assets - RMBS and CMBS (Management view)
Unaudited (In millions, except percentages)
|
|||||||||||||||||
December 31, 2022 | December 31, 2023 | December 31, 2022 | December 31, 2023 | ||||||||||||||
Invested Asset Value1
|
% of Total |
Invested Asset Value1
|
% of Total |
Invested Asset Value1
|
% of Total |
Invested Asset Value1
|
% of Total | ||||||||||
CREDIT QUALITY OF RMBS - NAIC DESIGNATION | CREDIT QUALITY OF RMBS - NRSRO DESIGNATION | ||||||||||||||||
1 A-G | $ | 6,125 | 83.2 | % | $ | 6,714 | 86.1 | % | AAA/AA/A | $ | 2,026 | 27.5 | % | $ | 2,344 | 30.1 | % |
2 A-C | 347 | 4.7 | % | 262 | 3.4 | % | BBB | 735 | 10.0 | % | 475 | 6.1 | % | ||||
Non-rated | - | - | % | - | - | % |
Non-rated2
|
1,647 | 22.4 | % | 2,324 | 29.8 | % | ||||
Total investment grade | 6,472 | 87.9 | % | 6,976 | 89.5 | % | Total investment grade | 4,408 | 59.9 | % | 5,143 | 66.0 | % | ||||
3 A-C | 455 | 6.2 | % | 335 | 4.3 | % | BB | 140 | 1.9 | % | 99 | 1.3 | % | ||||
4 A-C | 309 | 4.2 | % | 323 | 4.2 | % | B | 141 | 1.9 | % | 128 | 1.6 | % | ||||
5 A-C | 102 | 1.4 | % | 89 | 1.1 | % | CCC | 1,333 | 18.1 | % | 1,144 | 14.7 | % | ||||
6 | 25 | 0.3 | % | 72 | 0.9 | % | CC and lower | 834 | 11.3 | % | 835 | 10.7 | % | ||||
Non-rated | - | - | % | - | - | % |
Non-rated2
|
507 | 6.9 | % | 446 | 5.7 | % | ||||
Total below investment grade | 891 | 12.1 | % | 819 | 10.5 | % | Total below investment grade | 2,955 | 40.1 | % | 2,652 | 34.0 | % | ||||
RMBS net invested assets | $ | 7,363 | 100.0 | % | $ | 7,795 | 100.0 | % | RMBS net invested assets | $ | 7,363 | 100.0 | % | $ | 7,795 | 100.0 | % |
CREDIT QUALITY OF CMBS - NAIC DESIGNATION | CREDIT QUALITY OF CMBS - NRSRO DESIGNATION | ||||||||||||||||
1 A-G | $ | 3,191 | 71.0 | % | $ | 4,000 | 71.7 | % | AAA/AA/A | $ | 2,262 | 50.3 | % | $ | 3,447 | 61.8 | % |
2 A-C | 811 | 18.0 | % | 993 | 17.8 | % | BBB | 675 | 15.0 | % | 962 | 17.2 | % | ||||
Non-rated | - | - | % | - | - | % |
Non-rated2
|
610 | 13.6 | % | 291 | 5.2 | % | ||||
Total investment grade | 4,002 | 89.0 | % | 4,993 | 89.5 | % | Total investment grade | 3,547 | 78.9 | % | 4,700 | 84.2 | % | ||||
3 A-C | 295 | 6.6 | % | 293 | 5.3 | % | BB | 700 | 15.6 | % | 550 | 9.9 | % | ||||
4 A-C | 80 | 1.8 | % | 151 | 2.7 | % | B | 167 | 3.7 | % | 216 | 3.8 | % | ||||
5 A-C | 78 | 1.7 | % | 75 | 1.3 | % | CCC | 64 | 1.4 | % | 89 | 1.6 | % | ||||
6 | 40 | 0.9 | % | 68 | 1.2 | % | CC and lower | 17 | 0.4 | % | 25 | 0.5 | % | ||||
Non-rated | - | - | % | - | - | % |
Non-rated2
|
- | - | % | - | - | % | ||||
Total below investment grade | 493 | 11.0 | % | 587 | 10.5 | % | Total below investment grade | 948 | 21.1 | % | 880 | 15.8 | % | ||||
CMBS net invested assets | $ | 4,495 | 100.0 | % | $ | 5,580 | 100.0 | % | CMBS net invested assets | $ | 4,495 | 100.0 | % | $ | 5,580 | 100.0 | % |
1 Please refer to the Notes to the Financial Supplement section for discussion on net invested assets and the 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, 2022 | December 31, 2023 | |||||||
Dollars | Percent of Total | Dollars | Percent of Total | |||||
NET RESERVE LIABILITIES | ||||||||
Indexed annuities | $ | 85,163 | 48.4 | % | $ | 84,444 | 42.4 | % |
Fixed rate annuities
|
39,553 | 22.5 | % | 53,282 | 26.7 | % | ||
Total deferred annuities | 124,716 | 70.9 | % | 137,726 | 69.1 | % | ||
Pension group annuities | 20,614 | 11.7 | % | 26,313 | 13.2 | % | ||
Payout annuities
|
7,589 | 4.3 | % | 4,897 | 2.4 | % | ||
Funding agreements1
|
21,538 | 12.2 | % | 26,637 | 13.4 | % | ||
Life and other
|
1,513 | 0.9 | % | 3,716 | 1.9 | % | ||
Total net reserve liabilities | $ | 175,970 | 100.0 | % | $ | 199,289 | 100.0 | % |
Quarterly Trends | Δ | Year-to-Date | Δ | |||||||||||||||||
4Q'22 | 1Q'23 | 2Q'23 | 3Q'23 | 4Q'23 | Q/Q | Y/Y | 2022 | 2023 | Y/Y | |||||||||||
NET RESERVE LIABILITY ROLLFORWARD | ||||||||||||||||||||
Net reserve liabilities - beginning | $ | 173,539 | $ | 175,970 | $ | 184,891 | $ | 193,431 | $ | 185,744 | (4) | % | 7 | % | $ | 168,323 | $ | 175,970 | 5 | % |
Gross inflows2
|
11,511 | 12,111 | 18,989 | 13,257 | 20,167 | 52 | % | 75 | % | 48,703 | 64,524 | 32 | % | |||||||
Acquisition and block reinsurance3
|
- | - | - | - | 2,214 | NM | NM | - | 2,214 | NM | ||||||||||
Inflows attributable to ACRA noncontrolling interests | (1,305) | (60) | (3,751) | (3,192) | (6,025) | 89 | % | NM | (8,753) | (13,028) | 49 | % | ||||||||
Net inflows | 10,206 | 12,051 | 15,238 | 10,065 | 16,356 | 63 | % | 60 | % | 39,950 | 53,710 | 34 | % | |||||||
Net withdrawals
|
(4,925) | (5,531) | (7,891) | (6,827) | (5,791) | (15) | % | 18 | % | (18,862) | (26,040) | 38 | % | |||||||
Strategic reinsurance outflows4
|
(4,862) | - | - | (2,723) | - | NM | NM | (4,862) | (2,723) | (44) | % | |||||||||
ACRA ownership changes5
|
- | - | - | (7,023) | (3,239) | 54 | % | NM | - | (10,262) | NM | |||||||||
Other reserve changes
|
2,012 | 2,401 | 1,193 | (1,179) | 6,219 | NM | 209 | % | (8,579) | 8,634 | NM | |||||||||
Net reserve liabilities - ending
|
$ | 175,970 | $ | 184,891 | $ | 193,431 | $ | 185,744 | $ | 199,289 | 7 | % | 13 | % | $ | 175,970 | $ | 199,289 | 13 | % |
ACRA NONCONTROLLING INTERESTS RESERVE LIABILITY ROLLFORWARD | ||||||||||||||||||||
Reserve liabilities - beginning | $ | 35,463 | $ | 35,981 | $ | 35,281 | $ | 37,775 | $ | 46,576 | 23 | % | 31 | % | $ | 33,537 | $ | 35,981 | 7 | % |
Inflows | 1,305 | 60 | 3,751 | 3,192 | 6,025 | 89 | % | NM | 8,753 | 13,028 | 49 | % | ||||||||
Withdrawals
|
(1,277) | (1,348) | (1,244) | (1,188) | (1,325) | 12 | % | 4 | % | (4,148) | (5,105) | 23 | % | |||||||
ACRA ownership changes5
|
- | - | - | 7,023 | 3,239 | (54) | % | NM | - | 10,262 | NM | |||||||||
Other reserve changes
|
490 | 588 | (13) | (226) | 2,136 | NM | NM | (2,161) | 2,485 | NM | ||||||||||
Reserve liabilities - ending
|
$ | 35,981 | $ | 35,281 | $ | 37,775 | $ | 46,576 | $ | 56,651 | 22 | % | 57 | % | $ | 35,981 | $ | 56,651 | 57 | % |
Note: Please refer to the Notes to the Financial Supplement section for discussion on net reserve liabilities and the Non-GAAP Measure Reconciliations section for the reconciliation of total liabilities to net reserve liabilities. Net reserve liabilities include our economic ownership of ACRA reserve liabilities but do not include the reserve liabilities associated with the noncontrolling interests. 1 Funding agreements are comprised of funding agreements issued under our FABN and FABR programs, funding agreements issued to the FHLB and long-term repurchase agreements. 2 Gross inflows equal inflows from our retail, flow reinsurance and institutional channels as well as inflows for life and products other than deferred annuities or our institutional products, renewal inflows on older blocks of business, annuitizations and foreign currency translation adjustments on large transactions between the transaction date and the translation period. Gross inflows include all inflows sourced by Athene, including all of the inflows reinsured to ACRA. 3 Acquisition and block reinsurance transactions include the reserve liabilities acquired in our inorganic channel at inception. On November 6, 2023, we entered into an agreement with a Japanese counterparty, effective October 1, 2023, pursuant to which we agreed to reinsure a block of whole life insurance policies on a coinsurance basis. In conjunction with the transaction, we entered into an agreement with a leading mortality reinsurer to retrocede the mortality risk related to this block of business. 4 Strategic reinsurance outflows include the cession of certain inforce funding agreements to Catalina in 4Q'22 and the portion of the reinsurance business recaptured by VIAC in 3Q'23. 5 Effective July 1, 2023, ALRe sold 50% of ACRA 2's economic interests to ADIP II, resulting in approximately $6.8 billion of inflows attributable to Athene for the first six months of 2023 being retroactively attributed to ADIP II. The ADIP II reserve liabilities at inception on July 1, 2023 were $7.0 billion. Effective December 31, 2023, ADIP II's ownership of economic interests in ACRA 2 increased to 60%, with ALRe owning the remaining 40% of 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
|
$ | 27,076 | 20.7 | % | $ | 27,076 | 20.7 | % |
0.0% < 2.0%
|
4,791 | 3.7 | % | 2,743 | 2.1 | % | ||
2.0% < 4.0%
|
7,425 | 5.7 | % | 6,690 | 5.1 | % | ||
4.0% < 6.0%
|
13,018 | 9.9 | % | 13,464 | 10.3 | % | ||
6.0% or greater | 78,587 | 60.0 | % | 80,924 | 61.8 | % | ||
$ | 130,897 | 100.0 | % | $ | 130,897 | 100.0 | % | |
Surrender charge (gross) | MVA benefit | Surrender charge (net) | ||||||
Aggregate surrender charge protection
|
5.8 | % | 1.3 | % | 7.1 | % |
Deferred annuities | Percent of total | Average surrender charge (gross) | ||||
YEARS OF SURRENDER CHARGE REMAINING ON DEFERRED ANNUITIES NET ACCOUNT VALUE
|
||||||
No Surrender Charge
|
$ | 27,076 | 20.7 | % | - | % |
Less than 2
|
19,423 | 14.8 | % | 5.7 | % | |
2 to less than 4
|
26,128 | 20.0 | % | 6.5 | % | |
4 to less than 6
|
29,206 | 22.3 | % | 7.1 | % | |
6 to less than 8
|
12,669 | 9.7 | % | 8.9 | % | |
8 to less than 10
|
13,467 | 10.3 | % | 8.7 | % | |
10 or greater
|
2,928 | 2.2 | % | 14.2 | % | |
$ | 130,897 | 100.0 | % |
Notes to the Financial Supplement
|
Notes to the Financial Supplement, continued
|
Notes to the Financial Supplement, continued
|
Non-GAAP Reconciliations
Unaudited (in millions, except percentages)
|
||||||||||
Quarterly Trends | ||||||||||
4Q'22 | 1Q'23 | 2Q'23 | 3Q'23 | 4Q'23 | ||||||
RECONCILIATION OF TOTAL AHL STOCKHOLDERS' EQUITY TO TOTAL ADJUSTED AHL COMMON STOCKHOLDER'S EQUITY | ||||||||||
Total AHL stockholders' equity | $ | 7,158 | $ | 8,698 | $ | 8,701 | $ | 8,537 | $ | 13,967 |
Less: Preferred stock | 3,154 | 3,154 | 3,154 | 3,154 | 3,154 | |||||
Total AHL common stockholder's equity | 4,004 | 5,544 | 5,547 | 5,383 | 10,813 | |||||
Less: Accumulated other comprehensive loss | (7,321) | (6,148) | (6,376) | (8,079) | (5,569) | |||||
Less: Accumulated change in fair value of reinsurance assets | (3,127) | (2,791) | (2,843) | (2,807) | (1,882) | |||||
Less: Accumulated change in fair value of mortgage loan assets | (2,201) | (2,022) | (2,235) | (2,820) | (2,233) | |||||
Total adjusted AHL common stockholder's equity | $ | 16,653 | $ | 16,505 | $ | 17,001 | $ | 19,089 | $ | 20,497 |
RECONCILIATION OF DEBT-TO-CAPITAL RATIO TO ADJUSTED DEBT-TO-CAPITAL RATIO | ||||||||||
Total debt | $ | 3,658 | $ | 3,650 | $ | 3,642 | $ | 3,634 | $ | 4,209 |
Less: Adjustment to arrive at notional debt | 258 | 250 | 242 | 234 | 209 | |||||
Notional debt | $ | 3,400 | $ | 3,400 | $ | 3,400 | $ | 3,400 | $ | 4,000 |
Total debt | $ | 3,658 | $ | 3,650 | $ | 3,642 | $ | 3,634 | $ | 4,209 |
Total AHL stockholders' equity | 7,158 | 8,698 | 8,701 | 8,537 | 13,967 | |||||
Total capitalization | 10,816 | 12,348 | 12,343 | 12,171 | 18,176 | |||||
Less: Accumulated other comprehensive loss | (7,321) | (6,148) | (6,376) | (8,079) | (5,569) | |||||
Less: Accumulated change in fair value of reinsurance assets | (3,127) | (2,791) | (2,843) | (2,807) | (1,882) | |||||
Less: Accumulated change in fair value of mortgage loan assets | (2,201) | (2,022) | (2,235) | (2,820) | (2,233) | |||||
Less: Adjustment to arrive at notional debt | 258 | 250 | 242 | 234 | 209 | |||||
Total adjusted capitalization | $ | 23,207 | $ | 23,059 | $ | 23,555 | $ | 25,643 | $ | 27,651 |
Debt-to-capital ratio | 33.8 | % | 29.6 | % | 29.5 | % | 29.9 | % | 23.2 | % |
Accumulated other comprehensive loss | (10.5) | % | (7.8) | % | (7.9) | % | (9.4) | % | (4.7) | % |
Accumulated change in fair value of reinsurance assets | (4.5) | % | (3.5) | % | (3.5) | % | (3.2) | % | (1.6) | % |
Accumulated change in fair value of mortgage loan assets | (3.2) | % | (2.6) | % | (2.8) | % | (3.3) | % | (1.9) | % |
Adjustment to arrive at notional debt | (0.9) | % | (1.0) | % | (0.9) | % | (0.7) | % | (0.5) | % |
Adjusted debt-to-capital ratio | 14.7 | % | 14.7 | % | 14.4 | % | 13.3 | % | 14.5 | % |
Non-GAAP Reconciliations
Unaudited (in millions, except percentages)
|
||||||||||||||
Quarterly Trends | Year-to-Date | |||||||||||||
4Q'22 | 1Q'23 | 2Q'23 | 3Q'23 | 4Q'23 | 2022 | 2023 | ||||||||
RECONCILIATION OF NET INCOME (LOSS) AVAILABLE TO ATHENE HOLDING LTD. COMMON STOCKHOLDER TO SPREAD RELATED EARNINGS, EXCLUDING NOTABLE ITEMS | ||||||||||||||
Net income (loss) available to Athene Holding Ltd. common stockholder | $ | 361 | $ | 721 | $ | 396 | $ | 442 | $ | 3,054 | $ | (3,051) | $ | 4,613 |
Preferred stock dividends | 36 | 47 | 45 | 44 | 45 | 141 | 181 | |||||||
Net income (loss) attributable to noncontrolling interests | 329 | 455 | 54 | (155) | 733 | (2,106) | 1,087 | |||||||
Net income (loss) | 726 | 1,223 | 495 | 331 | 3,832 | (5,016) | 5,881 | |||||||
Income tax expense (benefit) | 137 | 163 | 133 | 162 | (1,748) | (646) | (1,290) | |||||||
Income (loss) before income taxes | 863 | 1,386 | 628 | 493 | 2,084 | (5,662) | 4,591 | |||||||
Less: Total adjustments to income (loss) before income taxes | 166 | 699 | (171) | (379) | 1,335 | (8,128) | 1,484 | |||||||
Spread related earnings | 697 | 687 | 799 | 872 | 749 | 2,466 | 3,107 | |||||||
Notable items | 35 | (25) | - | (90) | - | 3 | (115) | |||||||
Spread related earnings, excluding notable items | $ | 732 | $ | 662 | $ | 799 | $ | 782 | $ | 749 | $ | 2,469 | $ | 2,992 |
RECONCILIATION OF NET INVESTMENT INCOME TO NET INVESTMENT EARNINGS
|
||||||||||||||
US GAAP net investment income | $ | 2,319 | $ | 2,407 | $ | 2,717 | $ | 2,928 | $ | 3,078 | $ | 7,571 | $ | 11,130 |
Change in fair value of reinsurance assets | 52 | 70 | 37 | (42) | 21 | 333 | 86 | |||||||
VIE earnings and noncontrolling interest | 197 | 200 | 279 | 264 | 335 | 586 | 1,078 | |||||||
Alternative gains (losses) | 41 | (9) | 2 | 1 | 1 | 41 | (5) | |||||||
Reinsurance impacts | (41) | (64) | (69) | (66) | (65) | (41) | (264) | |||||||
Apollo investment (gain) loss | - | - | - | - | - | (33) | - | |||||||
ACRA noncontrolling interests | (446) | (448) | (504) | (676) | (749) | (1,505) | (2,377) | |||||||
Held-for-trading amortization and other | (73) | (13) | 5 | 57 | (89) | (39) | (40) | |||||||
Total adjustments to arrive at net investment earnings
|
(270) | (264) | (250) | (462) | (546) | (658) | (1,522) | |||||||
Total net investment earnings
|
$ | 2,049 | $ | 2,143 | $ | 2,467 | $ | 2,466 | $ | 2,532 | $ | 6,913 | $ | 9,608 |
RECONCILIATION OF NET INVESTMENT INCOME RATE TO NET INVESTMENT EARNED RATE
|
||||||||||||||
US GAAP net investment income | 4.74 | % | 4.78 | % | 5.17 | % | 5.65 | % | 5.79 | % | 4.01 | % | 5.34 | % |
Change in fair value of reinsurance assets | 0.11 | % | 0.14 | % | 0.07 | % | (0.08) | % | 0.04 | % | 0.18 | % | 0.04 | % |
VIE earnings and noncontrolling interest | 0.40 | % | 0.40 | % | 0.53 | % | 0.51 | % | 0.63 | % | 0.31 | % | 0.52 | % |
Alternative gains (losses) | 0.08 | % | (0.02) | % | - | % | - | % | - | % | 0.02 | % | - | % |
Reinsurance impacts | (0.08) | % | (0.13) | % | (0.13) | % | (0.13) | % | (0.12) | % | (0.02) | % | (0.13) | % |
Apollo investment (gain) loss | - | % | - | % | - | % | - | % | - | % | (0.02) | % | - | % |
ACRA noncontrolling interests | (0.91) | % | (0.89) | % | (0.96) | % | (1.30) | % | (1.41) | % | (0.80) | % | (1.14) | % |
Held-for-trading amortization and other | (0.15) | % | (0.03) | % | 0.01 | % | 0.11 | % | (0.17) | % | (0.02) | % | (0.02) | % |
Total adjustments to arrive at net investment earned rate
|
(0.55) | % | (0.53) | % | (0.48) | % | (0.89) | % | (1.03) | % | (0.35) | % | (0.73) | % |
Net investment earned rate | 4.19 | % | 4.25 | % | 4.69 | % | 4.76 | % | 4.76 | % | 3.66 | % | 4.61 | % |
Average net invested assets | $ | 195,804 | $ | 201,600 | $ | 210,209 | $ | 207,312 | $ | 212,761 | $ | 188,742 | $ | 208,479 |
Non-GAAP Reconciliations
Unaudited (in millions, except percentages)
|
||||||||||||||
Quarterly Trends | Year-to-Date | |||||||||||||
4Q'22 | 1Q'23 | 2Q'23 | 3Q'23 | 4Q'23 | 2022 | 2023 | ||||||||
RECONCILIATION OF BENEFITS AND EXPENSES TO COST OF FUNDS | ||||||||||||||
US GAAP benefits and expenses | $ | 2,924 | $ | 2,674 | $ | 12,058 | $ | 943 | $ | 7,928 | $ | 13,285 | $ | 23,603 |
Premiums | (869) | (96) | (9,041) | (26) | (3,586) | (11,638) | (12,749) | |||||||
Product charges | (193) | (198) | (207) | (217) | (226) | (718) | (848) | |||||||
Other revenues | (10) | (13) | (7) | (123) | (7) | 28 | (150) | |||||||
FIA option costs | 342 | 365 | 385 | 374 | 388 | 1,264 | 1,512 | |||||||
Reinsurance impacts | (19) | (37) | (38) | (41) | (39) | 17 | (155) | |||||||
Non-operating change in insurance liabilities and embedded derivatives | (481) | (873) | (1,113) | 969 | (1,913) | 2,825 | (2,930) | |||||||
Policy and other operating expenses, excluding policy acquisition expenses | (309) | (310) | (323) | (335) | (373) | (1,110) | (1,341) | |||||||
AmerUs Closed Block fair value liability | (27) | (42) | 17 | 52 | (85) | 291 | (58) | |||||||
ACRA noncontrolling interests | (258) | (287) | (379) | (311) | (610) | (549) | (1,587) | |||||||
Other | 58 | 52 | 85 | 99 | 117 | 60 | 353 | |||||||
Total adjustments to arrive at cost of funds | (1,766) | (1,439) | (10,621) | 441 | (6,334) | (9,530) | (17,953) | |||||||
Total cost of funds | $ | 1,158 | $ | 1,235 | $ | 1,437 | $ | 1,384 | $ | 1,594 | $ | 3,755 | $ | 5,650 |
RECONCILIATION OF TOTAL BENEFITS AND EXPENSES RATE TO COST OF FUNDS RATE | ||||||||||||||
US GAAP benefits and expenses | 5.97 | % | 5.31 | % | 22.94 | % | 1.83 | % | 14.90 | % | 7.04 | % | 11.32 | % |
Premiums | (1.78) | % | (0.19) | % | (17.20) | % | (0.05) | % | (6.74) | % | (6.17) | % | (6.12) | % |
Product charges | (0.39) | % | (0.39) | % | (0.39) | % | (0.42) | % | (0.42) | % | (0.38) | % | (0.41) | % |
Other revenues | (0.02) | % | (0.03) | % | (0.01) | % | (0.24) | % | (0.01) | % | 0.01 | % | (0.07) | % |
FIA option costs | 0.70 | % | 0.72 | % | 0.73 | % | 0.72 | % | 0.73 | % | 0.67 | % | 0.73 | % |
Reinsurance impacts | (0.04) | % | (0.07) | % | (0.07) | % | (0.08) | % | (0.07) | % | 0.01 | % | (0.07) | % |
Non-operating change in insurance liabilities and embedded derivatives | (0.98) | % | (1.73) | % | (2.12) | % | 1.87 | % | (3.60) | % | 1.50 | % | (1.41) | % |
Policy and other operating expenses, excluding policy acquisition expenses | (0.63) | % | (0.62) | % | (0.61) | % | (0.65) | % | (0.70) | % | (0.59) | % | (0.64) | % |
AmerUs Closed Block fair value liability | (0.05) | % | (0.08) | % | 0.03 | % | 0.10 | % | (0.16) | % | 0.15 | % | (0.03) | % |
ACRA noncontrolling interests | (0.53) | % | (0.57) | % | (0.72) | % | (0.60) | % | (1.15) | % | (0.29) | % | (0.76) | % |
Other | 0.12 | % | 0.10 | % | 0.15 | % | 0.19 | % | 0.22 | % | 0.03 | % | 0.17 | % |
Total adjustments to arrive at cost of funds | (3.60) | % | (2.86) | % | (20.21) | % | 0.84 | % | (11.90) | % | (5.06) | % | (8.61) | % |
Total cost of funds | 2.37 | % | 2.45 | % | 2.73 | % | 2.67 | % | 3.00 | % | 1.98 | % | 2.71 | % |
Average net invested assets | $ | 195,804 | $ | 201,600 | $ | 210,209 | $ | 207,312 | $ | 212,761 | $ | 188,742 | $ | 208,479 |
Non-GAAP Reconciliations
Unaudited (in millions)
|
||||||||||||||
Quarterly Trends | Year-to-Date | |||||||||||||
4Q'22 | 1Q'23 | 2Q'23 | 3Q'23 | 4Q'23 | 2022 | 2023 | ||||||||
RECONCILIATION OF POLICY AND OTHER OPERATING EXPENSES TO OTHER OPERATING EXPENSES | ||||||||||||||
US GAAP policy and other operating expenses | $ | 412 | $ | 435 | $ | 452 | $ | 472 | $ | 489 | $ | 1,495 | $ | 1,848 |
Interest expense | (85) | (115) | (132) | (113) | (99) | (227) | (459) | |||||||
Policy acquisition expenses, net of deferrals | (103) | (125) | (129) | (137) | (116) | (385) | (507) | |||||||
Integration, restructuring and other non-operating expenses | (29) | (29) | (28) | (41) | (32) | (133) | (130) | |||||||
Stock compensation expenses | (16) | (16) | (13) | (13) | (46) | (56) | (88) | |||||||
ACRA noncontrolling interests | (48) | (17) | (31) | (30) | (65) | (231) | (143) | |||||||
Other | (3) | (7) | (1) | (15) | (11) | 3 | (34) | |||||||
Total adjustments to arrive at other operating expenses | (284) | (309) | (334) | (349) | (369) | (1,029) | (1,361) | |||||||
Other operating expenses | $ | 128 | $ | 126 | $ | 118 | $ | 123 | $ | 120 | $ | 466 | $ | 487 |
December 31, 2022 | December 31, 2023 | |||||||||||||
RECONCILIATION OF INVESTMENT FUNDS, INCLUDING RELATED PARTIES AND VIES, TO NET ALTERNATIVE INVESTMENTS | ||||||||||||||
Investment funds, including related parties and VIEs | $ | 14,128 | $ | 17,668 | ||||||||||
Equity securities | 509 | 430 | ||||||||||||
Certain equity securities included in AFS or trading securities | 225 | 201 | ||||||||||||
Investment funds within funds withheld at interest | 1,126 | 827 | ||||||||||||
Royalties | 15 | 14 | ||||||||||||
Net assets of the VIE, excluding investment funds | (2,041) | (4,508) | ||||||||||||
Unrealized (gains) losses | 44 | 26 | ||||||||||||
ACRA noncontrolling interests | (1,836) | (2,829) | ||||||||||||
Other assets | (91) | (170) | ||||||||||||
Total adjustments to arrive at net alternative investments
|
(2,049) | (6,009) | ||||||||||||
Net alternative investments
|
$ | 12,079 | $ | 11,659 |
Non-GAAP Reconciliations
Unaudited (in millions)
|
||||||||||
Quarterly Trends | ||||||||||
4Q'22 | 1Q'23 | 2Q'23 | 3Q'23 | 4Q'23 | ||||||
RECONCILIATION OF TOTAL INVESTMENTS, INCLUDING RELATED PARTIES, TO NET INVESTED ASSETS | ||||||||||
Total investments, including related parties | $ | 196,448 | $ | 203,230 | $ | 215,322 | $ | 214,953 | $ | 238,941 |
Derivative assets | (3,309) | (3,956) | (5,114) | (4,571) | (5,298) | |||||
Cash and cash equivalents (including restricted cash) | 8,407 | 14,992 | 12,804 | 11,214 | 14,781 | |||||
Accrued investment income | 1,328 | 1,458 | 1,646 | 1,792 | 1,933 | |||||
Net receivable (payable) for collateral on derivatives | (1,486) | (1,909) | (2,940) | (2,485) | (2,835) | |||||
Reinsurance impacts | 1,423 | 942 | 1,046 | 882 | (572) | |||||
VIE assets, liabilities and noncontrolling interests | 12,747 | 12,799 | 13,693 | 14,340 | 14,818 | |||||
Unrealized (gains) losses | 22,284 | 19,782 | 20,676 | 25,078 | 16,445 | |||||
Ceded policy loans | (179) | (175) | (174) | (174) | (174) | |||||
Net investment receivables (payables) | 186 | 39 | (217) | (375) | 11 | |||||
Allowance for credit losses | 471 | 521 | 536 | 592 | 608 | |||||
Other investments | (10) | (50) | (43) | (37) | (41) | |||||
Total adjustments to arrive at gross invested assets
|
41,862 | 44,443 | 41,913 | 46,256 | 39,676 | |||||
Gross invested assets
|
238,310 | 247,673 | 257,235 | 261,209 | 278,617 | |||||
ACRA noncontrolling interests | (41,859) | (40,924) | (43,565) | (53,114) | (61,190) | |||||
Net invested assets
|
$ | 196,451 | $ | 206,749 | $ | 213,670 | $ | 208,095 | $ | 217,427 |
RECONCILIATION OF TOTAL LIABILITIES TO NET RESERVE LIABILITIES
|
||||||||||
Total liabilities | $ | 233,382 | $ | 244,604 | $ | 256,203 | $ | 255,734 | $ | 279,344 |
Debt | (3,658) | (3,650) | (3,642) | (3,634) | (4,209) | |||||
Derivative liabilities | (1,646) | (1,518) | (1,753) | (1,892) | (1,995) | |||||
Payables for collateral on derivatives and securities to repurchase | (3,841) | (7,331) | (6,979) | (4,786) | (4,370) | |||||
Other liabilities | (1,635) | (1,381) | (1,712) | (2,324) | (2,590) | |||||
Liabilities of consolidated VIEs | (815) | (847) | (1,189) | (1,255) | (1,115) | |||||
Reinsurance impacts | (9,176) | (9,090) | (9,115) | (8,918) | (8,574) | |||||
Policy loans ceded | (179) | (175) | (174) | (174) | (174) | |||||
Market risk benefit asset | (481) | (440) | (433) | (431) | (377) | |||||
ACRA noncontrolling interests | (35,981) | (35,281) | (37,775) | (46,576) | (56,651) | |||||
Total adjustments to arrive at net reserve liabilities
|
(57,412) | (59,713) | (62,772) | (69,990) | (80,055) | |||||
Net reserve liabilities
|
$ | 175,970 | $ | 184,891 | $ | 193,431 | $ | 185,744 | $ | 199,289 |