ATHENE HOLDING LTD – 10-K – Management's Discussion and Analysis of Financial Condition and Results of Operations

Index to Management's Discussion and Analysis of Financial Condition and Results
                                 of Operations

              Overview                                              69

              Industry Trends and Competition                       71

              Key Operating and Non-GAAP Measures                   76

              Results of Operations                                 79

              Investment Portfolio                                  85

              Non-GAAP Measure Reconciliations                     104

              Liquidity and Capital Resources                      108

              Critical Accounting Estimates and Judgments          115




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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with Forward-Looking Statements, Item
1A. Risk Factors and Item 8. Financial Statements and Supplementary Data
included within this report.

Overview

We are a leading financial services company that specializes in issuing,
reinsuring and acquiring retirement savings products designed for the increasing
number of individuals and institutions seeking to fund retirement needs. We
focus on generating spread income by combining our two core competencies of (1)
sourcing long-term, persistent liabilities and (2) using the global scale and
reach of Apollo's asset management business to actively source or originate
assets with our preferred risk and return characteristics. Our steady and
significant base of earnings generates capital that we opportunistically invest
across our business to source attractively priced liabilities and capitalize on
opportunities. Effective January 1, 2022, as a result of the closing of the
merger involving us and Apollo, Apollo Global Management, Inc. (NYSE: APO)
became the beneficial owner of 100% of our Class A common shares and controls
all of the voting power to elect members to our board of directors.

We have established a significant base of earnings and, as of December 31, 2022,
have an expected annual net investment spread, which measures our investment
performance plus strategic capital management fees less the total cost of our
liabilities, of 1-2% over the 8.6 year weighted-average life of our net reserve
liabilities. The weighted-average life includes deferred annuities, pension
group annuities, funding agreements, payout annuities and other products.

Our total assets have grown to $246.0 billion as of December 31, 2022. For the
year ended December 31, 2022, we generated a net investment spread of 1.63%.

The following table presents the inflows generated from our organic and
inorganic channels:

                                                         Successor                            Predecessor
                                                         Year Ended                Year Ended            Year Ended
                                                        December 31,              December 31,          December 31,
(In millions)                                               2022                      2021                  2020
Retail                                                  $  20,407                $      8,781          $      7,801
Flow reinsurance                                            6,186                       2,564                 6,002
Funding agreements1                                        10,039                      11,852                 8,277
Pension group annuities                                    11,218                      13,837                 5,467
Gross organic inflows                                      47,850                      37,034                27,547
Gross inorganic inflows                                         -                           -                28,792
Total gross inflows                                        47,850                      37,034                56,339
Gross outflows2                                           (27,872)                    (17,534)              (13,656)
Net flows                                               $  19,978                $     19,500          $     42,683

Inflows attributable to Athene                          $  39,244                $     26,795          $     36,891
Inflows attributable to ACRA noncontrolling interest        8,606                      10,239                19,448
Total gross inflows                                     $  47,850           

$ 37,034 $ 56,339

Outflows attributable to Athene                         $ (23,724)               $    (14,761)         $    (11,949)
Outflows attributable to ACRA noncontrolling interest      (4,148)                     (2,773)               (1,707)
Total gross outflows2                                   $ (27,872)          

$ (17,534) $ (13,656)

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 outflows consist of full and partial policyholder
withdrawals on deferred annuities, death benefits, pension group annuity benefit payments, payments on payout
annuities and funding agreement repurchases and maturities. Gross outflows in 2022 include a $4.9 billion strategic
reinsurance transaction with Catalina Holdings.



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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Our organic channels, including retail, flow reinsurance and institutional
products, provided gross inflows of $47.9 billion, $37.0 billion and $27.5
billion for the years ended December 31, 2022, 2021 and 2020, respectively,
which were underwritten to attractive, above target returns. Gross organic
inflows for the year ended December 31, 2022 increased $10.8 billion, or 29%,
reflecting the strength of our multi-channel distribution platform and our
ability to quickly pivot into optimal and profitable channels as opportunities
arise. Withdrawals on our deferred annuities, repurchases and maturities of our
funding agreements, payments on payout annuities, pension group annuity payments
and ceded reinsurance (collectively, gross outflows), in the aggregate were
$27.9 billion, $17.5 billion and $13.7 billion for the years ended December 31,
2022, 2021 and 2020, respectively. The increase in gross outflows was primarily
driven by a $4.9 billion strategic reinsurance transaction with Catalina
Holdings as well as the repurchases and increased maturities of historical
funding agreement issuances. Our funding agreement repurchases of $704 million
included our first ever targeted tender offer for two series of FABNs included
in our FABN program as well as open market repurchases of FABNs. We believe that
our credit profile, current product offerings and product design capabilities as
well as our growing reputation as both a seasoned funding agreement issuer and a
reliable pension group annuity counterparty will continue to enable us to grow
our existing organic channels and allow us to source additional volumes of
profitably underwritten liabilities in various market environments. We intend to
continue to grow organically by expanding each of our retail, flow reinsurance
and institutional distribution channels. We believe that we have the right
people, infrastructure, scale and capital discipline to position us for
continued growth.

Within our retail channel, we had fixed annuity sales of $20.4 billion, $8.8
billion and $7.8 billion for the years ended December 31, 2022, 2021 and 2020,
respectively. The increase in our retail channel was driven by the strong
performance of our indexed annuity and MYGA products across our bank, IMO and
broker-dealer channels, exhibiting strong sales execution as interest rates rose
in the current year, as well as our expansion into large financial institutions.
We have maintained our disciplined approach to pricing and our targeted
underwritten returns. We aim to continue to grow our retail channel by deepening
our relationships with our approximately 54 IMOs, approximately 78,000
independent agents and our growing network of 16 banks and 127 regional
broker-dealers. Our strong financial position and diverse, capital-efficient
products allow us to be dependable partners with IMOs, banks and broker-dealers
as well as consistently write new business. We expect our retail channel to
continue to benefit from our credit profile, recent product launches and the
interest rate environment. We believe this should support growth in sales at our
targeted returns through increased volumes via existing IMO relationships and
allow us to continue to expand our bank and broker-dealer channels.
Additionally, we continue to focus on hiring and training a specialized sales
force and creating products to capture new potential distribution opportunities.

Within our flow reinsurance channel, we target reinsurance business consistent
with our preferred liability characteristics, which provides us another
opportunistic channel for us to source liabilities with attractive crediting
rates. We generated inflows through our flow reinsurance channel of $6.2
billion, $2.6 billion and $6.0 billion for the years ended December 31, 2022,
2021 and 2020, respectively. The increase in our flow reinsurance channel from
prior year was driven by strong volumes from existing partnerships as interest
rates have risen in the current year as well as new partners added during 2022
and the second half of 2021. We expect that our credit profile and our
reputation as a solutions provider will help us continue to source additional
reinsurance partners, which will further diversify our flow reinsurance channel.

Within our institutional channel, we generated inflows of $21.3 billion, $25.7
billion and $13.7 billion for the years ended December 31, 2022, 2021 and 2020,
respectively. The decrease in our institutional channel was driven by lower
pension group annuity and funding agreement inflows. During the year ended
December 31, 2022, we closed 10 pension group annuity transactions. We issued
group annuity contracts in the aggregate principal amount of $11.2 billion,
$13.8 billion and $5.5 billion for the years ended December 31, 2022, 2021 and
2020, respectively. Since entering the pension group annuity market in 2017, we
have closed 43 deals resulting in the issuance or reinsurance of group annuities
of $41.4 billion with more than 435,000 plan participants as of December 31,
2022. We issued funding agreements in the aggregate principal amount of $10.0
billion, $11.9 billion and $8.3 billion for the years ended December 31, 2022,
2021 and 2020, respectively, including issuances in multiple currencies. The
decrease in our funding agreement channel from prior year was driven by fewer
issuances through our FABN program due to challenging market conditions for most
of the year.

The following represents the aggregate principal amount of funding agreement
inflows:

                                                          Successor                             Predecessor
                                                                                      Year Ended           Year Ended
                                                         Year Ended                  December 31,         December 31,
(In millions)                                         December 31, 2022                  2021                 2020
FABN                                                  $        4,325                $    11,102          $     5,804
FHLB                                                           1,445                        750                  875
FABR                                                           2,000                          -                1,000
Long-term repurchase agreements                                2,269                          -                  598
Total funding agreement inflows                       $       10,039        

$ 11,852 $ 8,277

As of December 31, 2022, we had funding agreements of $21.0 billion and $3.0
billion outstanding under our FABN and FABR programs, respectively, $3.7 billion
outstanding with the FHLB and $2.9 billion of long-term repurchase agreements.
We expect to grow our institutional channel by continuing to engage in pension
group annuity transactions and programmatic issuances of funding agreements.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Our inorganic channel has contributed significantly to our growth through both
acquisitions and block reinsurance transactions. We believe our corporate
development team, with support from Apollo, has an industry-leading ability to
source, underwrite and expeditiously close transactions. With support from
Apollo, we are a solutions provider with a proven track record of closing
transactions, which we believe makes us the ideal partner to insurance companies
seeking to restructure their business. We expect that our inorganic channel will
continue to be an important source of profitable growth in the future.

Executing our growth strategy requires that we have sufficient capital available
to deploy. We believe that we have significant capital available to support our
growth aspirations. As of December 31, 2022, we estimate that we have
approximately $5.2 billion in capital available to deploy, consisting of
approximately $2.3 billion in excess equity capital, $2.7 billion in untapped
debt capacity (assuming a peer average adjusted debt to capitalization ratio of
25%) and $0.2 billion in available undrawn capital at ACRA, subject, in the case
of debt capacity, to market conditions and general availability.

To support our growth strategies and capital deployment opportunities, we
established ACRA as a long-duration, on-demand capital vehicle. We own 36.55% of
the economic interests in ACRA, with the remaining 63.45% of the economic
interests being owned by ADIP, a series of funds managed by an affiliate of
Apollo. ACRA participates in certain transactions by drawing a portion of the
required capital for such transactions from third-party investors equal to
ADIP's proportionate economic interest in ACRA. This shareholder-friendly,
strategic capital solution allows us the flexibility to simultaneously deploy
capital across multiple accretive avenues, while maintaining a strong financial
position.

Apollo Aligned Alternatives, L.P. Investment

In 2022, we contributed $8.0 billion of certain of our alternative investments
to AAA in exchange for limited partnership interests in AAA, which is
consolidated as a VIE. Apollo established AAA for the purpose of providing a
single vehicle through which we and third-party investors can participate in a
portfolio of alternative investments. Additionally, we believe AAA enhances
Apollo's ability to increase alternative assets under management (AUM) by
raising capital from third parties, which will allow Athene to achieve greater
scale and diversification for alternatives. Third-party investors began to
invest in AAA on July 1, 2022.

Merger with Apollo

On January 1, 2022, we completed our merger with AGM and are now a direct wholly
owned subsidiary of AGM. The total consideration for the transaction was $13.1
billion. The consideration was calculated based on historical AGM's December 31,
2021 closing share price multiplied by the AGM common shares issued in the share
exchange, as well as the fair value of stock-based compensation awards replaced,
fair value of warrants converted to AGM common shares and other equity
consideration, and effective settlement of pre-existing relationships and other
consideration.

At the closing of the merger with AGM, each issued and outstanding AHL Class A
common share (other than shares held by Apollo, the AOG or the respective direct
or indirect wholly owned subsidiaries of Athene or the AOG) was converted
automatically into 1.149 shares of AGM common shares with cash paid in lieu of
any fractional AGM common shares. In connection with the merger, AGM issued to
AHL Class A common shareholders 158.2 million AGM common shares in exchange for
137.6 million AHL Class A common shares that were issued and outstanding as of
the acquisition date, exclusive of the 54.6 million shares previously held by
Apollo immediately before the acquisition date.

Strategic Transaction with Apollo

On February 28, 2020, we closed a strategic transaction with Apollo in which
Apollo acquired an incremental stake in us for AOG units valued at $1.1 billion,
upon close, and $350 million of cash. Changes in the value of the AOG units are
reflected within the investment gains (losses), net of offsets non-operating
line item. Subsequent to our merger with AGM described in Note 2 - Business
Combination, our investment in Apollo was distributed to AGM in the first
quarter of 2022. See Note 14 - Related Parties - Other Related Party
Transactions - Apollo Share Exchange and Related Transactions to the
consolidated financial statements for further discussion.

Industry Trends and Competition

Economic and Market Conditions

As a leading financial services company specializing in retirement services, we
are affected by numerous factors, including the condition of global financial
markets and the economy. Price fluctuations within equity, credit, commodity and
foreign exchange markets, as well as interest rates and global inflation, which
may be volatile and mixed across geographies, can significantly impact the
performance of our business including, but not limited to, the valuation of
investments and related income we may recognize.

Adverse economic conditions may result from domestic and global economic and
political developments, including plateauing or decreasing economic growth and
business activity, civil unrest, geopolitical tensions or military action, such
as the armed conflict between Ukraine and Russia and corresponding sanctions
imposed by the United States and other countries, and new or evolving legal and
regulatory requirements on business investment, hiring, migration, labor supply
and global supply chains.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

We carefully monitor economic and market conditions that could potentially give
rise to global market volatility and affect our business operations, investment
portfolios and derivatives, which includes global inflation.

US inflation remained heightened during the fourth quarter of 2022 with the US
Federal Reserve continuing its interest rate hiking cycle as a result. The US
Bureau of Labor Statistics reported that the annual US inflation rate edged down
to 6.5% as of December 31, 2022, compared to 8.2% as of September 30, 2022, as
action from the US Federal Reserve is beginning to temper inflation. While
beginning to decline, the heightened US inflation rate remains persistent due to
a combination of supply and demand factors. As a result, in December 2022, the
Federal Reserve raised the benchmark interest rate to a target range of 4.25% to
4.50%, up from a target range of 3.00% to 3.25% in September 2022, which marks
the seventh consecutive interest rate hike in 2022.

In the US, the S&P 500 Index decreased 19.4% in 2022 and credit markets faced
similar underperformance. The Bureau of Economic Analysis reported US real GDP
increased at an annual rate of 2.1% in 2022. As of January 2023, the
International Monetary Fund estimated that the US economy will expand by 1.4% in
2023 and 1.0% in 2024. The US Bureau of Labor Statistics reported that the US
unemployment rate remained at 3.5% as of December 31, 2022.

Foreign exchange rates can impact the valuations of our investments and
liabilities that are denominated in currencies other than the US dollar. The US
dollar weakened in the fourth quarter compared to the Euro as global central
banks worked to combat the increasing yield disparity. Relative to the US
dollar, the euro appreciated 9.2% during the fourth quarter of 2022, after
depreciating 6.5% in the third quarter of 2022. We generally undertake hedging
activities to eliminate or mitigate foreign exchange currency risk. Oil prices
also moderated, ending the year up 6.7%, amid a volatile year which included
recession fears that counteracted constrained supply and oil export disruptions
driven by the ongoing conflict between Ukraine and Russia.

Interest Rate Environment

Rates moved meaningfully higher than most predictions in 2022, and this trend
continued in the fourth quarter with the US 10-year Treasury yield reaching
levels as high as 4.25% during the quarter before ending the year at 3.88%.
Given the Federal Reserve's continued focus on curbing inflation and
recessionary concerns, it is difficult to predict the level of interest rates
and the shape of the yield curve.

Our investment portfolio consists predominantly of fixed maturity investments.
See -Investment Portfolio. If prevailing interest rates were to rise, we believe
the yield on our new investment purchases may also rise and our investment
income from floating rate investments would increase, while the value of our
existing investments may decline. If prevailing interest rates were to decline
significantly, the yield on our new investment purchases may decline and our
investment income from floating rate investments would decrease, while the value
of our existing investments may increase.

We address interest rate risk through managing the duration of the liabilities
we source with assets we acquire through ALM modeling. As part of our investment
strategy, we purchase floating rate investments, which we expect would perform
well in a rising interest rate environment, as experienced in the current year,
and which we expect would underperform in a declining rate environment. As of
December 31, 2022, our net invested asset portfolio included $39.3 billion of
floating rate investments, or 20% of our net invested assets and our net reserve
liabilities included $14.2 billion of floating rate liabilities at notional, or
7% of our net invested assets, resulting in $25.1 billion of net floating rate
assets, or 13% of our net invested assets.

If prevailing interest rates were to rise, we believe our products would be more
attractive to consumers and our sales would likely increase. If prevailing
interest rates were to decline, it is likely that our products would be less
attractive to consumers and our sales would likely decrease. In periods of
prolonged low interest rates, the net investment spread may be negatively
impacted by reduced investment income to the extent that we are unable to
adequately reduce policyholder crediting rates due to policyholder guarantees in
the form of minimum crediting rates or otherwise due to market conditions. As of
December 31, 2022, most of our products were deferred annuities with 19% of our
FIAs at the minimum guarantees and 27% of our fixed rate annuities at the
minimum crediting rates. As of December 31, 2022, minimum guarantees on all of
our deferred annuities, including those with crediting rates already at their
minimum guarantees, were, on average, greater than 150 basis points below the
crediting rates on such deferred annuities, allowing us room to reduce rates
before reaching the minimum guarantees. Our remaining liabilities are associated
with immediate annuities, pension group annuity obligations, funding agreements
and life contracts for which we have little to no discretionary ability to
change the rates of interest payable to the respective policyholder or
institution. A significant majority of our deferred annuity products have
crediting rates that we may reset annually upon renewal following the expiration
of the current guaranteed period. While we have the contractual ability to lower
these crediting rates to the guaranteed minimum levels, our willingness to do so
may be limited by competitive pressures.

See Item 7A. Quantitative and Qualitative Disclosures About Market Risks, which
includes a discussion regarding interest rate and other significant risks and
our strategies for managing these risks.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Discontinuation of certain IBORs (including LIBOR)

On December 31, 2021, most LIBOR settings (i.e., 24 out of 35, including 1-week
and 2-month US Dollar (USD) LIBOR as well as all other non-USD LIBOR settings)
ceased to be published. In addition, a few of the most widely used GBP and JPY
LIBOR settings (i.e., 1-, 3- and 6- month GBP and JPY LIBOR settings) were
deemed permanently unrepresentative, but will continue to be published on a
synthetic basis, for a limited time period for the purpose of all legacy
contracts (except for cleared derivatives). The remaining USD LIBOR settings
(i.e., 1-, 3-, 6- and 12-month USD LIBOR settings) will continue to be
published, subject to limitations on use, and cease or become unrepresentative
on June 30, 2023. Without the intervention of the UK Financial Conduct Authority
(FCA) using enhanced powers provided by the UK Government to compel continued
panel bank contribution by the IBA, the LIBOR administrator, LIBOR will cease
publication after June 30, 2023. In November 2022, the FCA published a
consultation seeking market input on its proposal to compel the IBA to continue
to publish USD LIBOR on a synthetic basis until September 30, 2024. The response
period for this consultation is now closed and the next step is for the FCA to
publish its findings and recommendations. Similar developments have occurred
with respect to other IBORs.

As a result of the expected discontinuation of certain IBORs, including LIBOR,
regulators and market participants in various jurisdictions have been working to
identify alternative reference rates that are compliant with the International
Organization of Securities Commission's standards for transaction-based
benchmarks. In the US, the Alternative Reference Rates Committee (ARRC), a group
of market and official sector participants, identified the Secured Overnight
Financing Rate (SOFR) as its recommended alternative benchmark rate. Other
alternative reference rates have been recommended in other jurisdictions (e.g.,
in the United Kingdom, the alternative benchmark rate for GBP LIBOR is the
Sterling Overnight Interbank Average Rate).

The discontinuation of IBORs could have a significant impact on the financial
markets and represents a material uncertainty to our business. In particular, to
manage the uncertainty surrounding the discontinuation of LIBOR, we have
established a LIBOR transition team and a transition plan. We have created an
Executive Steering Committee composed of senior executives to coordinate and
oversee the execution of our plan.

It is difficult to predict the full impact of the transition away from LIBOR on
our contracts whose value is tied to LIBOR. The value or profitability of these
contracts may be adversely affected.

As of December 31, 2022, we had contracts tied to LIBOR in the notional amounts
set forth in the table below:

                                                                                     Extending Beyond
(In millions)                                                Total Exposure           June 30, 2023
Investments                                                $        30,366          $        28,846
Product liabilities                                                 11,370                    8,318
Derivatives hedging product liabilities                             15,927                   10,853
Other derivatives                                                    3,552                    3,549
Other contracts                                                      1,113                    1,113
Total notional of contracts tied to LIBOR                  $        62,328          $        52,679



Investments

As of December 31, 2022, our investments tied to LIBOR were in the following
asset classes:

(In millions)                        Total Exposure       Extending Beyond June 30, 2023
Multi-lateral arrangements
Corporates                          $           644      $                           608
RMBS                                          2,710                                2,684
CMBS                                            704                                  688
CLO                                          15,219                               15,212
ABS                                           5,357                                5,043
Bank Loans                                    1,129                                1,068
Total multi-lateral arrangements             25,763                               25,303
Bi-lateral arrangements
CML                                           4,486                                3,426
RML                                             117                                  117
Total bi-lateral arrangements                 4,603                                3,543
Total investments tied to LIBOR     $        30,366      $                        28,846



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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Of the total notional value of investment-related contracts tied to LIBOR,
extending beyond June 30, 2023, $25.3 billion or 87.7% relate to multi-lateral
arrangements. These arrangements are typically characterized by a large, diverse
set of unrelated holders, the majority or all of whom must consent to amendments
to the terms of the underlying investment instrument. Generally, when the
amendments concern a material term such as the determination of interest,
consent must be unanimous. Given the collective action issues inherent in such
structures, such consent is typically impracticable and beyond our control. The
existence and character of fallback provisions affected by the discontinuation
of LIBOR vary widely from contract to contract. Many of our legacy contracts may
not contemplate the permanent discontinuation of LIBOR and upon LIBOR's
discontinuation may result in the conversion of the instrument from a floating-
to a fixed-rate instrument or may involve a significant degree of uncertainty as
to the method of determining interest. To the extent that such legacy
arrangements do not contemplate the permanent discontinuation of LIBOR, we would
most likely look to some broad-based solution, such as the US federal LIBOR
transition law and related rule(s) issued by the Board of Governors of the
Federal Reserve System, or, if applicable, the New York LIBOR transition law, to
address such deficiency. To the extent that such a solution is ineffective, for
example as a result of being ruled unconstitutional we would likely be required
to undertake a re-evaluation of affected investments, which might result in the
disposition of individual positions and a realized loss in value due to any such
deficiency or other market factors. To the extent that individual positions are
retained, we may incur adverse financial consequences, including any
mark-to-market impacts resulting from those investments that convert from a
floating to a fixed rate. To the extent that the fallback rates ultimately used
to determine interest payable on structured securities do not align with the
fallback rates used to determine interest payable on the underlying assets,
economic losses could be sustained on the overall structure.

The remaining notional value of investment-related contracts tied to LIBOR
extending beyond June 30, 2023 of $3.5 billion or 12.3%, relates to bi-lateral
arrangements that are capable of being amended through negotiation with the
relevant counterparty.

As our investment manager, Apollo maintains the documentation associated with
the assets in our investment portfolio. We are therefore dependent upon Apollo
for the successful completion of our LIBOR transition efforts relating to our
investment portfolio. See Part I-Item 1A. Risk Factors-Risks Relating to Our
Business Operations-Changes to the method of determining the LIBOR or the
selection of a replacement for LIBOR may affect the value of investments held by
or due to us and could affect our results of operations and financial results.
Apollo's failure to fulfill its responsibilities could have an adverse impact on
our results of operations and ability to timely report accurate financial
information.

Product Liabilities and Associated Hedging Instruments

As of December 31, 2022, we had product liabilities with a notional value of
approximately $11.4 billion for which LIBOR is a component in the determination
of interest credited, of which we expect $8.3 billion to have a current
crediting term that extends beyond June 30, 2023. For purposes of evaluating our
exposure to LIBOR, we only consider our exposure to the current crediting term,
which is typically one to two years. Upon renewal of the crediting term, we have
the ability to migrate policyholders into new strategies not involving LIBOR.
Generally, there are two categories of indices that use LIBOR in the
determination of interest credited, "excess return" indices (return of index in
excess of LIBOR) and indices that use LIBOR as a means to control volatility.
The indices to which these products are tied are primarily proprietary indices
for which key inputs are determined by the index sponsor. The index sponsor
generally has the right to unilaterally change the reference rate upon the
discontinuation of LIBOR. As a result, we do not anticipate any administrative
concerns in connection with the transition from LIBOR to a replacement rate with
respect to these products.

As of December 31, 2022, we held derivatives with a notional value of
approximately $15.9 billion to hedge our exposure to these product liabilities,
of which we expect $10.9 billion to extend beyond June 30, 2023. Included within
this category are $4.8 billion of Eurodollar futures, of which we expect $2.7
billion to extend beyond June 30, 2023. Exchange traded products, such as
Eurodollar futures, will follow the CME Group Inc.'s approach regarding the
discontinuation of LIBOR, which may be different than the approach taken with
respect to the product liability by the relevant index sponsor, and expose us to
potential basis mismatch. The remaining derivatives in this category are
primarily purchased to hedge the current crediting period. We will be required
to purchase new derivatives in future periods to hedge future crediting periods
associated with the related existing product liabilities, which will expose us
to potential basis mismatch to the extent that the reference rate for the
product liability is not the same as the reference rate for the derivative
instrument. These derivatives are entered into pursuant to ISDA Master
Agreements and will transition to SOFR in accordance with the process described
below under the caption Other Derivatives.

Other Derivatives

Our other derivative contracts tied to LIBOR are generally entered into pursuant
to ISDA Master Agreements. ISDA published the ISDA 2020 IBOR Fallbacks Protocol
(Protocol) and released Supplement 70 to the 2006 ISDA Definitions (Supplement)
on October 23, 2020. The Protocol and Supplement include appropriate fallbacks
that contemplate the permanent discontinuation of LIBOR and certain other IBORs.
In January 2021, we joined industry peers by adhering to the Protocol and terms
of the Supplement, each of which became effective on January 25, 2021. With
respect to future transactions, we anticipate adoption of the 2021 ISDA Interest
Rate Definitions, which also include appropriate fallbacks that contemplate the
permanent discontinuation of LIBOR and certain other IBORs. To the extent that
the fallbacks incorporated into our other derivative contracts result in the use
of a replacement rate that differs from that employed in the contract being
hedged, we may experience basis mismatch. In connection with the publication of
the Protocol, ISDA also published templates for possible bilateral amendments to
legacy contracts (including derivatives contracts) for situations in which the
parties elect not to utilize the fallbacks contemplated by the Protocol and
instead negotiate their own fallback provisions to avoid potential basis risk.
We intend to evaluate whether and the extent to which we are subject to such
basis risk, as well as the possibility of using the available bilateral
templates to mitigate such risk.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Other Contracts and Other Sources of Exposure

The "Other Contracts" category is comprised of our LIBOR-based floating rate
funding agreement, fixed-to-float Series A preference shares, and our revolving
credit agreement, if any amounts were to be outstanding all of which contemplate
the permanent discontinuation of LIBOR. These agreements are tied to LIBOR in a
manner that is not expected to have a significant impact upon LIBOR's
discontinuation or have fallback provisions in place that provide for the
determination of interest after the discontinuation of LIBOR. In addition to the
other contracts for which we have quantified our exposure, we are party to
contracts that are tied to LIBOR based upon the occurrence of some remote
contingency, such as the accrual of penalty interest, or for which LIBOR is
otherwise not a material term of the contract. These contracts do not lend
themselves to quantification and are lower in priority in our LIBOR remediation
efforts. Finally, LIBOR is used as a component in our internal derivative
valuation models. We are in the process of transitioning the benchmark yield
curve in such models from LIBOR to SOFR and we expect to complete the transition
prior to the discontinuation of LIBOR. Such transition may affect the valuation
of our derivative instruments.

We can provide no assurance that we will be successful at fully implementing our
plan prior to the discontinuation of LIBOR. Completion of certain components of
our plan are contingent upon market developments and are therefore not fully
within our control. To the extent management effort and attention is focused on
other matters, the timely completion of our plan could become more difficult.
Failure to fully implement our plan prior to the discontinuation of LIBOR may
have a material adverse effect on our business, financial position, results of
operations and cash flows and on our ability to timely report accurate financial
information.

Demographics

Over the next four decades, the retirement-age population is expected to
experience unprecedented growth. Technological advances and improvements in
healthcare are projected to continue to contribute to increasing average life
expectancy, and aging individuals must be prepared to fund retirement periods
that will last longer than ever before. Further, many working households in the
United States do not have adequate retirement savings. As a tool for addressing
the unmet need for retirement planning, we believe that many Americans have
begun to look to tax-efficient savings products with low-risk or guaranteed
return features and potential equity market upside. Our tax-efficient savings
products are well positioned to meet this increasing customer demand.

Competition

We operate in highly competitive markets. We face a variety of large and small
industry participants, including diversified financial institutions, insurance
and reinsurance companies and private equity firms. These companies compete in
one form or another for the growing pool of retirement assets driven by a number
of external factors such as the continued aging of the population and the
reduction in safety nets provided by governments and private employers. In the
markets in which we operate, scale and the ability to provide value-added
services and build long-term relationships are important factors to compete
effectively. We believe that our leading presence in the retirement market,
diverse range of capabilities and broad distribution network uniquely position
us to effectively serve consumers' increasing demand for retirement solutions,
particularly in the FIA market.

According to LIMRA, total fixed annuity market sales in the United States were
$143.3 billion for the nine months ended September 30, 2022, a 45.6% increase
from the same time period in 2021, as a rise in interest rates spurred continued
growth in the US annuity market. In the total fixed annuity market, for the nine
months ended September 30, 2022 (the most recent period for which specific
market share data is available), we were the largest company based on sales of
$12.3 billion, translating to an 8.6% market share. For the nine months ended
September 30, 2021, our market share was 5.7% with sales of $5.6 billion.

According to LIMRA, total fixed annuity sales in the United States were $129.3
billion for the year ended December 31, 2021, a 7.4% increase from the year
ended December 31, 2020. In the total fixed annuity market, for the year ended
December 31, 2021, we were the fourth largest company based on sales of $8.3
billion, translating to a 6.4% market share. For the year ended December 31,
2020, our market share was 6.4% with sales of $7.7 billion.

According to LIMRA, total FIA sales in the United States were $57.5 billion for
the nine months ended September 30, 2022, a 22.1% increase from the same time
period in 2021. In the total FIA Market, for the nine months ended September 30,
2022 (the most recent period for which specific market share data is available),
we were the largest provider of FIAs based on sales of $7.1 billion, and our
market share for the same period was 12.4%. For the nine months ended September
30, 2021, our market share was 11.3% with sales of $5.3 billion.

According to LIMRA, total FIA sales in the United States were $63.7 billion for
the year ended December 31, 2021, a 14.8% increase from the year ended December
31, 2020. In the total FIA market, for the year ended December 31, 2021, we were
the largest provider of FIAs based on sales of $7.7 billion, and our market
share for the same period was 12.1%. For the year ended December 31, 2020, we
were the largest provider of FIAs based on sales of $5.8 billion, translating to
a 10.5% market share.

According to LIMRA, total RILA market sales in the United States were $31.0
billion for the nine months ended September 30, 2022, a 9.6% increase from the
same time period in 2021. For the nine months ended September 30, 2022 (the most
recent period for which specific market share data is available), we were the
twelfth largest provider of RILAs based on sales of $678 million, and our market
share for the same period was 2.2%. For the nine months ended September 30,
2021, we were the ninth largest provider of RILAs based on sales of $354
million, translating to a 1.2% market share. We believe RILAs represent a
significant growth opportunity for Athene.
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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

According to LIMRA, total RILA market sales in the United States were $38.7
billion for the year ended December 31, 2021, a 62.1% increase from the year
ended December 31, 2020. In the total RILA market, for the year ended December
31, 2021, we were the ninth largest provider of RILAs based on sales of $566
million, and our market share for the same period was 1.5%. For the year ended
December 31, 2020, we were the ninth largest provider of RILAs based on sales of
$187 million, translating to a 0.8% market share.

Key Operating and Non-GAAP Measures

In addition to our results presented in accordance with accounting principles
generally accepted in the United States of America (US GAAP), we present certain
financial information that includes non-GAAP measures. Management believes the
use of these non-GAAP measures, together with the relevant US GAAP measures,
provides information that may enhance an investor's understanding of our results
of operations and the underlying profitability drivers of our business. The
majority of these non-GAAP measures are intended to remove from the results of
operations the impact of market volatility (other than with respect to
alternative investments) 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 US GAAP and should not be viewed as a substitute for the
corresponding US GAAP measures. See Non-GAAP Measure Reconciliations for the
appropriate reconciliations to the most directly comparable US GAAP measures.

Spread Related Earnings (SRE)

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

•Investment Gains (Losses), Net of Offsets-Consists of the realized gains and
losses on the sale of AFS securities, the change in fair value of reinsurance
assets, unrealized gains and losses, changes in the credit loss allowance, and
other investment gains and losses. Unrealized, allowances and other investment
gains and losses are comprised of the fair value adjustments of trading
securities (other than CLOs and ABS) and mortgage loans, investments held under
the fair value option and our investment in Apollo, 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.
Investment gains and losses are net of offsets related to DAC and DSI
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.

•Non-operating Change in Insurance Liabilities and Related Derivatives, Net of
Offsets

•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 and DSI 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). On an economic basis, we believe this is
suitable because policyholder accounts are credited with index performance at
the end of each index term. However, because the term of an embedded derivative
in an FIA contract is longer-dated, there is a duration mismatch which may lead
to mismatches for accounting purposes.

•Non-operating Change in Funding Agreements-Consists of timing differences
caused by changes to interest rates on variable funding agreements and funding
agreement backed notes and the associated reserve accretion patterns of those
contracts. Further included are adjustments for gains associated with the
Company's Tender Offer for funding agreement backed notes.

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

•Stock Compensation Expense-Consists of stock compensation expenses associated
with our share incentive plans, including long-term incentive expenses, which
are not related to our underlying profitability drivers and fluctuate from time
to time due to the structure of our plans.
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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

•Income Tax (Expense) Benefit-Consists of the income tax effect of all income
statement adjustments, including our Apollo investment, and is computed by
applying the appropriate jurisdiction's tax rate to all adjustments subject to
income tax.

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

Adjusted Debt to Capital Ratio

Adjusted debt to capital ratio is a non-GAAP measure used to evaluate our
capital structure excluding the impacts of AOCI and the cumulative changes in
fair value of funds withheld and modco reinsurance assets as well as mortgage
loan assets, net of DAC, DSI, rider reserve and tax offsets. Adjusted debt to
capital ratio is calculated as total debt at notional value divided by adjusted
capitalization. Adjusted capitalization includes our adjusted AHL common
shareholder's equity, preferred stock and the notional value of our debt.
Adjusted AHL common shareholder's equity is calculated as the ending AHL
shareholders' equity excluding AOCI, the cumulative changes in fair value of
funds withheld and modco reinsurance assets and mortgage loan assets as well as
preferred stock. These adjustments fluctuate period to period in a manner
inconsistent with our underlying profitability drivers as the majority of such
fluctuation is related to the market volatility of the unrealized gains and
losses associated with our AFS securities. 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.
Adjusted debt to capital ratio should not be used as a substitute for the debt
to capital ratio. However, we believe the adjustments to shareholders' equity
are significant to gaining an understanding of our capitalization, debt
utilization and debt capacity.

Net Investment Spread and Other Operating Expenses

Net investment spread is a key measure of profitability. Net investment spread
measures our investment performance plus our strategic capital management fees,
less our total cost of funds. Net investment earned rate is a key measure of our
investment performance while cost of funds is a key measure of the cost of our
policyholder benefits and liabilities. Strategic capital management fees consist
of management fees received by us for business managed for others, primarily the
non-controlling interest portion of Athene's business ceded to ACRA.

Net investment earned rate is a non-GAAP measure we use to evaluate the
performance of our net invested assets that does not correspond to US 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, for the relevant
period. To enhance the ability to analyze these measures across periods, interim
periods are annualized. The adjustments to net investment income to arrive at
our net investment 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 US GAAP presentation of change in fair value of
reinsurance assets. We exclude the income and assets supporting business that we
have exited through ceded reinsurance including funds withheld agreements. We
believe the adjustments for reinsurance provide a net investment earned rate on
the assets for which we have economic exposure.

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 crediting on deferred
annuities is the interest credited to the policyholders on our fixed strategies
as well as the option costs on the indexed annuity strategies. With respect to
FIAs, the cost of providing index credits includes the expenses incurred to fund
the annual index credits, and where applicable, minimum guaranteed interest
credited. Cost of crediting on institutional products is comprised of (1)
pension group annuity costs, including interest credited, benefit payments and
other reserve changes, net of premiums received when issued, and (2) funding
agreement costs, including the interest payments and other reserve changes.
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, premiums, product charges and other revenues. We exclude
the costs related to business that we have exited through ceded reinsurance
transactions. Cost of funds is computed as the total liability costs divided by
the average net invested assets, for the relevant period. To enhance the ability
to analyze these measures across periods, interim periods are annualized. We
believe a measure like cost of funds is useful in analyzing the trends of our
core business operations and profitability. While we believe cost of funds is a
meaningful financial metric and enhances our understanding of the underlying
profitability drivers of our business, it should not be used as a substitute for
total benefits and expenses presented under US GAAP.

Net investment earned rate, cost of funds, and net investment spread 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 or total benefits and expenses presented
under US GAAP.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

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

Net Invested Assets

In managing our business, we analyze net invested assets, which does not
correspond to total investments, including investments in related parties, as
disclosed in our consolidated financial statements and notes thereto. Net
invested assets represent the investments that directly back our net reserve
liabilities as well as surplus assets. Net invested assets is used in the
computation of net investment earned rate, which allows us to analyze the
profitability of our investment portfolio. Net invested assets includes (a)
total investments on the consolidated balance sheet 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 and VOE assets, liabilities and noncontrolling interest
adjustments, (f) net investment payables and receivables, (g) policy loans ceded
(which offset the direct policy loans in total investments) and (h) an
adjustment for the allowance for credit losses. Net invested assets 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 for prior periods.
Our net invested assets are averaged over the number of quarters in the relevant
period to compute our net investment earned rate for such period. While we
believe net invested assets is a meaningful financial metric and enhances our
understanding of the underlying drivers of our investment portfolio, it should
not be used as a substitute for total investments, including related parties,
presented under US GAAP.

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) interest sensitive contract
liabilities, (b) future policy benefits, (c) long-term repurchase obligations,
(d) dividends payable to policyholders and (e) other policy claims and benefits,
offset by reinsurance recoverable, excluding policy loans ceded. Net reserve
liabilities include our proportionate share of ACRA reserve liabilities, based
on our economic ownership, but do not include the proportionate share of reserve
liabilities associated with the noncontrolling 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, US GAAP requires the ceded liabilities and related reinsurance
recoverables to continue to be recorded in our consolidated financial statements
despite the transfer of economic risk to the counterparty in connection with the
reinsurance transaction. While we believe net reserve liabilities is a
meaningful financial metric and enhances our understanding of the underlying
profitability drivers of our business, it should not be used as a substitute for
total liabilities presented under US GAAP.

Sales

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


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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Results of Operations

We completed our merger with AGM on January 1, 2022 and have elected pushdown
accounting in which we used AGM's basis of accounting that reflects the fair
market value of our assets and liabilities as of the date of the merger. The
resulting change in the value of our assets and liabilities limits the
comparability of our financial results for the Predecessor and Successor
periods.

The following summarizes the consolidated results of operations for the
Predecessor and Successor periods, which relate to the periods preceding and
period succeeding our merger with AGM, respectively.

                                                             Successor                             Predecessor
                                                                                         Year Ended           Year Ended
                                                            Year Ended                  December 31,         December 31,
(In millions)                                            December 31, 2022                  2021                 2020
Revenues                                                 $        7,623                $    26,320          $    14,764
Benefits and expenses                                            14,853                     22,134               12,558
Income (loss) before income taxes                                (7,230)                     4,186                2,206
Income tax expense (benefit)                                       (976)                       386                  285
Net income (loss)                                                (6,254)                     3,800                1,921

Less: Net income (loss) attributable to noncontrolling
interests

                                                        (2,092)                       (59)                 380
Net income (loss) attributable to Athene Holding Ltd.            (4,162)                     3,859                1,541
Less: Preferred stock dividends                                     141                        141                   95

Net income (loss) available to AHL common shareholder $ (4,303)

            $     3,718          $     1,446

Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021

In this section, references to 2022 refer to the year ended December 31, 2022
and references to 2021 refer to the year ended December 31, 2021.

Net Income (Loss) Available to AHL Common Shareholder

Net income (loss) available to AHL common shareholder decreased by $8.0 billion,
or 216%, to $(4.3) billion in 2022 from $3.7 billion in 2021. The decrease in
net income (loss) available to AHL common shareholder was driven by an $18.7
billion decrease in revenues, partially offset by a $7.3 billion decrease in
benefits and expenses, a $2.0 billion decrease in noncontrolling interests and a
$1.4 billion decrease in income tax expense.

Revenues

Revenues decreased by $18.7 billion to $7.6 billion in 2022 from $26.3 billion
in 2021. The decrease was driven by a decrease in investment related gains and
losses and a decrease in premiums, partially offset by an increase in net
investment income and an increase in VIE investment related gains and losses.

Investment related gains (losses) decreased by $16.9 billion to $(12.7) billion
in 2022 from $4.2 billion in 2021, primarily due to the changes in fair value of
reinsurance assets, FIA hedging derivatives, mortgage loans, trading and equity
securities, realized losses on AFS securities compared to realized gains in the
prior year and an increase in the provision for credit losses, partially offset
by foreign exchange derivative gains. The change in fair value of reinsurance
assets decreased $7.1 billion primarily driven by the change in the value of the
underlying assets, mainly related to credit spread widening compared to credit
spread tightening in the prior year and a larger increase in US Treasury rates
in the current year. The change in fair value of FIA hedging derivatives
decreased $5.3 billion primarily driven by the unfavorable performance of the
indices upon which our call options are based. The largest percentage of our
call options are based on the S&P 500 index, which decreased 19.4% in 2022,
compared to an increase of 26.9% in 2021. The $3.0 billion unfavorable change in
mortgage loans was primarily due to credit spread widening and an increase in US
Treasury rates in the current year as well as unfavorable foreign exchange
impacts. Additionally, at the beginning of the year, and in conjunction with our
merger with Apollo, we elected the fair value option on our mortgage loans,
while in prior periods they were stated at unpaid principal, adjusted for any
unamortized premium or discount, net of allowance for credit losses. The
unfavorable changes in realized gains and losses on AFS securities of $1.1
billion and fair value of trading and equity securities of $741 million were
primarily due to credit spread widening compared to credit spread tightening in
the prior year, a larger increase in US Treasury rates in the current year and
unfavorable economics, including foreign exchange impacts. The unfavorable
change in the provision for credit losses of $280 million was primarily driven
by unfavorable economics, including impacts from the conflict between Russia and
Ukraine and exposure to China's real estate market. The increase in foreign
exchange derivative gains reflects additional assets denominated in foreign
currencies and the strengthening of the US dollar during the year.

Premiums decreased by $2.6 billion to $11.6 billion in 2022 from $14.3 billion
in 2021, primarily driven by lower pension group annuity premiums compared to
the prior year.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Net investment income increased by $471 million to $7.6 billion in 2022 from
$7.1 billion in 2021, primarily driven by growth in our investment portfolio
attributed to strong net flows during the previous twelve months and higher
floating rate income related to higher short-term interest rates. These
increases were partially offset by the favorable prior year change in fair value
of our investment in Apollo of $831 million, which was distributed to AGM
following the merger, less favorable alternative investment performance, the
transfer in 2022 of a significant portion of our alternative investments to AAA,
a consolidated VIE, higher investment management fees driven by the strong
growth in our investment portfolio and lower RMBS and bond call income. As a
result of purchase accounting, the book value of our investment portfolio was
marked up to fair value at the January 1, 2022 merger date, resulting in an
adverse impact to our net investment income.

VIE investment related gains (losses) increased by $346 million to $319 million
in 2022 from $(27) million in 2021, primarily driven by an increase in VIEs
consolidated as a result of our merger with Apollo as well as unrealized gains
on assets after the initial transfer to AAA.

Benefits and Expenses

Benefits and expenses decreased by $7.3 billion to $14.9 billion in 2022 from
$22.1 billion in 2021. The decrease was driven by a decrease in interest
sensitive contract benefits, a decrease in future policy and other policy
benefits and a decrease in DAC, DSI and VOBA amortization, partially offset by
an increase in policy and other operating expenses. Our annual unlocking of
assumptions resulted in a decrease in benefits and expenses of $41 million,
compared to an increase of $47 million in 2021. The 2022 unlocking was driven by
a decrease of $41 million in FIA embedded derivative liabilities and no net
impact related to DAC, DSI, VOBA, negative VOBA and rider reserves compared to a
decrease of $59 million in FIA embedded derivative liabilities and an increase
of $107 million related to DAC, DSI, VOBA and rider reserves in 2021.

Interest sensitive contract benefits decreased by $3.9 billion to $541 million
in 2022 from $4.4 billion in 2021, primarily driven by a decrease in the change
in FIA fair value embedded derivatives of $4.4 billion and higher negative VOBA
amortization resulting from purchase accounting, partially offset by growth in
the block of business. As a result of purchase accounting, we marked our reserve
liabilities to fair value at the January 1, 2022 merger date, resulting in a
favorable impact to our interest sensitive contract benefits primarily from
negative VOBA amortization. The change in the FIA fair value embedded
derivatives was primarily due to the performance of the equity indices to which
our FIA policies are linked, primarily the S&P 500 index, which decreased 19.4%
in 2022 compared to an increase of 26.9% in 2021, as well as a favorable change
in discount rates, partially offset by unfavorable economics impacting
policyholder projected benefits and an unfavorable change in unlocking compared
to the prior year. The FIA fair value embedded derivatives unlocking in 2022 was
$41 million favorable primarily due to changes to projected interest crediting,
partially offset by the impact of higher rates on future account values, while
unlocking in 2021 was $59 million favorable primarily due to higher lapse
assumptions on recently issued business. Additionally, negative VOBA unlocking
related to our interest sensitive contract liabilities was $1 million favorable
in 2022.

Future policy and other policy benefits decreased by $3.4 billion to $12.3
billion in 2022 from $15.7 billion in 2021, primarily attributable to lower
pension group annuity issuances, a decrease in the change in rider reserves,
higher negative VOBA amortization resulting from purchase accounting and a
decrease in the change in the AmerUs Closed Block fair value liability,
partially offset by higher benefit payments due to growth in the block of
business. The favorable change in rider reserves of $749 million was primarily
driven by the unfavorable change in reinsurance assets and net FIA derivatives
as well as a favorable change in unlocking compared to prior year. The change in
the AmerUs Closed Block fair value liability was primarily due to unrealized
losses on the underlying investments reflecting credit spreads widening and a
larger increase in US Treasury rates in the current year. Unlocking in 2022 was
$5 million unfavorable due to changes to projected interest crediting, partially
offset by the impact of higher rates on future account values, while unlocking
in 2021 was $97 million unfavorable related to changes in lapse assumptions,
partially offset by favorable income rider experience.

DAC, DSI and VOBA amortization decreased by $321 million to $509 million in 2022
from $830 million in 2021, primarily due to the unfavorable change in net FIA
derivatives as a result of the unfavorable equity market performance, impacts
from purchase accounting, which included the removal of historical DAC and DSI,
and a favorable change in unlocking, partially offset by the establishment of a
new VOBA asset. Unlocking in 2022 was $4 million favorable, primarily related to
the impact of higher rates on future account values, partially offset by changes
to projected interest crediting, while unlocking in 2021 was $10 million
unfavorable primarily related to changes in lapse assumptions and income rider
experience.

Policy and other operating expenses increased by $365 million to $1.5 billion in
2022 from $1.1 billion in 2021, primarily driven by significant growth in the
business, the amortization of newly established intangible assets as a result of
the merger and interest expense related to the issuance of repurchase
agreements, partially offset by the costs incurred in the prior year associated
with our merger with Apollo and a $53 million impairment of a Corporate-Owned
Life Insurance (COLI) asset.

Taxes

Income tax expense (benefit) decreased by $1.4 billion to $(976) million in 2022
from $386 million in 2021. The income tax benefit for 2022 was calculated by
applying the 21% US statutory rate to the loss of our US and foreign
subsidiaries (net of noncontrolling interests), and was primarily driven by the
unfavorable changes in fair value of reinsurance assets, mortgage loans and net
FIA derivatives.

Our effective tax rate in 2022 was a benefit of 13% compared to an expense of 9%
in 2021. The effective tax rate in 2022 was due to the change in fair value of
reinsurance assets, mortgage loans and net FIA derivatives subject to tax.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Noncontrolling Interests

Noncontrolling interests decreased by $2.0 billion to $(2.1) billion in 2022
from $(59) million in 2021, primarily due to the unfavorable change in fair
value of reinsurance assets as a result of more unrealized losses within
reinsurance investment portfolios.

Year Ended December 31, 2021 Compared to the Year Ended December 31, 2020

In this section, references to 2021 refer to the year ended December 31, 2021
and references to 2020 refer to the year ended December 31, 2020.

Net Income Available to AHL Common Shareholder

Net income available to AHL common shareholder increased by $2.3 billion, or
157%, to $3.7 billion in 2021 from $1.4 billion in 2020. The increase in net
income available to AHL common shareholder was driven by an $11.6 billion
increase in revenues and a $439 million decrease in noncontrolling interests,
partially offset by a $9.6 billion increase in benefits and expenses, a $101
million increase in income tax expense and a $46 million increase in preferred
stock dividends.

Revenues

Revenues increased by $11.6 billion to $26.3 billion in 2021 from $14.8 billion
in 2020. The increase was driven by an increase in premiums, an increase in net
investment income and an increase in investment related gains and losses.

Premiums increased by $8.3 billion to $14.3 billion in 2021 from $6.0 billion in
2020, driven by higher pension group annuity premiums compared to the prior
year.

Net investment income increased by $2.3 billion to $7.1 billion in 2021 from
$4.8 billion in 2020, primarily driven by growth in our investment portfolio
attributed to strong net flows during the previous twelve months as well as the
Jackson reinsurance transaction, favorable alternative investment performance,
the favorable change in the fair value of our investment in Apollo of $639
million mainly attributable to the increase in valuation price compared to prior
year and the early redemptions of two loans. These were partially offset by
lower new money rates reflecting the prolonged low interest rate environment and
lower floating rate investment income due to the low interest rate environment.

Investment related gains (losses) increased by $928 million to $4.2 billion in
2021 from $3.3 billion in 2020, primarily due to the change in fair value of FIA
hedging derivatives, foreign exchange gains on derivatives, an increase in the
fair value of equity securities and an increase in realized gains on AFS
securities, partially offset by the change in fair value of reinsurance assets
and a decrease in the change in fair value of trading securities. The change in
fair value of FIA hedging derivatives increased $1.6 billion driven by more
favorable performance of the indices upon which our call options are based and
an increase in derivatives hedging our FIA products resulting from strong growth
in our FIA block of business over the previous twelve months. The majority of
our call options are based on the S&P 500 index, which increased 26.9% in 2021
compared to an increase of 16.3% in 2020. The increase in foreign exchange gains
on derivatives reflects additional business denominated in foreign currencies
and the strengthening of the US dollar during 2021. The increase in the fair
value of equity securities was primarily due to an increase in the market value
of our equity position in Jackson. The increase in realized gains on AFS
securities was primarily driven by an increase in sales of corporate securities.
The change in fair value of reinsurance assets decreased $2.1 billion primarily
driven by the change in the value of the underlying assets related to the
increase in US Treasury rates compared to a decrease in the prior year. The
unfavorable change in fair value of reinsurance assets was magnified by the
growth in our reinsurance asset portfolio as a result of the Jackson reinsurance
transaction. The unfavorable change in fair value of trading securities was
primarily due to a decrease in AmerUs Closed Block assets of $160 million
primarily related to the increase in US Treasury rates.

Benefits and Expenses

Benefits and expenses increased by $9.6 billion to $22.1 billion in 2021 from
$12.6 billion in 2020. The increase was driven by an increase in future policy
and other policy benefits, an increase in interest sensitive contract benefits,
an increase in DAC, DSI and VOBA amortization and an increase in policy and
other operating expenses. Our annual unlocking of assumptions resulted in an
increase in benefits and expenses of $47 million, compared to a decrease of $77
million in 2020. The 2021 unlocking was driven by a decrease of $59 million in
FIA embedded derivative liabilities and an increase of $107 million related to
DAC, DSI, VOBA and rider reserves, compared to a decrease of $110 million in FIA
embedded derivative liabilities and an increase of $34 million related to DAC,
DSI, VOBA and rider reserves in 2020.

Future policy and other policy benefits increased by $8.5 billion to $15.7
billion in 2021 from $7.2 billion in 2020, primarily attributable to higher
pension group annuity obligations, higher pension group annuity benefit payments
and an increase in the change in rider reserves, partially offset by a decrease
in the AmerUs Closed Block liability. The change in rider reserves of $170
million was primarily driven by the change in net FIA derivatives, unfavorable
unlocking and higher gross profits, partially offset by a more favorable change
in actuarial experience and market impacts. Unlocking in 2021 was unfavorable
$97 million related to changes in lapse assumptions, partially offset by
favorable income rider experience. The 2020 unlocking impacts were favorable $26
million related to favorable income rider and mortality experience, partially
offset by changes in lapse assumptions and long-term net investment earned rate
assumptions.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Interest sensitive contract benefits increased by $551 million to $4.4 billion
in 2021 from $3.9 billion in 2020, driven by growth in the block of business,
including the Jackson reinsurance transaction, and an increase in the change in
FIA fair value embedded derivatives of $150 million. The change in the FIA fair
value embedded derivatives was primarily due to the performance of the equity
indices to which our FIA policies are linked, primarily the S&P 500 index, which
experienced an increase of 26.9% in 2021, compared to an increase of 16.3% in
2020, as well as an unfavorable change in unlocking compared to the prior year.
These were partially offset by a favorable change in discount rates used in our
embedded derivative calculations as the current year experienced an increase in
discount rates compared to a decrease in rates in 2020. The FIA fair value
embedded derivatives unlocking in 2021 was $59 million favorable primarily due
to higher lapse assumptions on recently issued business, while 2020 unlocking
was $110 million favorable primarily due to lowering future option budgets.

DAC, DSI and VOBA amortization increased by $243 million to $830 million in 2021
from $587 million in 2020, primarily due to the change in net FIA derivatives,
higher gross profits and growth in the block. These impacts were partially
offset by the unfavorable change in fair value of reinsurance assets, the
favorable change in actuarial experience and market impacts and the favorable
change in unlocking. Unlocking in 2021 was $10 million unfavorable, primarily
related to changes in lapse assumptions and income rider experience, while
unlocking in 2020 was $60 million unfavorable related to changes in the
long-term net investment earned rate assumptions and mortality experience,
partially offset by lapse assumptions.

Policy and other operating expenses increased by $235 million to $1.1 billion in
2021 from $893 million in 2020, primarily driven by significant growth in the
business, the costs associated with the previously announced merger with Apollo,
a $53 million impairment of a COLI asset and interest expense on recent debt
issuances.

Taxes

Income tax expense increased by $101 million to $386 million in 2021 from $285
million in 2020, primarily driven by higher income subject to tax due to the
favorable change in net FIA derivatives, unrealized gains on our investment in
Apollo, an increase in net investment income and the tax impact from the COLI
adjustment to deferred tax liabilities, partially offset by a $63 million
out-of-period adjustment in the third quarter of 2021 related to the correction
of previously disclosed errors in taxable income by jurisdiction, which resulted
in the misstatement of income tax expense, and an unfavorable change in the fair
value of reinsurance assets.

Our effective tax rate in 2021 was an expense of 9% compared to an expense of
13% in 2020. Our effective tax rate was dependent upon the relationship of
income or loss subject to tax compared to consolidated income or loss before
income taxes.

Noncontrolling Interests

Noncontrolling interests decreased by $439 million to $(59) million in 2021 from
$380 million in 2020, driven by an unfavorable change in fair value of
reinsurance assets as a result of more unrealized losses within reinsurance
investment portfolios, magnified by the Jackson reinsurance transaction.

Preferred Stock Dividends

Preferred stock dividends increased by $46 million to $141 million in 2021 from
$95 million in 2020, driven by dividends paid on recent preferred stock
issuances.

Summary of Non-GAAP Earnings

The following summarizes our spread related earnings:

                                                           Successor                             Predecessor
                                                                                       Year Ended           Year Ended
                                                          Year Ended                  December 31,         December 31,
(In millions)                                          December 31, 2022                  2021                 2020

Fixed income and other investment income, net $ 5,707

          $     5,325          $     4,836
Alternative investment income                                   1,206                      1,754                  492
Net investment earnings                                         6,913                      7,079                5,328
Strategic capital management fees                                  53                         39                   22
Cost of funds                                                  (3,897)                    (3,993)              (3,575)
Net investment spread                                           3,069                      3,125                1,775
Other operating expenses                                         (466)                      (359)                (324)
Interest and other financing costs                               (279)                      (257)                (196)
Spread related earnings                                $        2,324                $     2,509          $     1,255



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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021

Spread Related Earnings

SRE decreased by $185 million, or 7%, to $2.3 billion in 2022 from $2.5 billion
in 2021. The decrease in SRE was driven by lower net investment earnings and
higher other operating expenses, partially offset by lower cost of funds. Net
investment earnings decreased $166 million primarily driven by unfavorable
purchase accounting adjustments, less favorable alternative investment
performance compared to prior year, lower RMBS returns and lower bond call
income, partially offset by $28.7 billion of growth in our average net invested
assets and higher floating rate income. Other operating expenses increased $107
million mainly due to significant growth in the business. Cost of funds
decreased $96 million primarily driven by favorable purchase accounting
adjustments and the favorable change in unlocking, partially offset by growth in
the block of business, higher rates on existing floating rate funding agreements
and new PGA issuances, growth in the institutional block of business at higher
crediting rates, higher deferred annuity rates on new business and an
unfavorable change in market impacts. Unlocking, net of noncontrolling
interests, was favorable $6 million primarily related to the impact of higher
rates on future account values, partially offset by changes to projected
interest crediting, compared to unfavorable unlocking of $91 million in 2021
reflecting unfavorable lapse assumptions, partially offset by income rider
experience.

Net Investment Spread

                                                           Successor                                  Predecessor
                                                           Year Ended                 Year Ended December          Year Ended
                                                       December 31, 2022                   31, 2021             December 31, 2020
Fixed income and other investment earned rate                     3.22  %                         3.51  %                 3.82  %
Alternative investment earned rate                               10.42  %                        21.37  %                 8.01  %
Net investment earned rate                                        3.66  %                         4.42  %                 4.01  %
Strategic capital management fees                                 0.03  %                         0.02  %                 0.02  %
Cost of funds                                                     2.06  %                         2.50  %                 2.69  %
Net investment spread                                             1.63  %                         1.94  %                 1.34  %



Net investment spread decreased 31 basis points to 1.63% in 2022 from 1.94% in
2021. Our net investment earned rate was 3.66% in 2022, a decrease from 4.42% in
2021, primarily due to less favorable performance of our alternative investment
portfolio compared to prior year as well as lower returns in our fixed and other
investment portfolio. The alternative net investment earned rate was 10.42% in
2022, a decrease from 21.37% in 2021, primarily driven by significant
outperformance in the prior year, partially offset by strong returns on real
estate funds, Wheels Donlen and Athora in the current year. The prior year
outperformance was mainly due to a higher return on AmeriHome Mortgage Company,
LLC (AmeriHome) related to a valuation increase resulting from the eventual sale
in the second quarter of 2021, a higher Venerable return attributed to a
valuation increase driven by a reinsurance agreement with Equitable Financial
Life Insurance Company and higher equity fund returns driven by more favorable
economics in the prior year. Fixed and other net investment earned rate was
3.22% in 2022, a decrease from 3.51% in 2021, primarily driven by unfavorable
purchase accounting impacts, lower RMBS returns and lower bond call income,
partially offset by favorable floating rate income.

Cost of funds decreased by 44 basis points to 2.06% in 2022, from 2.50% in 2021,
primarily driven by favorable purchase accounting adjustments and the favorable
change in unlocking, partially offset by higher rates on existing floating rate
funding agreements and new PGA issuances, growth in the institutional block of
business at higher crediting rates, higher deferred annuity rates on new
business and an unfavorable change in market impacts.

Adjustments to Net Income (Loss) Available to Athene Holding Ltd. Common
Shareholder

The decrease in adjustments to net income (loss) available to AHL common
shareholder compared to 2021 was primarily driven by the change in investment
related gains and losses and the non-operating change in insurance liabilities
and related derivatives, net of offsets.

Investment related gains and losses, net of offsets, were unfavorable $8.0
billion primarily due to the changes in fair value of reinsurance assets and
mortgage loan assets, the prior year favorable change in the fair value of our
investment in Apollo of $831 million, which was distributed to AGM following the
merger, realized losses on the sale of AFS securities in the current year
compared to realized gains on the sale of AFS securities in the prior year
related to changes in economics, and the change in the provision for credit
losses. The unfavorable changes in fair value of reinsurance assets of $3.5
billion and mortgage loans were primarily due to credit spread widening compared
to credit spread tightening in the prior year and a larger increase in US
Treasury rates in the current year. Additionally, at the beginning of 2022 in
conjunction with our merger with Apollo, we elected the fair value option on our
mortgage loans, while in prior periods they were stated at unpaid principal,
adjusted for any unamortized premium or discount, net of an allowance for credit
losses. The unfavorable change in the provision for credit losses of $202
million (net of noncontrolling interests) was primarily driven by unfavorable
economics, including impacts from the conflict between Russia and Ukraine and
exposure to China's real estate market.
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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Non-operating change in insurance liabilities and related derivatives, net of
offsets was unfavorable $1.1 billion primarily due to the unfavorable change in
net FIA derivatives resulting from the unfavorable performance of the equity
indices to which our FIA policies are linked, primarily the S&P 500 index, which
experienced a decrease of 19.4% in 2022, compared to an increase of 26.9% in
2021, as well as unfavorable economics impacting the policyholder projected
benefits, partially offset by the favorable change in discount rates and the
favorable change in unlocking. FIA embedded derivative unlocking, net of DAC,
DSI, rider reserve and noncontrolling interest offsets, was favorable $37
million in 2022 primarily due to changes to projected interest crediting,
partially offset by the impact of higher rates on future account values,
compared to a favorable change of $32 million in 2021 primarily due to higher
lapse rates on recently issued business.

Year Ended December 31, 2021 Compared to the Year Ended December 31, 2020

Spread Related Earnings

SRE increased by $1.3 billion, or 100%, to $2.5 billion in 2021 from $1.3
billion in 2020. The increase in SRE was driven by higher net investment
earnings, partially offset by higher cost of funds and higher interest and other
financing costs from more recent preferred share and senior debt issuances. Net
investment earnings increased $1.8 billion primarily driven by favorable
alternative investment performance, $27.3 billion of growth in our average net
invested assets attributed to the strong growth in net flows as well as the
Jackson reinsurance transaction and the early redemptions of two loans,
partially offset by lower new money rates reflecting the prolonged low interest
rate environment, lower floating rate investment income and a favorable 2020
non-recurring adjustment on derivative collateral. Cost of funds were $418
million higher primarily related to growth in the block of business, higher
gross profits and the unfavorable change in unlocking of $97 million, partially
offset by the favorable change in rider reserves and DAC amortization reflecting
the more favorable change in actuarial experience and market impacts. Unlocking,
net of noncontrolling interest, was unfavorable $91 million reflecting
unfavorable lapse assumptions, partially offset by income rider experience,
compared to favorable unlocking of $6 million in 2020 primarily driven by
favorable income rider experience and mortality updates, largely offset by
long-term net investment earned rate and lapse assumptions.

Net Investment Spread
Net investment spread increased 60 basis points to 1.94% in 2021 from 1.34% in
2020. Our net investment earned rate was 4.42% in 2021, an increase from 4.01%
in 2020, primarily due to the favorable performance of our alternative
investment portfolio, partially offset by the decline in the fixed and other net
investment earned rate. The alternative net investment earned rate was 21.37% in
2021, an increase from 8.01% in 2020, primarily driven by higher returns on real
estate funds, a higher Venerable return attributed to a valuation increase
related to the announced reinsurance agreement with Equitable Financial Life
Insurance Company, an increase in the market value of our equity position in
Jackson and higher MidCap returns as a result of a valuation increase in 2021
relating to a capital raise priced at a premium compared to a decrease in
valuation in 2020, partially offset by less favorable AmeriHome income as a
result of the sale in April of 2021 and strong earnings in 2020. Additionally,
the first half of the prior year experienced unfavorable performance of
alternative investments attributed to the economic downturn from the spread of
COVID-19. The fixed and other net investment earned rate was 3.51% in 2021, a
decrease from 3.82% in 2020, primarily attributed to lower new money rates
reflecting the prolonged low interest rate environment, lower floating rate
investment income and a favorable 2020 non-recurring adjustment on derivative
collateral, partially offset by the early redemptions of two loans in 2021.

Cost of funds decreased by 19 basis points to 2.50% in 2021, from 2.69% in 2020,
primarily driven by lower rates on recent funding agreement issuances and
pension group annuity transactions, favorable deferred annuity rates due to
favorable rate actions and lower option costs, a favorable change in rider
reserves and DAC amortization attributed to the favorable change in actuarial
experience and market impacts, partially offset by an increase in mix of the
higher crediting rate institutional block, higher gross profits and unfavorable
unlocking.

Adjustments to Net Income Available to AHL Common Shareholder

The increase in adjustments to net income available to AHL common shareholder
compared to 2020 was primarily driven by the non-operating change in insurance
liabilities and related derivatives, net of offsets and the change in investment
related gains and losses, partially offset by higher non-operating expenses.

Non-operating change in insurance liabilities and related derivatives, net of
offsets was favorable $927 million primarily due to the favorable net FIA
derivatives resulting from a favorable change in discount rates used in our
embedded derivative calculations and a more favorable performance of the equity
indices to which our FIA policies are linked. FIA embedded derivative unlocking,
net of DAC, DSI, VOBA, rider reserve and noncontrolling interest offsets, was
favorable $32 million in both 2021 and 2020. The 2021 unlocking was primarily
driven by higher lapse rates on recently issued business, while the 2020
unlocking was primarily driven by lowering future option budgets.

Investment related gains and losses, net of offsets, were favorable $291 million
primarily driven by the favorable change in the fair value of our investment in
Apollo of $639 million related to the increase in valuation price compared to
2020, realized gains on the sale of AFS securities, foreign exchange gains and a
favorable change in the provision for credit losses, partially offset by the
unfavorable change in fair value of reinsurance assets. The increase in realized
gains on AFS securities was primarily due to an increase in sales of corporate
securities and the redeployment of the Jackson reinsurance portfolio. The
increase in foreign exchange gains reflects additional business denominated in
foreign currencies. The favorable change in the provision for credit losses of
$73 million (net of noncontrolling interests) was primarily due to the initial
establishment of the allowance in the first quarter of 2020 as well as
unfavorable impacts reflecting the economic downturn from the spread of COVID-19
in 2020. The change in fair value of reinsurance assets was unfavorable $1.4
billion primarily driven by the increase in US Treasury rates in 2021 compared
to a decrease in 2020.
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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The increase in non-operating expenses was primarily due to the costs associated
with the merger with Apollo and a $53 million impairment of a COLI asset.

Investment Portfolio

We had consolidated investments, including related parties and VIEs, of $212.1
billion and $212.5 billion as of December 31, 2022 and 2021, respectively. Our
investment strategy seeks to achieve sustainable risk-adjusted returns through
the disciplined management of our investment portfolio against our long-duration
liabilities, coupled with the diversification of risk. The investment strategies
utilized by our investment manager focuses primarily on a buy and hold asset
allocation strategy that may be adjusted periodically in response to changing
market conditions and the nature of our liability profile. Substantially all of
our investment portfolio is managed by Apollo, which provides a full suite of
services for our investment portfolio, including direct investment management,
asset allocation, mergers and acquisition asset diligence and certain
operational support services, including investment compliance, tax, legal and
risk management support. Our relationship with Apollo allows us to take
advantage of our generally persistent liability profile by identifying
investment opportunities with an emphasis on earning incremental yield by taking
liquidity and complexity risk rather than assuming incremental credit risk.
Apollo's investment team and credit portfolio managers utilize their deep
experience to assist us in sourcing and underwriting complex asset classes.
Apollo has selected a diverse array of primarily high-grade fixed income assets
including corporate bonds, structured securities and commercial and residential
real estate loans, among others. We also maintain holdings in floating rate and
less rate-sensitive instruments, including CLOs, non-agency RMBS and various
types of structured products. In addition to our fixed income portfolio, we
opportunistically allocate approximately 5% - 6% of our portfolio to alternative
investments where we primarily focus on fixed income-like, cash flow-based
investments.

Net investment income on the consolidated statements of income (loss) included
management fees under our investment management arrangements with Apollo. For
the years ended December 31, 2022, 2021 and 2020, we incurred management fees,
inclusive of base and sub-allocation fees, of $775 million, $592 million and
$490 million, respectively. The total amounts we incurred, directly and
indirectly, from Apollo and its affiliates were $1.1 billion, $936 million, and
$716 million, respectively, for the years ended December 31, 2022, 2021 and
2020. Such amounts include (1) fees associated with investment management
agreements, which exclude sub-advisory fees paid to ISG for the benefit of
third-party sub-advisors but include fees charged by Apollo to third-party
cedants with respect to assets supporting obligations reinsured to us (such fees
directly reduce the settlement payments that we receive from the third-party
cedant and, as such, we, as beneficiaries of the services performed, indirectly
pay such fees), (2) fees associated with fund investments (including those fund
investments held by AAA), which include management fees, carried interest
(including unrealized but accrued carried interest fees) and other fees on
Apollo-managed funds and our other alternative investments and (3) other fees
resulting from shared services, advisory and other agreements with Apollo or its
affiliates; net of fees incurred directly and indirectly attributable to ACRA,
based upon the economic ownership of the noncontrolling interest in ACRA.

Our net invested assets, which are those that directly back our net reserve
liabilities as well as surplus assets, were $196.5 billion and $175.3 billion as
of December 31, 2022 and 2021, respectively. Apollo's knowledge of our funding
structure and regulatory requirements allows it to design customized strategies
and investments for our portfolio. Apollo manages our asset portfolio within the
limits and constraints set forth in our Investment and Credit Risk Policy. Under
this policy, we set limits on investments in our portfolio by asset class, such
as corporate bonds, emerging markets securities, municipal bonds, non-agency
RMBS, CMBS, CLOs, commercial mortgage whole loans and mezzanine loans and
investment funds. We also set credit risk limits for exposure to a single issuer
that vary based on the issuer's ratings. Our strategic investments are also
governed by our Strategic Investment Risk Policy which provides for special
governance and risk management procedures for these transactions. In addition,
our investment portfolio is constrained by its scenario-based capital ratio
limit and its stressed liquidity limit.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The following table presents the carrying values of our total investments
including related parties and VIEs:

                                                          Successor                                           Predecessor
                                                      December 31, 2022                                    December 31, 2021
                                               Carrying          Percent of Total                Carrying Value          Percent of Total
(In millions, except percentages)                Value
AFS securities, at fair value                $  102,404                   48.3  %             $         100,159                   47.1  %
Trading securities, at fair value                 1,595                    0.8  %                         2,056                    1.0  %
Equity securities                                 1,487                    0.7  %                         1,170                    0.5  %
Mortgage loans                                   27,454                   12.9  %                        20,748                    9.8  %
Investment funds                                     79                      -  %                         1,178                    0.6  %
Policy loans                                        347                    0.2  %                           312                    0.1  %
Funds withheld at interest                       32,880                   15.5  %                        43,907                   20.7  %
Derivative assets                                 3,309                    1.6  %                         4,387                    2.1  %
Short-term investments                            2,160                    1.0  %                           139                    0.1  %
Other investments                                   773                    0.4  %                         1,473                    0.7  %
Total investments                               172,488                   81.4  %                       175,529                   82.7  %
Investments in related parties
AFS securities, at fair value                     9,821                    4.6  %                        10,402                    4.9  %
Trading securities, at fair value                   878                    0.4  %                         1,781                    0.8  %
Equity securities, at fair value                    279                    0.1  %                           284                    0.1  %
Mortgage loans                                    1,302                    0.6  %                         1,360                    0.6  %
Investment funds                                  1,569                    0.7  %                         7,391                    3.5  %
Funds withheld at interest                        9,808                    4.6  %                        12,207                    5.7  %

Other investments                                   303                    0.2  %                           222                    0.1  %
Total related party investments                  23,960                   11.2  %                        33,647                   15.7  %
Total investments including related parties     196,448                   92.6  %                       209,176                   98.4  %
Investments owned by consolidated VIEs
Trading securities, at fair value                 1,063                    0.5  %                             -                      -  %

Mortgage loans                                    2,055                    1.0  %                         2,040                    1.0  %
Investment funds, at fair value                  12,480                    5.9  %                         1,297                    0.6  %
Other investments, at fair value                    101                      -  %                             -                      -  %
Total investments owned by consolidated VIEs     15,699                    7.4  %                         3,337                    1.6  %
Total investments including related parties
and VIEs                                     $  212,147                  100.0  %             $         212,513                  100.0  %



The decrease in our total investments, including related parties and VIEs, as of
December 31, 2022 of $366 million compared to December 31, 2021 was primarily
driven by unrealized losses on AFS securities in the year ended December 31,
2022 of $18.2 billion, unrealized losses within our funds withheld portfolio,
the distribution of our $2.1 billion investment in Apollo to AGM following the
merger and a decrease in the change in fair value of mortgage loan assets and
trading securities primarily due to an increase in US Treasury rates and credit
spread widening in the current year. This was primarily offset by growth from
gross organic inflows of $47.9 billion in excess of gross liability outflows of
$23.0 billion, an increase in investments due to the consolidation of additional
VIEs in conjunction with our merger with Apollo, the reinvestment of earnings,
an increase in short-term investments related to the issuance of a reverse
repurchase agreement and the deployment of proceeds from the issuances of $500
million of preferred stock and $400 million of debt.

Our investment portfolio consists largely of high quality fixed maturity
securities, loans and short-term investments, as well as additional
opportunistic holdings in investment funds and other instruments, including
equity holdings. Fixed maturity securities and loans include publicly issued
corporate bonds, government and other sovereign bonds, privately placed
corporate bonds and loans, mortgage loans, CMBS, RMBS, CLOs, and ABS.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

While the substantial majority of our investment portfolio has been allocated to
corporate bonds and structured credit products, a key component of our
investment strategy is the opportunistic acquisition of investment funds with
attractive risk and return profiles. Our investment fund portfolio consists of
funds or similar equity structures that employ various strategies including
equity, hybrid and yield funds. We have a strong preference for assets that have
some or all of the following characteristics, among others: (1) investments that
constitute a direct investment or an investment in a fund with a high degree of
co-investment; (2) investments with credit- or debt-like characteristics (for
example, a stipulated maturity and par value), or alternatively, investments
with reduced volatility when compared to pure equity; or (3) investments that we
believe have less downside risk.

We hold derivatives for economic hedging purposes to reduce our exposure to the
cash flow variability of assets and liabilities, equity market risk, interest
rate risk, credit risk and foreign exchange risk. Our primary use of derivative
instruments relates to providing the income needed to fund the annual indexed
credits on our FIA products. We primarily use fixed indexed options to
economically hedge indexed annuity products that guarantee the return of
principal to the policyholder and credit interest based on a percentage of the
gain in a specific market index.

With respect to derivative positions, we transact with highly rated
counterparties, and expect the counterparties to fulfill their obligations under
the contracts. We generally use industry standard agreements and annexes with
bilateral collateral provisions to further reduce counterparty credit exposure.

Related Party Investments

We hold investments in related party assets primarily comprised of AFS
securities, trading securities, funds withheld at interest receivables, mortgage
loans within our triple net lease investment and investment funds, which
primarily include investments over which Apollo can exercise influence. As of
December 31, 2022, these investments totaled $34.4 billion, or 13.9% of our
total assets. Related party AFS and trading securities primarily consist of
structured securities for which Apollo is the manager of the underlying
securitization vehicle and securities issued by Apollo direct origination
platforms including Wheels Donlen and MidCap. In each case, the underlying
collateral, borrower or other credit party is generally unaffiliated with us.
The funds withheld at interest related party amounts are comprised of the
Venerable reinsurance portfolios, which are considered related party even though
a significant majority of the underlying assets within the investment portfolios
do not have a related party affiliation. Related party investment funds include
strategic investments in direct origination platforms and insurance companies
and investments in Apollo managed funds.

A summary of our related party investments reflecting the nature of the
affiliation is as follows:

                                                            Successor                                         Predecessor
                                                        December 31, 2022                                  December 31, 2021
                                                 Carrying         Percent of Total                                       Percent of Total
(In millions, except percentages)                 Value                Assets                    Carrying Value               Assets
Venerable funds withheld reinsurance portfolio $   9,808                    4.0  %             $         12,207                    5.2  %
Securitizations of unaffiliated assets where
Apollo is manager                                 11,141                    4.5  %                        9,495                    4.0  %
Investments in Apollo funds                        5,410                    2.2  %                        3,785                    1.6  %
Strategic investments in Apollo direct
origination platforms                              5,509                    2.2  %                        5,704                    2.4  %
Strategic investment in Apollo                         -                      -  %                        2,112                    0.9  %
Strategic investments in insurance companies       2,502                    1.0  %                        1,626                    0.7  %
Other                                                  -                      -  %                           17                      -  %
Total related party investments                $  34,370                   13.9  %             $         34,946                   14.8  %



As of December 31, 2022, a $9.8 billion funds withheld reinsurance asset with
Venerable was included in our US GAAP related party assets. Venerable is a
related party due to our minority equity investment in its holding company's
parent, VA Capital. For US GAAP, each funds withheld and modified coinsurance
reinsurance portfolio is treated as one asset rather than reporting the
underlying investments in the portfolio. For our non-GAAP measure of net
invested assets, we provide visibility into the underlying assets within these
reinsurance portfolios. The below table looks through to the underlying assets
within our reinsurance portfolios to determine the related party status. As of
December 31, 2022, $28.3 billion, or 14.4% of our total net invested assets were
related party investments. Of these, approximately $14.8 billion, or 7.6% of our
net invested assets were structured securities for which Apollo or an affiliated
direct origination platform was the manager of the underlying securitization
vehicle, but the underlying collateral, borrower or other credit party is
generally unaffiliated with us. Related party investments in strategic
affiliated companies or Apollo funds represented $13.4 billion, or 6.8% of our
net invested assets.







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of Operations

A summary of our related party net invested assets reflecting the nature of the
affiliation is as follows:

                                                             Successor                                          Predecessor
                                                         December 31, 2022                                  December 31, 20211
                                               Net Invested         Percent of Net                 Net Invested           Percent of Net
(In millions, except percentages)               Asset Value         Invested Assets                 Asset Value           Invested Assets
Securitizations of unaffiliated assets where
Apollo is manager                              $   14,847                     7.6  %             $       13,736                     7.8  %
Investments in Apollo funds                         5,521                     2.8  %                      3,802                     2.2  %
Strategic investments in Apollo direct
origination platforms                               5,509                     2.8  %                      6,074                     3.5  %
Strategic investment in Apollo                          -                       -  %                      2,112                     1.2  %
Strategic investments in insurance companies        2,391                     1.2  %                      1,626                     0.9  %
Other                                                   -                       -  %                         17                       -  %
Total related party net invested assets        $   28,268                    14.4  %             $       27,367                    15.6  %

1 Prior year related party net invested asset values have been revised.

AFS Securities

We invest in AFS securities and attempt to source investments that match our
future cash flow needs. However, we may sell any of our investments in advance
of maturity to timely satisfy our liabilities as they become due or in order to
respond to a change in the credit profile or other characteristics of the
particular investment.

AFS securities are carried at fair value, less allowances for expected credit
losses, on our consolidated balance sheets. Changes in fair value of our AFS
securities, net of related DAC and DSI amortization and the change in rider
reserves, are charged or credited to other comprehensive income, net of tax. All
changes in the allowance for expected credit losses, whether due to passage of
time, change in expected cash flows or change in fair value are recorded through
the provision for credit losses within investment related gains (losses) on the
consolidated statements of income (loss).

The distribution of our AFS securities, including related parties, by type is as
follows:

                                                                                                     Successor
                                                                                                 December 31, 2022
                                                                    Allowance for                                     Unrealized                              Percent of
(In millions, except percentages)           Amortized Cost          Credit Losses           Unrealized Gains            Losses            Fair Value             Total
AFS securities
US government and agencies                $         3,333          $           -          $               -          $     (756)         $    2,577                 2.3  %
US state, municipal and political
subdivisions                                        1,218                      -                          -                (291)                927                 0.8  %
Foreign governments                                 1,207                    (27)                         3                (276)                907                 0.8  %
Corporate                                          74,644                    (61)                        92             (13,774)             60,901                54.3  %
CLO                                                17,722                     (7)                       115              (1,337)             16,493                14.7  %
ABS                                                11,447                    (29)                        15                (906)             10,527                 9.4  %
CMBS                                                4,636                     (5)                         6                (479)              4,158                 3.7  %
RMBS                                                6,775                   (329)                        64                (596)              5,914                 5.3  %
Total AFS securities                              120,982                   (458)                       295             (18,415)            102,404                91.3  %
AFS securities - related parties
Corporate                                           1,028                      -                          1                 (47)                982                 0.9  %
CLO                                                 3,346                     (1)                        10                (276)              3,079                 2.7  %
ABS                                                 6,066                      -                          3                (309)              5,760                 5.1  %
Total AFS securities - related parties             10,440                     (1)                        14                (632)              9,821                 8.7  %
Total AFS securities including related
parties                                   $       131,422          $        (459)         $             309          $  (19,047)         $  112,225               100.0  %


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                                                                                                    Predecessor
                                                                                                 December 31, 2021
                                                                   Allowance for                                      Unrealized                               Percent of

(In millions, except percentages) Amortized Cost Credit Losses

           Unrealized Gains             Losses             Fair Value             Total
AFS securities
US government and agencies               $           231          $           -          $               2          $        (10)         $      223                 0.2  %
US state, municipal and political
subdivisions                                       1,081                      -                        134                    (2)              1,213                 1.1  %
Foreign governments                                1,110                      -                         35                   (17)              1,128                 1.0  %
Corporate                                         62,817                      -                      4,060                  (651)             66,226                59.9  %
CLO                                               13,793                      -                         44                  (185)             13,652                12.4  %
ABS                                                8,890                    (17)                       151                   (35)              8,989                 8.1  %
CMBS                                               2,764                     (3)                        56                   (59)              2,758                 2.5  %
RMBS                                               5,772                   (103)                       326                   (25)              5,970                 5.4  %
Total AFS securities                              96,458                   (123)                     4,808                  (984)            100,159                90.6  %
AFS securities - related parties
Corporate                                            842                      -                         19                    (2)                859                 0.8  %
CLO                                                2,573                      -                          5                   (29)              2,549                 2.3  %
ABS                                                6,986                      -                         61                   (53)              6,994                 6.3  %
Total AFS securities - related parties            10,401                      -                         85                   (84)             10,402                 9.4  %
Total AFS securities including related
parties                                  $       106,859          $        (123)         $           4,893          $     (1,068)         $  110,561               100.0  %



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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

We maintain a diversified AFS portfolio of corporate fixed maturity securities
across industries and issuers, and a diversified portfolio of structured
securities. The composition of our AFS securities, including related parties, is
as follows:

                                                               Successor                                           Predecessor
                                                           December 31, 2022                                    December 31, 2021
(In millions, except percentages)                  Fair Value         Percent of Total                  Fair Value            Percent of Total
Corporate
Industrial other1                                $    18,923                   16.9  %             $          23,882                   21.6  %
Financial                                             23,402                   20.8  %                        21,537                   19.5  %
Utilities                                             13,100                   11.7  %                        14,290                   12.9  %
Communication                                          3,097                    2.8  %                         3,492                    3.2  %
Transportation                                         3,361                    3.0  %                         3,884                    3.5  %
Total corporate                                       61,883                   55.2  %                        67,085                   60.7  %
Other government-related securities
US state, municipal and political subdivisions           927                    0.8  %                         1,213                    1.1  %
Foreign governments                                      907                    0.8  %                         1,128                    1.0  %
US government and agencies                             2,577                    2.3  %                           223                    0.2  %
Total non-structured securities                       66,294                   59.1  %                        69,649                   63.0  %
Structured securities
CLO                                                   19,572                   17.4  %                        16,201                   14.7  %
ABS                                                   16,287                   14.5  %                        15,983                   14.4  %
CMBS                                                   4,158                    3.7  %                         2,758                    2.5  %
RMBS
Agency                                                    12                    0.0  %                            23                      -  %
Non-agency                                             5,902                    5.3  %                         5,947                    5.4  %
Total structured securities                           45,931                   40.9  %                        40,912                   37.0  %
Total AFS securities including related parties   $   112,225                  100.0  %             $         110,561                  100.0  %

1 Includes securities within various industry segments including capital goods, basic industry, consumer cyclical, consumer non-cyclical,
industrial and technology.

The fair value of our AFS securities, including related parties, was $112.2
billion and $110.6 billion as of December 31, 2022 and 2021, respectively. The
increase was mainly driven by strong growth from organic inflows in excess of
liability outflows, the reinvestment of earnings and the deployment of proceeds
from the issuances of preferred stock and debt, mainly offset by unrealized
losses on AFS securities of $18.2 billion attributed to an increase in US
Treasury rates and credit spread widening.

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The Securities Valuation Office (SVO) of the NAIC is responsible for the credit
quality assessment and valuation of securities owned by state regulated
insurance companies. Insurance companies report ownership of securities to the
SVO when such securities are eligible for filing on the relevant schedule of the
NAIC Financial Statement. The SVO conducts credit analysis on these securities
for the purpose of assigning an NAIC designation and/or unit price. Generally,
the process for assigning an NAIC designation varies based upon whether a
security is considered "filing exempt" (General Designation Process). Subject to
certain exceptions, a security is typically considered "filing exempt" if it has
been rated by a Nationally Recognized Statistical Rating Organization (NRSRO).
For securities that are not "filing exempt," insurance companies assign
temporary designations based upon a subjective evaluation of credit quality. The
insurance company generally must then submit the securities to the SVO within
120 days of acquisition to receive an NAIC designation. For securities
considered "filing exempt," the SVO utilizes the NRSRO rating and assigns an
NAIC designation based upon the following system:

                     NAIC designation       NRSRO equivalent rating
                          1 A-G                     AAA/AA/A
                          2 A-C                       BBB
                          3 A-C                        BB
                          4 A-C                        B
                          5 A-C                       CCC
                            6                     CC and lower



An important exception to the General Designation Process occurs in the case of
certain loan backed and structured securities ( LBaSS). The NRSRO ratings
methodology is focused on the likelihood of recovery of all contractual
payments, including principal at par, regardless of an investor's carrying
value. In effect, the NRSRO rating assumes that the holder is the original
purchaser at par. In contrast, the SVO's LBaSS methodology is focused on
determining the risk associated with the recovery of the amortized cost of each
security. Because the NAIC's methodology explicitly considers amortized cost and
the likelihood of recovery of such amount, we view the NAIC's methodology as the
most appropriate means of evaluating the credit quality of our fixed maturity
portfolio since a large portion of our holdings were purchased and are carried
at significant discounts to par.

The SVO has developed a designation process and provides instruction on modeled
LBaSS. For modeled LBaSS, the process is specific to the non-agency RMBS and
CMBS asset classes. To establish ratings at the individual security level, the
SVO obtains loan-level analysis of each RMBS and CMBS using a selected vendor's
proprietary financial model. The SVO ensures that the vendor has extensive
internal quality-control processes in place and the SVO conducts its own
quality-control checks of the selected vendor's valuation process. The SVO has
retained the services of Blackrock, Inc. (Blackrock) to model non-agency RMBS
and CMBS owned by US insurers for all years presented herein. Blackrock provides
five prices (breakpoints), based on each US insurer's statutory book value
price, to utilize in determining the NAIC designation for each modeled LBaSS.

The NAIC designation determines the associated level of risk-based capital that
an insurer is required to hold for all securities owned by the insurer. In
general, under the modeled LBaSS process, the larger the discount to par value
at the time of determination, the higher the NAIC designation the LBaSS will
have.

A summary of our AFS securities, including related parties, by NAIC designation
is as follows:

                                                               Successor                                                              Predecessor
                                                           December 31, 2022                                                       December 31, 2021
                                        Amortized Cost          Fair Value           Percent of                 Amortized Cost          Fair Value           Percent of
(In millions, except percentages)                                                      Total                                                                   Total
NAIC designation
1 A-G                                 $        67,739          $   58,470                 52.1  %             $        49,639          $   51,514                 46.6  %
2 A-C                                          58,139              49,067                 43.7  %                      51,587              53,398                 48.3  %
Total investment grade                        125,878             107,537                 95.8  %                     101,226             104,912                 94.9  %
3 A-C                                           3,813               3,302                  3.0  %                       4,199               4,247                  3.8  %
4 A-C                                           1,103                 925                  0.8  %                       1,113               1,100                  1.0  %
5 A-C                                             237                 190                  0.2  %                          94                  88                  0.1  %
6                                                 391                 271                  0.2  %                         227                 214                  0.2  %
Total below investment grade                    5,544               4,688                  4.2  %                       5,633               5,649                  5.1  %
Total AFS securities including
related parties                       $       131,422          $  112,225                100.0  %             $       106,859          $  110,561                100.0  %



A significant majority of our AFS portfolio, 95.8% and 94.9% as of December 31,
2022 and 2021, respectively, was invested in assets considered investment grade
with an NAIC designation of 1 or 2.

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A summary of our AFS securities, including related parties, by NRSRO ratings is
set forth below:

                                                            Successor                                             Predecessor
                                                        December 31, 2022                                      December 31, 2021
(In millions, except percentages)               Fair Value           Percent of Total                  Fair Value            Percent of Total
NRSRO rating agency designation
AAA/AA/A                                     $       51,926                   46.3  %             $          44,501                   40.2  %
BBB                                                  44,783                   39.9  %                        47,636                   43.1  %
Non-rated1                                            8,985                    8.0  %                        10,754                    9.7  %
Total investment grade                              105,694                   94.2  %                       102,891                   93.0  %
BB                                                    3,176                    2.8  %                         3,713                    3.4  %
B                                                       749                    0.7  %                           946                    0.9  %
CCC                                                   1,055                    0.9  %                         1,356                    1.2  %
CC and lower                                            584                    0.5  %                           755                    0.7  %
Non-rated1                                              967                    0.9  %                           900                    0.8  %
Total below investment grade                          6,531                    5.8  %                         7,670                    7.0  %
Total AFS securities including related
parties                                      $      112,225                  100.0  %             $         110,561                  100.0  %

1 Securities denoted as non-rated by the NRSRO were classified as investment or non-investment grade according to the security's respective
NAIC designation. With respect to modeled LBaSS, the NAIC designation methodology differs in significant respects from the NRSRO rating
methodology.

Consistent with the NAIC Process and Procedures Manual, an NRSRO rating was
assigned based on the following criteria: (a) the equivalent S&P rating when the
security is rated by one NRSRO; (b) the equivalent S&P rating of the lowest
NRSRO when the security is rated by two NRSROs; and (c) the equivalent S&P
rating of the second lowest NRSRO when the security is rated by three or more
NRSROs. If the lowest two NRSRO ratings are equal, then such rating will be the
assigned rating. NRSRO ratings available for the periods presented were S&P,
Fitch, Moody's Investor Service, DBRS, and Kroll Bond Rating Agency, Inc.

The portion of our AFS portfolio that was considered below investment grade
based on NRSRO ratings was 5.8% and 7.0% as of December 31, 2022 and 2021,
respectively. The primary driver of the difference in the percentage of
securities considered below investment grade by NRSRO as compared to the
securities considered below investment grade by the NAIC is the difference in
methodologies between the NRSRO and NAIC for RMBS due to investments acquired
and/or carried at a discount to par value, as discussed above.

As of December 31, 2022 and 2021, non-rated securities were comprised 74% and
73%, respectively, of corporate private placement securities for which we have
not sought individual ratings from an NRSRO, and 16% and 17%, respectively, of
RMBS, many of which were acquired at a significant discount to par. We rely on
internal analysis and designations assigned by the NAIC to evaluate the credit
risk of our portfolio. As of December 31, 2022 and 2021, 90% and 92%,
respectively, of the non-rated securities were designated NAIC 1 or 2.

Asset-backed Securities - We invest in ABS which are securitized by pools of
assets such as consumer loans, automobile loans, student loans, insurance-linked
securities, operating cash flows of corporations and cash flows from various
types of business equipment. Our ABS holdings were $16.3 billion and $16.0
billion as of December 31, 2022 and 2021, respectively.
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A summary of our AFS ABS portfolio, including related parties, by NAIC
designations and NRSRO quality ratings is as follows:

                                                          Successor                                         Predecessor
                                                      December 31, 2022                                  December 31, 2021
(In millions, except percentages)             Fair Value        Percent of Total                 Fair Value            Percent of Total
NAIC designation
1 A-G                                        $   9,681                   59.4  %             $          8,089                   50.6  %
2 A-C                                            5,912                   36.3  %                        7,047                   44.1  %
Total investment grade                          15,593                   95.7  %                       15,136                   94.7  %
3 A-C                                              505                    3.1  %                          643                    4.0  %
4 A-C                                              172                    1.1  %                          200                    1.3  %
5 A-C                                               13                    0.1  %                            4                      -  %
6                                                    4                      -  %                            -                      -  %
Total below investment grade                       694                    4.3  %                          847                    5.3  %
Total AFS ABS including related parties      $  16,287                  100.0  %             $         15,983                  100.0  %

NRSRO rating agency designation
AAA/AA/A                                     $   9,620                   59.1  %             $          7,892                   49.4  %
BBB                                              5,901                   36.2  %                        6,975                   43.5  %
Non-rated                                           73                    0.4  %                          232                    1.5  %
Total investment grade                          15,594                   95.7  %                       15,099                   94.4  %
BB                                                 505                    3.1  %                          680                    4.3  %
B                                                  172                    1.1  %                          200                    1.3  %
CCC                                                 13                    0.1  %                            4                      -  %
CC and lower                                         3                      -  %                            -                      -  %
Non-rated                                            -                      -  %                            -                      -  %
Total below investment grade                       693                    4.3  %                          884                    5.6  %
Total AFS ABS including related parties      $  16,287                  100.0  %             $         15,983                  100.0  %



As of December 31, 2022 and 2021, a substantial majority of our AFS ABS
portfolio, 95.7% and 94.7%, respectively, was invested in assets considered to
be investment grade based upon application of the NAIC's methodology while 95.7%
and 94.4%, respectively, of securities were considered investment grade based on
NRSRO ratings.
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Collateralized Loan Obligations - We also invest in CLOs which pay principal and
interest from cash flows received from underlying corporate loans. These
holdings were $19.6 billion and $16.2 billion as of December 31, 2022 and 2021,
respectively.

A summary of our AFS CLO portfolio, including related parties, by NAIC
designations and NRSRO quality ratings is as follows:

                                                          Successor                                         Predecessor
                                                      December 31, 2022                                  December 31, 2021
(In millions, except percentages)             Fair Value        Percent of Total                 Fair Value            Percent of Total
NAIC designation
1 A-G                                        $  12,483                   63.8  %             $          9,957                   61.5  %
2 A-C                                            6,955                   35.5  %                        6,096                   37.6  %
Total investment grade                          19,438                   99.3  %                       16,053                   99.1  %
3 A-C                                              116                    0.6  %                          124                    0.8  %
4 A-C                                               18                    0.1  %                           24                    0.1  %
5 A-C                                                -                      -  %                            -                      -  %
6                                                    -                      -  %                            -                      -  %
Total below investment grade                       134                    0.7  %                          148                    0.9  %
Total AFS CLO including related parties      $  19,572                  100.0  %             $         16,201                  100.0  %

NRSRO rating agency designation
AAA/AA/A                                     $  12,483                   63.8  %             $          9,943                   61.4  %
BBB                                              6,955                   35.5  %                        6,101                   37.6  %
Non-rated                                            -                      -  %                            -                      -  %
Total investment grade                          19,438                   99.3  %                       16,044                   99.0  %
BB                                                 116                    0.6  %                          130                    0.8  %
B                                                   18                    0.1  %                           27                    0.2  %
CCC                                                  -                      -  %                            -                      -  %
CC and lower                                         -                      -  %                            -                      -  %
Non-rated                                            -                      -  %                            -                      -  %
Total below investment grade                       134                    0.7  %                          157                    1.0  %
Total AFS CLO including related parties      $  19,572                  100.0  %             $         16,201                  100.0  %



As of December 31, 2022 and 2021, 99.3% and 99.1%, respectively, of our AFS CLO
portfolio was invested in assets considered to be investment grade based upon
application of the NAIC's methodology. The increase in our CLO portfolio was
mainly driven by the deployment of strong organic inflows in the current year,
partially offset by unrealized losses attributed to an increase in US Treasury
rates and credit spread widening.

Commercial Mortgage-backed Securities - A portion of our AFS portfolio is
invested in CMBS which are constructed from pools of commercial mortgages. These
holdings were $4.2 billion and $2.8 billion as of December 31, 2022 and 2021,
respectively. As of December 31, 2022 and 2021, our CMBS portfolio included $3.8
billion (92% of the total) and $2.0 billion (74% of the total), respectively, of
securities that are considered investment grade based on NAIC designations,
while $3.5 billion (83% of the total) and $2.1 billion (75% of the total),
respectively, of securities were considered investment grade based on NRSRO
ratings.
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Residential Mortgage-backed Securities - A portion of our AFS portfolio is
invested in RMBS, which are securities constructed from pools of residential
mortgages. These holdings were $5.9 billion and $6.0 billion as of December 31,
2022 and 2021, respectively.

A summary of our AFS RMBS portfolio by NAIC designations and NRSRO quality
ratings is as follows:

                                                          Successor                                         Predecessor
                                                      December 31, 2022                                  December 31, 2021
(In millions, except percentages)             Fair Value        Percent of Total                 Fair Value            Percent of Total
NAIC designation
1 A-G                                        $   5,069                   85.7  %             $          5,097                   85.4  %
2 A-C                                              286                    4.8  %                          331                    5.5  %
Total investment grade                           5,355                   90.5  %                        5,428                   90.9  %
3 A-C                                              304                    5.2  %                          327                    5.5  %
4 A-C                                              185                    3.1  %                          172                    2.9  %
5 A-C                                               67                    1.1  %                           29                    0.5  %
6                                                    3                    0.1  %                           14                    0.2  %
Total below investment grade                       559                    9.5  %                          542                    9.1  %
Total AFS RMBS                               $   5,914                  100.0  %             $          5,970                  100.0  %

NRSRO rating agency designation
AAA/AA/A                                     $   1,904                   32.2  %             $          1,110                   18.6  %
BBB                                                679                   11.5  %                          522                    8.7  %
Non-rated1                                       1,301                   22.0  %                        1,648                   27.6  %
Total investment grade                           3,884                   65.7  %                        3,280                   54.9  %
BB                                                  97                    1.6  %                          184                    3.1  %
B                                                  112                    1.9  %                          193                    3.2  %
CCC                                                960                   16.2  %                        1,281                   21.5  %
CC and lower                                       542                    9.2  %                          733                   12.3  %
Non-rated1                                         319                    5.4  %                          299                    5.0  %
Total below investment grade                     2,030                   34.3  %                        2,690                   45.1  %
Total AFS RMBS                               $   5,914                  100.0  %             $          5,970                  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 designations. The NAIC designation methodology differs in significant respects from the NRSRO rating methodology.

A significant majority of our RMBS portfolio, 90.5% and 90.9% as of December 31,
2022 and 2021, respectively, was invested in assets considered to be investment
grade based upon an application of the NAIC designations. The NAIC's methodology
with respect to RMBS gives explicit effect to the amortized cost at which an
insurance company carries each such investment. Because we invested in RMBS
after the stresses related to US housing had caused significant downward
pressure on prices of RMBS, we carry most of our investments in RMBS at
significant discounts to par value, which results in an investment grade NAIC
designation. In contrast, our understanding is that in setting ratings, NRSROs
focus on the likelihood of recovering all contractual payments including
principal at par value. As a result of a fundamental difference in approach,
NRSRO characterized 65.7% and 54.9% of our RMBS portfolio as investment grade as
of December 31, 2022 and 2021, respectively.

Unrealized Losses

Our investments in AFS securities, including related parties, are reported at
fair value with changes in fair value recorded in other comprehensive income.
Certain of our AFS securities, including related parties, have experienced
declines in fair value that we consider temporary in nature. These investments
are held to support our product liabilities, and we currently have the intent
and ability to hold these securities until recovery of the amortized cost basis
prior to sale or maturity. As of December 31, 2022, our AFS securities,
including related parties, had a fair value of $112.2 billion, which was 14.6%
below amortized cost of $131.4 billion. As of December 31, 2021, our AFS
securities, including related parties, had a fair value of $110.6 billion, which
was 3.5% above amortized cost of $106.9 billion. Our fair value of AFS
securities as of December 31, 2022 was below amortized cost, as the investment
portfolio was marked to fair value on January 1, 2022 in conjunction with
purchase accounting, with subsequent losses driven by the increase in US
Treasury rates and credit spread widening experienced in the current year.
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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The following tables reflect the unrealized losses on the AFS portfolio,
including related parties, for which an allowance for credit losses has not been
recorded, by NAIC designations:

                                                                                              Successor
                                                                                          December 31, 2022
                               Amortized Cost of           Gross             Fair Value of AFS          Fair Value to          Fair Value of         Gross Unrealized
                                AFS Securities           Unrealized           Securities with          Amortized Cost            Total AFS           Losses to Total
(In millions, except            with Unrealized            Losses             Unrealized Loss               Ratio               Securities            AFS Fair Value
percentages)                         Loss
NAIC designation
1 A-G                          $       58,030          $    (8,959)         $         49,071                    84.6  %       $     58,470                    (15.3) %
2 A-C                                  54,616               (9,035)                   45,581                    83.5  %             49,067                    (18.4) %
Total investment grade                112,646              (17,994)                   94,652                    84.0  %            107,537                    (16.7) %
3 A-C                                   3,222                 (455)                    2,767                    85.9  %              3,302                    (13.8) %
4 A-C                                     742                 (101)                      641                    86.4  %                925                    (10.9) %
5 A-C                                     134                  (25)                      109                    81.3  %                190                    (13.2) %
6                                         180                  (18)                      162                    90.0  %                271                     (6.6) %
Total below investment grade            4,278                 (599)                    3,679                    86.0  %              4,688                    (12.8) %
Total                          $      116,924          $   (18,593)         $         98,331                    84.1  %       $    112,225                    (16.6) %



                                                                                               Predecessor
                                                                                            December 31, 2021
                                Amortized Cost of        Gross Unrealized        Fair Value of AFS          Fair Value to          Fair Value of         Gross Unrealized
(In millions, except           AFS Securities with            Losses              Securities with          Amortized Cost            Total AFS           Losses to Total
percentages)                     Unrealized Loss                                  Unrealized Loss               Ratio               Securities            AFS Fair Value
NAIC designation
1 A-G                          $         19,369          $        (338)         $         19,031                    98.3  %       $     51,514                     (0.7) %
2 A-C                                    20,849                   (475)                   20,374                    97.7  %             53,398                     (0.9) %
Total investment grade                   40,218                   (813)                   39,405                    98.0  %            104,912                     (0.8) %
3 A-C                                     1,494                    (82)                    1,412                    94.5  %              4,247                     (1.9) %
4 A-C                                       410                    (26)                      384                    93.7  %              1,100                     (2.4) %
5 A-C                                        41                     (6)                       35                    85.4  %                 88                     (6.8) %
6                                            61                    (14)                       47                    77.0  %                214                     (6.5) %
Total below investment grade              2,006                   (128)                    1,878                    93.6  %              5,649                     (2.3) %
Total                          $         42,224          $        (941)         $         41,283                    97.8  %       $    110,561                     (0.9) %



The gross unrealized losses on AFS securities, including related parties, were
$18.6 billion and $941 million as of December 31, 2022 and 2021, respectively.
The increase in unrealized losses on AFS securities was driven by the increase
in US Treasury rates and credit spread widening experienced in the current year.

Provision for Credit Losses

For our credit loss accounting policies and the assumptions used in the
allowances, see Note 1 - Business, Basis of Presentation and Significant
Accounting Policies and Note 3 - Investments to the consolidated financial
statements.

As of December 31, 2022 and 2021, we held an allowance for credit losses on AFS
securities of $459 million and $123 million, respectively. As a result of
purchase accounting, we removed our existing CECL allowance and established a
new allowance of $311 million related to purchased credit deteriorated (PCD)
securities due to having marked our assets to fair value at the January 1, 2022
merger date. During the year ended December 31, 2022, we recorded an increase in
provision for credit losses on AFS securities of $148 million, of which $171
million had an income statement impact and $(23) million were related to PCD
securities and other changes. The increase in the allowance for credit losses on
AFS securities was mainly due to unfavorable economics, including impacts from
the conflict between Russia and Ukraine and exposure to China's real estate
market. During the year ended December 31, 2021, we recorded an increase in
provision for credit losses on AFS securities of $19 million, of which $9
million had an income statement impact and $10 million were related to PCD
securities and other changes. The intent-to-sell impairments for the years ended
December 31, 2022 and 2021 were $51 million and $4 million, respectively.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

International Exposure

A portion of our AFS securities are invested in securities with international
exposure. As of December 31, 2022 and 2021, 36% and 35%, respectively, of the
carrying value of our AFS securities, including related parties, was comprised
of securities of issuers based outside of the United States and debt securities
of foreign governments. These securities are either denominated in US dollars or
do not expose us to significant foreign currency risk as a result of foreign
currency swap arrangements.

The following table presents our international exposure in our AFS portfolio,
including related parties, by country or region of issuance:

                                                        Successor                                                         Predecessor
                                                    December 31, 2022                                                  December 31, 2021
                                   Amortized           Fair Value           Percent of                Amortized           Fair Value           Percent of
(In millions, except percentages)     Cost                                    Total                      Cost                                    Total
Country
Ireland                           $   6,023          $     5,326                 13.3  %             $   5,172          $     5,052                 13.0  %
Other Europe                         11,062                8,899                 22.1  %                 8,864                9,218                 23.7  %
Total Europe                         17,085               14,225                 35.4  %                14,036               14,270                 36.7  %
Non-US North America                 20,599               18,936                 47.1  %                17,218               17,387                 44.8  %
Australia & New Zealand               2,933                2,494                  6.2  %                 2,441                2,557                  6.6  %
Central & South America               1,704                1,443                  3.6  %                 1,347                1,346                  3.5  %
Africa & Middle East                  2,253                1,900                  4.7  %                 1,966                2,019                  5.2  %
Asia/Pacific                          1,535                1,192                  3.0  %                 1,256                1,262                  3.2  %

Total                             $  46,109          $    40,190                100.0  %             $  38,264          $    38,841                100.0  %



Approximately 97.3% and 96.7% of these securities are investment grade by NAIC
designation as of December 31, 2022 and 2021, respectively. As of December 31,
2022, 11% of our AFS securities, including related parties, were invested in
CLOs of Cayman Islands issuers (included in Non-US North America) for which
underlying investments are largely loans to US issuers, and 25% were invested in
securities of other non-US issuers.

The majority of our investments in Ireland are comprised of Euro denominated
CLOs, for which the SPV is domiciled in Ireland, but the underlying leveraged
loans involve borrowers from the broader European region.

As of December 31, 2022, we held Russian AFS securities of $42 million,
including related parties. Our investment managers analyze each holding for
credit risk by economic and other factors of each country and industry.

Trading Securities

Trading securities, including related parties and VIEs, were $3.5 billion and
$3.8 billion as of December 31, 2022 and 2021, respectively. Trading securities
are primarily comprised of AmerUs Closed Block securities for which we have
elected the fair value option valuation, CLO and ABS equity tranche securities,
structured securities with embedded derivatives, investments which support
various reinsurance arrangements and MidCap profit participating notes prior to
the contribution of the notes to AAA during the second quarter of 2022. The
decrease in trading securities was primarily driven by the contribution of our
MidCap profit participating notes and PK AirFinance subordinated notes to AAA
during the second quarter of 2022 as well as losses caused by an increase in US
Treasury rates and credit spread widening, partially offset by the consolidation
of additional VIEs.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Mortgage Loans

The following is a summary of our mortgage loan portfolio by collateral type,
including assets held by related parties and consolidated VIEs:

                                                          Successor                                         Predecessor
                                                      December 31, 2022                                  December 31, 2021
                                                                                                Net Carrying
(In millions, except percentages)             Fair Value         Percent of Total                  Value             Percent of Total
Property type
Office building                              $    4,651                   15.1  %             $       4,870                   20.1  %
Retail                                            1,454                    4.7  %                     2,022                    8.4  %
Apartment                                         6,692                   21.7  %                     4,626                   19.2  %
Hotels                                            1,855                    6.1  %                     1,727                    7.2  %
Industrial                                        2,047                    6.6  %                     2,336                    9.7  %
Other commercial1                                 3,409                   11.1  %                     1,316                    5.4  %
Total net commercial mortgage loans              20,108                   65.3  %                    16,897                   70.0  %
Residential loans                                10,703                   34.7  %                     7,251                   30.0  %
Total mortgage loans, including related
parties and VIEs                             $   30,811                  100.0  %             $      24,148                  100.0  %

1 Other commercial loans include investments in nursing homes, other healthcare institutions, parking garages, storage facilities and
other commercial properties.

We invest a portion of our investment portfolio in mortgage loans, which are
generally comprised of high quality commercial first lien and mezzanine real
estate loans. Our mortgage loan holdings, including related parties and
consolidated VIEs, were $30.8 billion and $24.1 billion as of December 31, 2022
and 2021, respectively. This included $1.7 billion and $1.9 billion of mezzanine
mortgage loans as of December 31, 2022 and 2021, respectively. We have acquired
mortgage loans through acquisitions and reinsurance arrangements, as well as
through an active program to invest in new mortgage loans. We invest in CMLs on
income producing properties including hotels, apartments, retail and office
buildings, and other commercial and industrial properties. Our RML portfolio
primarily consists of first lien RMLs collateralized by properties located in
the US. Loan-to-value ratios at the time of loan approval are generally 75% or
less.

In connection with the merger, we elected the fair value option on our mortgage
loan portfolio; therefore, we no longer have an allowance for credit losses for
commercial and residential loans. Interest income is accrued on the principal
amount of the loan based on the loan's contractual interest rate. Interest
income and prepayment fees are reported in net investment income on the
consolidated statements of income (loss). Changes in the fair value of the
mortgage loan portfolio are reported in investment related gains (losses) on the
consolidated statements of income (loss).

It is our policy to cease to accrue interest on loans that are over 90 days
delinquent. For loans less than 90 days delinquent, interest is accrued unless
it is determined that the accrued interest is not collectible. If a loan becomes
over 90 days delinquent, it is our general policy to initiate foreclosure
proceedings unless a workout arrangement to bring the loan current is in place.
As of December 31, 2022 and 2021, we had $474 million and $990 million,
respectively, of mortgage loans that were 90 days past due, of which $99 million
and $54 million, respectively, were in the process of foreclosure. As of
December 31, 2022 and 2021, $221 million and $856 million of mortgage loans that
were 90 days past due were related to Government National Mortgage Association
(GNMA) early buyouts that are fully or partially guaranteed and are accruing
interest.

Investment Funds

Our investment funds investment strategy primarily focuses on funds with core
holdings of strategic origination and insurance platforms and equity, hybrid,
yield and other funds. Our investment funds generally meet the definition of a
VIE, and in certain cases these investment funds are consolidated in our
financial statements because we meet the criteria of the primary beneficiary.
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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The following table illustrates our investment funds, including related parties
and consolidated VIEs:

                                                          Successor                                           Predecessor
                                                      December 31, 2022                                   December 31, 20211
                                               Carrying
(In millions, except percentages)                Value           Percent of Total                Carrying Value          Percent of Total
Investment funds

Equity                                       $       46                    0.3  %             $             410                    4.2  %
Hybrid                                               32                    0.2  %                           667                    6.7  %
Yield                                                 -                      -  %                            99                    1.0  %
Other                                                 1                      -  %                             2                      -  %
Total investment funds                               79                    0.5  %                         1,178                   11.9  %
Investment funds - related parties
Strategic origination platforms                      34                    0.2  %                         1,338                   13.6  %
Strategic insurance platforms                     1,259                    8.9  %                         1,440                   14.6  %
Apollo and other fund investments
Equity                                              246                    1.8  %                         1,199                   12.1  %
Hybrid                                                -                      -  %                           952                    9.6  %
Yield                                                 5                      -  %                           305                    3.1  %
Other2                                               25                    0.2  %                         2,157                   21.9  %
Total investment funds - related parties          1,569                   11.1  %                         7,391                   74.9  %
Investment funds owned by consolidated VIEs
Strategic origination platforms                   4,829                   34.2  %                           264                    2.7  %
Strategic insurance platforms                       529                    3.8  %                             -                      -  %
Apollo and other fund investments
Equity                                            2,640                   18.7  %                           229                    2.3  %
Hybrid                                            3,112                   22.0  %                            56                    0.6  %
Yield                                             1,044                    7.4  %                           748                    7.6  %
Other                                               326                    2.3  %                             -                      -  %
Total investment funds owned by consolidated
VIEs                                             12,480                   88.4  %                         1,297                   13.2  %
Total investment funds, including related
parties and VIEs                             $   14,128                  100.0  %             $           9,866                  100.0  %

Note: During 2022, we contributed the majority of our investment funds to AAA, which we consolidate as a VIE. See Note 14 - Related
Parties for further information on AAA.
1 Certain reclassifications have been made to conform with current year presentation.
2 Includes our investment in Apollo held as of December 31, 2021.



Overall, the total investment funds, including related parties and consolidated
VIEs, were $14.1 billion and $9.9 billion as of December 31, 2022 and 2021,
respectively. See Note 3 - Investments to the consolidated financial statements
for further discussion regarding how we account for our investment funds. Our
investment fund portfolio is subject to a number of market-related risks
including interest rate risk and equity market risk. Interest rate risk
represents the potential for changes in the investment fund's net asset values
resulting from changes in the general level of interest rates. Equity market
risk represents potential for changes in the investment fund's net asset values
resulting from changes in equity markets or from other external factors which
influence equity markets. These risks expose us to potential volatility in our
earnings period-over-period. We actively monitor our exposure to these risks.
The increase in investment funds, including related parties and consolidated
VIEs, was primarily driven by the consolidation of additional VIEs in
conjunction with our merger with Apollo, the deployment of organic inflows,
contributions from third-party investors into AAA, a consolidated VIE, and the
increase in valuation of several funds, partially offset by the distribution of
our $2.1 billion investment in Apollo to AGM following the merger.

Funds Withheld at Interest

Funds withheld at interest represent 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. Generally, assets equal
to statutory reserves are withheld and legally owned by the ceding company. We
hold funds withheld at interest receivables, including those held with VIAC,
Lincoln and Jackson. As of December 31, 2022, the majority of the ceding
companies holding the assets pursuant to such reinsurance agreements had a
financial strength rating of A or better (based on an A.M. Best scale).

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The funds withheld at interest is comprised of the host contract and an embedded
derivative. We are subject to the investment performance on the withheld assets
with the total return directly impacting the host contract and the embedded
derivative. Interest accrues at a risk-free rate on the host receivable and is
recorded as net investment income in the consolidated statements of income
(loss). The embedded derivative in our reinsurance agreements is similar to a
total return swap on the income generated by the underlying assets held by the
ceding companies. The change in the embedded derivative is recorded in
investment related gains (losses). Although we do not legally own the underlying
investments in the funds withheld at interest, in each instance the ceding
company has hired Apollo to manage the withheld assets in accordance with our
investment guidelines.

The following summarizes the underlying investment composition of the funds
withheld at interest, including related parties:

                                                          Successor                                         Predecessor
                                                      December 31, 2022                                  December 31, 2021
                                               Carrying
(In millions, except percentages)               Value           Percent of Total               Carrying Value          Percent of Total
Fixed maturity securities
US government and agencies                   $       -                      -  %             $             50                    0.1  %
US state, municipal and political
subdivisions                                       263                    0.6  %                          338                    0.6  %
Foreign governments                                401                    1.0  %                          553                    1.0  %
Corporate                                       19,944                   46.7  %                       26,143                   46.5  %
CLO                                              3,875                    9.1  %                        5,322                    9.5  %
ABS                                              5,977                   14.0  %                        7,951                   14.2  %
CMBS                                             1,122                    2.6  %                        1,661                    3.0  %
RMBS                                             1,138                    2.7  %                        1,586                    2.8  %
Equity securities                                  373                    0.9  %                          243                    0.4  %
Mortgage loans                                   8,025                   18.8  %                        9,437                   16.8  %
Investment funds                                 1,126                    2.6  %                        1,807                    3.2  %
Derivative assets                                  141                    0.3  %                          208                    0.4  %
Short-term investments                             184                    0.4  %                           54                    0.1  %

Cash and cash equivalents                          557                    1.3  %                        1,049                    1.9  %
Other assets and liabilities                      (438)                  (1.0) %                         (288)                  (0.5) %
Total funds withheld at interest including
related parties                              $  42,688                  100.0  %             $         56,114                  100.0  %



As of December 31, 2022 and 2021, we held $42.7 billion and $56.1 billion,
respectively, of funds withheld at interest receivables, including related
parties. Approximately 94.3% and 93.5% of the fixed maturity securities within
the funds withheld at interest are investment grade by NAIC designation as of
December 31, 2022 and 2021, respectively. The decrease in funds withheld at
interest, including related parties, was primarily driven by run-off of the
underlying blocks of business and unrealized losses during the year ended
December 31, 2022 attributed to an increase in US Treasury rates and credit
spread widening.

Derivative Instruments

We hold derivative instruments for economic hedging purposes to reduce our
exposure to cash flow variability of assets and liabilities, equity market risk,
interest rate risk, credit risk and foreign exchange risk. The types of
derivatives we may use include interest rate swaps, foreign currency swaps and
forward contracts, total return swaps, credit default swaps, variance swaps,
futures and equity options.

A discussion regarding our derivative instruments and how such instruments are
used to manage risk is included in Note 4 - Derivative Instruments to the
consolidated financial statements.

As part of our risk management strategies, management continually evaluates our
derivative instrument holdings and the effectiveness of such holdings in
addressing risks identified in our operations.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Net Invested Assets

The following summarizes our net invested assets:

                                                           Successor                                          Predecessor
                                                       December 31, 2022                                   December 31, 2021
                                              Net Invested         Percent of Total               Net Invested          Percent of Total
(In millions, except percentages)             Asset Value1                                        Asset Value1
Corporate                                    $     80,800                   41.1  %             $       75,163                   42.9  %
CLO                                                19,881                   10.1  %                     17,892                   10.2  %
Credit                                            100,681                   51.2  %                     93,055                   53.1  %
CML                                                23,750                   12.1  %                     21,438                   12.2  %
RML                                                11,147                    5.7  %                      7,116                    4.1  %
RMBS                                                7,363                    3.7  %                      6,969                    4.0  %
CMBS                                                4,495                    2.3  %                      3,440                    2.0  %

Real estate                                        46,755                   23.8  %                     38,963                   22.3  %
ABS                                                20,680                   10.5  %                     20,376                   11.6  %
Alternative investments                            12,079                    6.1  %                      9,873                    5.6  %
State, municipal, political subdivisions and
foreign government                                  2,715                    1.4  %                      2,505                    1.4  %

Equity securities                                   1,737                    0.9  %                        754                    0.4  %
Short-term investments                              1,930                    1.0  %                        111                    0.1  %
US government and agencies                          2,691                    1.4  %                        212                    0.1  %
Other investments                                  41,832                   21.3  %                     33,831                   19.2  %
Cash and equivalents2                               5,481                    2.8  %                      6,116                    3.5  %
Policy loans and other2                             1,702                    0.9  %                      1,266                    0.7  %
Net invested assets excluding investment in
Apollo                                            196,451                  100.0  %                    173,231                   98.8  %
Investment in Apollo                                    -                      -  %                      2,112                    1.2  %
Net invested assets                          $    196,451                  100.0  %             $      175,343                  100.0  %

1 See Key Operating and Non-GAAP Measures for the definition of net invested assets.
2 Prior period has been updated to reflect a reclassification between line items for comparability.

Our net invested assets were $196.5 billion and $175.3 billion as of
December 31, 2022 and 2021, respectively. As of December 31, 2022, corporate
securities included $24.9 billion of private placements, which represented 12.7%
of our net invested assets. The increase in net invested assets as of
December 31, 2022 from 2021 was primarily driven by growth from net organic
inflows of $39.2 billion in excess of net liability outflows of $23.7 billion,
purchase accounting adjustments resulting in an increase in book value as our
investment portfolio was marked up to fair value, reinvestment of earnings, an
increase in short-term investments related to the issuance of a reverse
repurchase agreement, an increase in valuation of several alternative
investments and the deployment of proceeds from the issuances of preferred stock
and debt, partially offset by the distribution of our $2.1 billion investment in
Apollo to AGM following the merger.

In managing our business, we utilize net invested assets as presented in the
above table. Net invested assets do not correspond to total investments,
including related parties, on our consolidated balance sheets, as discussed
previously in Key Operating and Non-GAAP Measures. Net invested assets represent
the investments that directly back our net reserve liabilities and surplus
assets. We believe this view of our portfolio provides a view of the assets for
which we have economic exposure. 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. We also adjust for VIEs to show the net investment in the funds,
which are included in the alternative investments line above as well as
adjusting for the allowance for credit losses. Net invested assets includes our
proportionate share of ACRA investments, based on our economic ownership, but
excludes the proportionate share of investments associated with the
noncontrolling interest.

Net invested assets is utilized by management to evaluate our investment
portfolio. Net invested assets is used in the computation of net investment
earned rate, which allows us to analyze the profitability of our investment
portfolio. Net invested assets is also used in our risk management processes for
asset purchases, product design and underwriting, stress scenarios, liquidity,
and ALM.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Net Alternative Investments

The following summarizes our net alternative investments:

                                                          Successor                                         Predecessor
                                                      December 31, 2022                                  December 31, 20211
                                             Net Invested                                       Net Invested
(In millions, except percentages)             Asset Value        Percent of Total                Asset Value          Percent of Total
Strategic origination platforms
Wheels Donlen                                $      662                    5.5  %             $          590                    6.0  %
Redding Ridge                                       624                    5.2  %                        217                    2.2  %
NNN Lease                                           579                    4.8  %                        637                    6.5  %
MidCap                                              604                    5.0  %                        666                    6.7  %
Foundation Home Loans                               302                    2.5  %                          -                      -  %
PK AirFinance                                       251                    2.1  %                        316                    3.2  %
Aqua Finance                                        267                    2.2  %                          -                      -  %
Other                                               308                    2.5  %                         99                    1.0  %
Total strategic origination platforms             3,597                   29.8  %                      2,525                   25.6  %
Strategic retirement services platforms
Athora                                            1,012                    8.4  %                        743                    7.5  %
Catalina                                            417                    3.4  %                        442                    4.6  %
FWD                                                 400                    3.3  %                        400                    4.1  %
Challenger                                          294                    2.4  %                        232                    2.3  %
Venerable                                           241                    2.0  %                        219                    2.2  %
Other                                                20                    0.2  %                        133                    1.3  %
Total strategic retirement services
platforms                                         2,384                   19.7  %                      2,169                   22.0  %
Apollo and other fund investments
Equity
Real estate                                       1,212                   10.0  %                      1,105                   11.2  %
Traditional private equity                          947                    7.8  %                        689                    7.0  %
Other                                               189                    1.6  %                        309                    3.1  %
Total equity                                      2,348                   19.4  %                      2,103                   21.3  %
Hybrid
Real estate                                       1,289                   10.7  %                        809                    8.2  %
Other                                             1,315                   10.9  %                      1,282                   13.0  %
Total hybrid                                      2,604                   21.6  %                      2,091                   21.2  %
Yield                                               885                    7.3  %                        773                    7.8  %
Total Apollo and other fund investments           5,837                   48.3  %                      4,967                   50.3  %
Other                                               261                    2.2  %                        212                    2.1  %
Net alternative investments                  $   12,079                  100.0  %             $        9,873                  100.0  %

1 Certain reclassifications have been made to conform with current year presentation.

Net alternative investments were $12.1 billion and $9.9 billion as of
December 31, 2022 and 2021, respectively, representing 6.1% and 5.6% of our net
invested assets portfolio as of December 31, 2022 and 2021, respectively. The
increase in net alternative investments was primarily driven by deployment into
alternative investments, including Foundation Home Loans and Aqua Finance, due
to growth in net organic inflows in excess of liability outflows and an increase
in valuation of several alternative investments. As of December 31, 2022, we
have contributed approximately 68% of our net alternative investments to AAA.

Net alternative investments do not correspond to the total investment funds,
including related parties and consolidated VIEs, on our consolidated balance
sheets. As discussed above in the net invested assets section, we adjust the US
GAAP presentation for funds withheld, modco and VIEs. We include CLO and ABS
equity tranche securities in alternative investments due to their underlying
characteristics and equity-like features.


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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Through our relationship with Apollo, we have indirectly invested in companies
that meet the key characteristics we look for in net alternative investments.
Athora, our largest alternative investment, is a strategic investment.

Athora

Athora is a specialized insurance and reinsurance group fully focused on the
European market. Athora's principal operational subsidiaries are Athora
Netherlands N.V. in the Netherlands, Athora Belgium SA in Belgium, Athora
Lebensversicherung AG in Germany, Athora Ireland plc in Ireland, and Athora Life
Re Ltd in Bermuda. Athora deploys capital and resources to further its mission
to build a stand-alone independent and integrated insurance and reinsurance
business. Athora's growth is achieved primarily through acquisitions, portfolio
transfers and reinsurance. Athora is building a European insurance brand and has
successfully acquired, integrated, and transformed multiple insurance companies.

Our alternative investment in Athora had a carrying value of $1.0 billion and
$743 million as of December 31, 2022 and 2021, respectively. Our investment in
Athora represents our proportionate share of its net asset value, which largely
reflects any contributions to and distributions from Athora and changes in its
fair value. Athora returned a net investment earned rate of 13.77%, 10.52% and
15.94% for the years ended December 31, 2022, 2021 and 2020, respectively.
Alternative investment income from Athora was $125 million, $76 million and $66
million for the years ended December 31, 2022, 2021 and 2020, respectively. The
increase in alternative investment income for the year ended December 31, 2022
compared to 2021 was primarily driven by an increase in average NAV as well as
strong performance of the fund in the current year.



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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Non-GAAP Measure Reconciliations

The reconciliation of total net income (loss) available to Athene Holding Ltd.
common shareholder to spread related earnings, is as follows:

                                                         Successor                           Predecessor
                                                         Year Ended                Year Ended           Year Ended
                                                        December 31,              December 31,         December 31,
(In millions)                                               2022                      2021                 2020

Net income (loss) available to Athene Holding Ltd.
common shareholder

                                      $  (4,303)               $     3,718          $     1,446
Preferred stock dividends                                     141                        141                   95
Net income (loss) attributable to noncontrolling
interests                                                  (2,092)                       (59)                 380
Net income (loss)                                          (6,254)                     3,800                1,921
Income tax expense (benefit)                                 (976)                       386                  285
Income (loss) before income taxes                          (7,230)                     4,186                2,206
Realized gains (losses) on sale of AFS securities            (176)                       545                   27
Unrealized, allowances and other investment gains
(losses)1                                                  (3,187)                     1,053                   73
Change in fair value of reinsurance assets                 (4,084)                      (629)                 792
Offsets to investment gains (losses)                          456                         55                 (159)
Investment gains (losses), net of offsets                  (6,991)                     1,024                  733
Non-operating change in insurance liabilities and
related derivatives, net of offsets                          (454)                       692                 (235)
Integration, restructuring and other non-operating
expenses                                                     (133)                      (124)                 (10)
Stock compensation expense2                                   (56)                       (38)                 (25)
Preferred stock dividends                                     141                        141                   95

Noncontrolling interests - pre-tax income (loss) and
VIE adjustments

                                            (2,061)                       (18)                 393

Total adjustments to income (loss) before income taxes (9,554)

            1,677                  951
Spread related earnings                                 $   2,324           

$ 2,509 $ 1,255

1 Unrealized, allowances and other investment gains (losses) was updated to include the change in fair value of
Apollo investment. 2 Stock compensation expense was updated to include our long-term incentive plan expense.

The reconciliation of total AHL shareholders' equity to total adjusted AHL
common shareholder's equity is as follows:

                                                                Successor                        Predecessor
(In millions)                                               December 31, 2022                 December 31, 2021
Total AHL shareholders' equity                            $              916                $           20,130
Less: Preferred stock                                                  3,154                             2,312
Total AHL common shareholder's equity (deficit)                       (2,238)                           17,818
Less: Accumulated other comprehensive income (loss)                  (12,311)                            2,430

Less: Accumulated change in fair value of reinsurance
assets

                                                                (3,046)                              585

Less: Accumulated change in fair value of mortgage loan
assets

                                                                (2,091)                                -
Total adjusted AHL common shareholder's equity            $           15,210                $           14,803



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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The reconciliation of debt to capital ratio to adjusted debt to capital ratio is
as follows:

                                                                 Successor                      Predecessor
(In millions, except percentages)                            December 31, 2022               December 31, 2021
Total debt                                                  $          3,658                $          2,964
Less: Adjustment to arrive at notional debt                              258                             (36)
Notional debt                                               $          3,400                $          3,000

Total debt                                                  $          3,658                $          2,964
Total AHL shareholders' equity                                           916                          20,130
Total capitalization                                                   4,574                          23,094
Less: Accumulated other comprehensive income (loss)                  (12,311)                          2,430

Less: Accumulated change in fair value of reinsurance
assets

                                                                (3,046)                            585

Less: Accumulated change in fair value of mortgage loan
assets

                                                                (2,091)                              -
Less: Adjustment to arrive at notional debt                              258                             (36)
Total adjusted capitalization                               $         21,764                $         20,115

Debt to capital ratio                                                   80.0  %                         12.8  %
Accumulated other comprehensive income (loss)                          (44.7) %                          1.6  %
Accumulated change in fair value of reinsurance assets                 (11.1) %                          0.4  %
Accumulated change in fair value of mortgage loan assets                (7.6) %                            -  %
Adjustment to arrive at notional debt                                   (1.0) %                          0.1  %
Adjusted debt to capital ratio                                          15.6  %                         14.9  %



The reconciliation of net investment income to net investment earnings and
earned rate is as follows:

                                                           Successor                                                       Predecessor
                                                 Year Ended December 31, 2022                  Year Ended December 31, 2021           Year Ended December 31, 2020
(In millions, except percentages)                  Dollar               Rate                    Dollar               Rate               Dollar      

Rate

US GAAP net investment income                  $     7,571               4.01  %             $    7,100               4.44  %       $     4,834               3.64  %
Change in fair value of reinsurance assets             333               0.18  %                  1,451               0.90  %             1,408               1.06  %
VIE earnings and noncontrolling interest               586               0.31  %                    108               0.07  %                46               0.03  %
Alternative gains (losses)                              41               0.02  %                    144               0.09  %              (102)             (0.08) %
ACRA noncontrolling interest                        (1,505)             (0.80) %                   (943)             (0.59) %              (559)             (0.42) %
Reinsurance impacts                                    (41)             (0.02) %                      -                  -  %                 -                  -  %
Apollo investment (gain) loss                          (33)             (0.02) %                   (864)             (0.54) %              (225)             (0.17) %
Held for trading amortization and other                (39)             (0.02) %                     83               0.05  %               (74)             (0.05) %
Total adjustments to arrive at net investment
earnings/earned rate                                  (658)             (0.35) %                    (21)             (0.02) %               494               0.37  %
Total net investment earnings/earned rate      $     6,913               3.66  %             $    7,079               4.42  %       $     5,328               4.01  %

Average net invested assets                    $   188,742                                      160,019                             $   132,750


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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The reconciliation of benefits and expenses to cost of funds is as follows:

                                                           Successor                                                        Predecessor
                                                 Year Ended December 31, 2022                   Year Ended December 31, 2021            Year Ended December 31, 2020
(In millions, except percentages)                  Dollar               Rate                     Dollar               Rate                Dollar               Rate
US GAAP benefits and expenses                  $    14,853               7.87  %             $    22,134               13.83  %       $    12,558               9.46  %
Premiums                                           (11,638)             (6.17) %                 (14,262)              (8.91) %            (5,963)             (4.49) %
Product charges                                       (718)             (0.38) %                    (621)              (0.39) %              (571)             (0.43) %
Other revenues                                          28               0.01  %                     (72)              (0.04) %               (36)             (0.03) %
FIA option costs                                     1,264               0.67  %                   1,125                0.70  %             1,101               0.83  %
Reinsurance impacts                                     17               0.01  %                      49                0.03  %                57               0.04  %
Non-operating change in insurance liabilities
and embedded derivatives, net of offsets               938               0.50  %                  (2,989)              (1.87) %            (2,261)             (1.70) %
DAC and DSI amortization related to investment
gains and losses1                                       64               0.03  %                     115                0.07  %               (95)             (0.07) %
Rider reserves related to investment gains and
losses                                                 379               0.20  %                      (4)                  -  %               (10)             (0.01) %
Policy and other operating expenses, excluding
policy acquisition expenses                         (1,110)             (0.59) %                    (772)              (0.48) %              (533)             (0.40) %

AmerUs Closed Block fair value liability               291               0.15  %                      57                0.04  %              (104)             (0.08) %
ACRA noncontrolling interest                          (530)             (0.28) %                    (759)              (0.47) %              (527)             (0.40) %
Other                                                   59               0.04  %                      (8)              (0.01) %               (41)             (0.03) %
Total adjustments to arrive at cost of funds       (10,956)             (5.81) %                 (18,141)             (11.33) %            (8,983)             (6.77) %
Total cost of funds                            $     3,897               2.06  %             $     3,993                2.50  %       $     3,575               2.69  %

Average net invested assets                    $   188,742                                   $   160,019                              $   132,750

1 Periods prior to the merger include VOBA amortization related to investment gains and losses.

The reconciliation of policy and other operating expenses to other operating
expenses is as follows:

                                                            Successor                              Predecessor
                                                                                        Year Ended            Year Ended
                                                           Year Ended                  December 31,          December 31,
(In millions)                                           December 31, 2022                  2021                  2020
US GAAP policy and other operating expenses             $        1,493                $     1,128          $         893
Interest expense                                                  (227)                      (139)                  (114)
Policy acquisition expenses, net of deferrals                     (383)                      (356)                  (360)
Integration, restructuring and other non-operating
expenses                                                          (133)                      (134)                   (10)
Stock compensation expenses1                                       (56)                       (38)                   (25)
ACRA noncontrolling interest                                      (231)                       (93)                   (58)
Other changes in policy and other operating expenses                 3                         (9)                    (2)

Total adjustments to arrive at other operating expenses (1,027)

                  (769)                  (569)
Other operating expenses                                $          466      

$ 359 $ 324

1 Stock compensation expense was updated to include our long-term incentive plan expense.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The reconciliation of total investments, including related parties, to net
invested assets is as follows:

                                                                 Successor                         Predecessor
(In millions)                                                December 31, 2022                  December 31, 2021
Total investments, including related parties               $           196,448                $          209,176
Derivative assets                                                       (3,309)                           (4,387)
Cash and cash equivalents (including restricted cash)                    8,407                            10,275
Accrued investment income                                                1,328                               962
Net receivable (payable) for collateral on derivatives1                 (1,486)                           (3,902)
Reinsurance funds withheld and modified coinsurance                      1,423                            (1,035)
VIE and VOE assets, liabilities and noncontrolling
interest                                                                12,747                             2,958
Unrealized (gains) losses                                               22,284                            (4,057)
Ceded policy loans                                                        (179)                             (169)
Net investment receivables (payables)1                                     186                                43
Allowance for credit losses                                                471                               361

Other investments                                                          (10)                                -
Total adjustments to arrive at gross invested assets                    41,862                             1,049
Gross invested assets                                                  238,310                           210,225
ACRA noncontrolling interest                                           (41,859)                          (34,882)
Net invested assets                                        $           196,451                $          175,343

1 Prior period has been updated to reflect a reclassification between line items for comparability.

The reconciliation of total investment funds, including related parties and
VIEs, to net alternative investments within net invested assets is as follows:

                                                                  Successor                        Predecessor
(In millions)                                                 December 31, 2022                 December 31, 2021

Investment funds, including related parties and VIEs $ 14,128

                $            9,866
Equity securities1                                                         509                               872
CLO and ABS equities included in trading securities1                       225                             1,418
Investment in Apollo                                                         -                            (2,112)
Investment funds within funds withheld at interest                       1,126                             1,807
Royalties and other assets included in other investments                    15                                50
Net assets of the VIE, excluding investment funds                       (2,041)                             (772)
Unrealized (gains) losses                                                   44                                14
ACRA noncontrolling interest                                            (1,836)                           (1,270)
Other assets                                                               (91)                                -
Total adjustments to arrive at net alternative investments              (2,049)                                7
Net alternative investments                                 $           12,079                $            9,873

1 Prior period has been updated to reflect a reclassification between line items for comparability.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The reconciliation of total liabilities to net reserve liabilities is as
follows:

                                                                 Successor                        Predecessor
(In millions)                                                December 31, 2022                 December 31, 2021
Total liabilities                                          $          243,667                $          212,968

Debt                                                                   (3,658)                           (2,964)

Derivative liabilities                                                 (1,646)                             (472)

Payables for collateral on derivatives and securities to
repurchase

                                                             (3,841)                           (6,446)
Other liabilities                                                      (1,635)                           (2,975)
Liabilities of consolidated VIEs                                         (815)                             (461)
Reinsurance impacts                                                    (9,186)                           (4,594)
Policy loans ceded                                                       (179)                             (169)
ACRA noncontrolling interest                                          (38,382)                          (32,933)

Other                                                                       1                                (3)
Total adjustments to arrive at net reserve liabilities                (59,341)                          (51,017)
Net reserve liabilities                                    $          184,326                $          161,951

Liquidity and Capital Resources

There are two forms of liquidity relevant to our business, funding liquidity and
balance sheet liquidity. Funding liquidity relates to the ability to fund
operations. Balance sheet liquidity relates to our ability to liquidate or
rebalance our balance sheet without incurring significant costs from fees,
bid-offer spreads, or market impact. We manage our liquidity position by
matching projected cash demands with adequate sources of cash and other liquid
assets. Our principal sources of liquidity, in the ordinary course of business,
are operating cash flows and holdings of cash, cash equivalents and other
readily marketable assets.

Our investment portfolio is structured to ensure a strong liquidity position
over time in order to permit timely payment of policy and contract benefits
without requiring asset sales at inopportune times or at depressed prices. In
general, liquid assets include cash and cash equivalents, highly rated corporate
bonds, unaffiliated preferred stock and public common stock, all of which
generally have liquid markets with a large number of buyers. The carrying value
of these assets, excluding assets within modified coinsurance and funds withheld
portfolios, as of December 31, 2022 was $94.5 billion. Assets included in
modified coinsurance and funds withheld portfolios are available to fund the
benefits for the associated obligations but are restricted from other uses. The
carrying value of the underlying assets in these modified coinsurance and funds
withheld portfolios that we consider liquid as of December 31, 2022 was $21.5
billion. Although our investment portfolio does contain assets that are
generally considered illiquid for liquidity monitoring purposes (primarily
mortgage loans, policy loans, real estate, investment funds, and affiliated
common stock), there is some ability to raise cash from these assets if needed.
In periods of economic downturn, we may maintain higher cash balances than
required to manage our liquidity risk and to take advantage of market
dislocations as they arise. We have access to additional liquidity through our
$1.25 billion Credit Facility, with potential increases up to $1.75 billion. The
Credit Facility was undrawn as of December 31, 2022 and had a remaining term of
more than one year, subject to up to two one-year extensions. Additionally,
during 2022, we entered into a revolving Liquidity Facility that has a borrowing
capacity of $2.5 billion, with potential increases up to $3.0 billion. The
Liquidity Facility was undrawn as of December 31, 2022 and has a 364-day term,
subject to additional 364-day extensions. On February 7, 2023, we borrowed
$1.0 billion from the Liquidity Facility for short-term cash flow needs. We also
have access to $2.0 billion of committed repurchase facilities. Our registration
statement on Form S-3 ASR (Shelf Registration Statement) provides us access to
the capital markets, subject to market conditions and other factors. We are also
the counterparty to repurchase agreements with several different financial
institutions, pursuant to which we may obtain short-term liquidity, to the
extent available. In addition, through our membership in the FHLB, we are
eligible to borrow under variable rate short-term federal funds arrangements to
provide additional liquidity.

We proactively manage our liquidity position to meet cash needs while minimizing
adverse impacts on investment returns. We analyze our cash-flow liquidity over
the upcoming 12 months by modeling potential demands on liquidity under a
variety of scenarios, taking into account the provisions of our policies and
contracts in force, our cash flow position, and the volume of cash and readily
marketable securities in our portfolio.

Liquidity risk is monitored, managed and mitigated through a number of stress
tests and analyses to assess our ability to meet our cash flow requirements, as
well as the ability of our reinsurance and insurance subsidiaries to meet their
collateral obligations, under various stress scenarios. We further seek to
mitigate liquidity risk by maintaining access to alternative, external sources
of liquidity as described below.

Our liquidity risk management framework is codified in the company's Liquidity
Risk Policy that is reviewed and approved by our board of directors.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Insurance Subsidiaries' Liquidity

Operations

The primary cash flow sources for our insurance subsidiaries include retirement
services product inflows (premiums and deposits), investment income, principal
repayments on our investments, net transfers from separate accounts and
financial product inflows. Uses of cash include investment purchases, payments
to policyholders for surrenders, withdrawals and payout benefits, interest and
principal payments on funding agreements, payments to satisfy pension group
annuity obligations, policy acquisition costs and general operating costs.

Our policyholder obligations are generally long-term in nature. However,
policyholders may elect to withdraw some, or all, of their account value in
amounts that exceed our estimates and assumptions over the life of an annuity
contract. We include provisions within our annuity policies, such as surrender
charges and MVAs, which are intended to protect us from early withdrawals. As of
December 31, 2022 and 2021, approximately 76% and 74%, respectively, of our
deferred annuity liabilities were subject to penalty upon surrender. In
addition, as of December 31, 2022 and 2021, approximately 60% and 54%,
respectively, of policies contained MVAs that may also have the effect of
limiting early withdrawals if interest rates increase, but may encourage early
withdrawals by effectively subsidizing a portion of surrender charges when
interest rates decrease. As of December 31, 2022, approximately 29% of our net
reserve liabilities were generally non-surrenderable, including funding
agreements, group annuities and payout annuities, while 53% were subject to
penalty upon surrender.

Membership in Federal Home Loan Bank

Through our membership in the FHLB, we are eligible to borrow under variable
rate short-term federal funds arrangements to provide additional liquidity. The
borrowings must be secured by eligible collateral such as mortgage loans,
eligible CMBS or RMBS, government or agency securities and guaranteed loans. As
of December 31, 2022 and 2021, we had no outstanding borrowings under these
arrangements.

We have issued funding agreements to the FHLB. These funding agreements were
issued in an investment spread strategy, consistent with other investment spread
operations. As of December 31, 2022 and 2021, we had funding agreements
outstanding with the FHLB in the aggregate principal amount of $3.7 billion and
$2.8 billion, respectively.

The maximum FHLB indebtedness by a member is determined by the amount of
collateral pledged and cannot exceed a specified percentage of the member's
total statutory assets dependent on the internal credit rating assigned to the
member by the FHLB. As of December 31, 2022, the total maximum borrowing
capacity under the FHLB facilities were limited to $52.4 billion. However, our
ability to borrow under the facilities is constrained by the availability of
assets that qualify as eligible collateral under the facilities and certain
other limitations. Considering these limitations, as of December 31, 2022, we
had the ability to draw up to an estimated $5.8 billion, inclusive of borrowings
then outstanding. This estimate is based on our internal analysis and
assumptions and may not accurately measure collateral which is ultimately
acceptable to the FHLB.

Securities Repurchase Agreements

We engage in repurchase transactions whereby we sell fixed income securities to
third parties, primarily major brokerage firms or commercial banks, with a
concurrent agreement to repurchase such securities at a determined future date.
We require that, at all times during the term of the repurchase agreements, we
maintain sufficient cash or other liquid assets sufficient to allow us to fund
substantially all of the repurchase price. Proceeds received from the sale of
securities pursuant to these arrangements are generally invested in short-term
investments, with the offsetting obligation to repurchase the security included
within payables for collateral on derivatives and securities to repurchase on
the consolidated balance sheets. As per the terms of the repurchase agreements,
we monitor the market value of the securities sold and may be required to
deliver additional collateral (which may be in the form of cash or additional
securities) to the extent that the value of the securities sold decreases prior
to the repurchase date.

As of December 31, 2022 and 2021, the payables for repurchase agreements were
$4.7 billion and $3.1 billion, respectively, while the fair value of securities
and collateral held by counterparties backing the repurchase agreements was $5.0
billion and $3.2 billion, respectively. As of December 31, 2022, payables for
repurchase agreements were comprised of $1.9 billion of short-term and $2.9
billion of long-term repurchase agreements. As of December 31, 2021, payables
for repurchase agreements were comprised of $2.5 billion of short-term and $598
million of long-term repurchase agreements.

We have a $1.0 billion committed repurchase facility with BNP Paribas. The
facility has an initial commitment period of 12 months and automatically renews
for successive 12-month periods until terminated by either party. During the
commitment period, we may sell and BNP Paribas is required to purchase eligible
investment grade corporate bonds pursuant to repurchase transactions at
pre-agreed discounts in exchange for a commitment fee. As of December 31, 2022,
we had no outstanding payables under this facility.

We have a $1.0 billion committed repurchase facility with Societe Generale. The
facility has a commitment term of 5 years, however, either party may terminate
the facility upon 24-months' notice, in which case the facility will end upon
the earlier of (1) such designated termination date, or (2) July 26, 2026.
During the commitment period, we may sell and Societe Generale is required to
purchase eligible investment grade corporate bonds pursuant to repurchase
transactions at pre-agreed rates in exchange for an ongoing commitment fee for
the facility. As of December 31, 2022, we had no outstanding payables under this
facility.
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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Cash Flows

Our cash flows were as follows:

                                                        Successor                               Predecessor
                                                                                     Year Ended            Year Ended
                                                        Year Ended                  December 31,          December 31,
(In millions)                                       December 31, 2022                   2021                  2020
Net income (loss)                                   $        (6,254)               $      3,800          $      1,921
Payment at inception or recapture of reinsurance
agreements, net                                                   -                           -                  (723)
Non-cash revenues and expenses                               12,512                       6,492                 2,956
Net cash provided by operating activities                     6,258                      10,292                 4,154
Sales, maturities and repayments of investments              28,163                      42,063                18,712
Purchases of investments                                    (62,386)                    (70,220)              (33,230)
Other investing activities                                     (152)                        225                  (299)
Net cash used in investing activities                       (34,375)                    (27,932)              (14,817)
Inflows on investment-type policies and contracts            33,920                      21,447                18,836
Withdrawals on investment-type policies and
contracts                                                   (10,209)                     (7,042)               (7,067)
Other financing activities                                    2,761                       5,224                 2,720
Net cash provided by financing activities                    26,472                      19,629                14,489
Effect of exchange rate changes on cash and cash
equivalents                                                     (15)                         (2)                  (26)
Net increase (decrease) in cash and cash
equivalents1                                        $        (1,660)        

$ 1,987 $ 3,800

1 Includes cash and cash equivalents, restricted cash and cash and cash equivalents of consolidated variable interest
entities.

Cash flows from operating activities

The primary cash inflows from operating activities include net investment
income, annuity considerations and insurance premiums. The primary cash outflows
from operating activities are comprised of benefit payments and operating
expenses. Our operating activities generated cash flows totaling $6.3 billion,
$10.3 billion and $4.2 billion for the years ended December 31, 2022, 2021 and
2020, respectively. The decrease in cash provided by operating activities for
the year ended December 31, 2022 compared to 2021 was primarily driven by lower
cash received from pension group annuity transactions net of outflows as well as
an increase in cash paid for taxes.

Cash flows from investing activities

The primary cash inflows from investing activities are the sales, maturities and
repayments of investments. The primary cash outflows from investing activities
are the purchases and acquisitions of new investments. Our investing activities
used cash flows totaling $34.4 billion, $27.9 billion and $14.8 billion for the
years ended December 31, 2022, 2021 and 2020, respectively. The increase in cash
used in investing activities was primarily attributed to a decrease in sales,
maturities and repayments of securities primarily driven by the redeployment of
the Jackson reinsurance investment portfolio in the prior year. This was
partially offset by a decrease in the purchases of investments as the prior year
included purchases from the redeployment of the Jackson reinsurance transaction,
partially offset by cash inflows from higher organic growth compared to the
prior year.

Cash flows from financing activities

The primary cash inflows from financing activities are inflows on our
investment-type policies and contracts, changes of cash collateral posted for
derivative transactions, capital contributions, proceeds from the issuance of
preferred stock and proceeds from borrowing activities. The primary cash
outflows from financing activities are withdrawals on our investment-type
policies, changes of cash collateral posted for derivative transactions,
repayments of outstanding borrowings and payment of preferred and common stock
dividends. Our financing activities provided cash flows totaling $26.5 billion,
$19.6 billion and $14.5 billion for the years ended December 31, 2022, 2021 and
2020, respectively. The increase in cash provided by financing activities was
primarily attributed to higher organic inflows from retail and flow reinsurance
net of withdrawals, net capital contributions from noncontrolling interests,
including capital contributions from third-party investors into AAA, and the
issuance of preferred stock in the current year, partially offset by the change
in cash collateral posted for derivative transactions driven by unfavorable
equity market performance in 2022 compared to 2021, the payment of the $750
million dividend to Apollo declared in 2021, the payment of additional common
stock dividends of $563 million for the year ended December 31, 2022 and lower
net proceeds from the issuance of long-term debt than in the prior year.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Material Cash Obligations

The following table summarizes estimated future cash obligations as of
December 31, 2022:
                                                                     Payments Due by Period
                                                                                                                     2028 and
(In millions)                         Total                2023             2024-2025           2026-2027           thereafter
Interest sensitive contract
liabilities                      $    173,653          $  20,431          $   40,875          $   33,971          $    78,376
Future policy benefits                 55,328              2,168               4,115               4,070               44,975
Other policy claims and benefits          129                129                   -                   -                    -
Dividends payable to
policyholders                              96                  5                   9                   9                   73
Debt1                                   5,357                153                 306                 306                4,592
Securities to repurchase2               5,315              2,036               1,360               1,919                    -
Total                            $    239,878          $  24,922          $   46,665          $   40,275          $   128,016

1 The obligations for debt payments include contractual maturities of principal and estimated future interest payments based on
the terms of the debt agreements.
2 The obligations for securities for repurchase payments include contractual maturities of principal and estimated future
interest payments based on the terms of the agreements. Future interest payments on floating rate repurchase agreements were
calculated using the December 31, 2022 interest rate.

Atlas Securitized Products Holdings LP (Atlas)

On February 8, 2023, the Company, Apollo and Credit Suisse AG (CS) undertook the
first close of their previously announced transaction whereby certain
subsidiaries of Atlas, which is owned by AAA, acquired certain assets of the CS
Securitized Products Group (the Transaction). A subsequent closing was held on
February 23, 2023. Under the terms of the Transaction, Atlas has agreed to pay
CS $3.3 billion, of which $0.4 billion is deferred until February 8, 2026, and
$2.9 billion is deferred until February 8, 2028. This deferred purchase price is
an obligation first of Atlas, second of AAA, third of AAM, fourth of AHL and
fifth of AARe, which has issued an assurance letter to CS to guarantee the full
amount of $3.3 billion. In exchange for the purchase price, Atlas expects to
receive, by the Transaction's final close, approximately $0.4 billion in cash
and a portfolio of senior secured warehouse assets, subject to debt, with
approximately $1 billion of tangible equity value (to the extent that the
warehouse assets received by Atlas constitute less than $1 billion of tangible
equity value, the amount of cash is expected to increase by an offsetting
amount). These warehouse assets are senior secured assets at industry standard
loan-to-value ratios, structured to investment grade-equivalent criteria, and
were approved by Atlas in connection with this transaction. In addition, Atlas
has entered into an investment management contract to manage certain assets on
behalf of CS, providing for quarterly payments expected to total approximately
$1.1 billion net to Atlas over 5 years. Finally, Atlas shall also benefit
generally from the net spread earned on its assets in excess of its cost of
financing. As a result, the fair value of our guarantees related to the
Transaction are not material to the consolidated financial statements.

Holding Company Liquidity

Common Stock Dividends

We declared common stock cash dividends of $750 million on December 31, 2021
with a record date and payment date following the completion of our merger with
AGM. The dividend payable was included in related party other liabilities on the
consolidated balance sheets as of December 31, 2021. The dividend was paid on
January 4, 2022. We also paid $563 million in additional common stock dividends
during the year ended December 31, 2022.

Dividends from Subsidiaries

AHL is a holding company whose primary liquidity needs include the cash-flow
requirements relating to its corporate activities, including its day-to-day
operations, debt servicing, preferred and common stock dividend payments and
strategic transactions, such as acquisitions. The primary source of AHL's cash
flow is dividends from its subsidiaries, which are expected to be adequate to
fund cash flow requirements based on current estimates of future obligations.

The ability of AHL's insurance subsidiaries to pay dividends is limited by
applicable laws and regulations of the jurisdictions where the subsidiaries are
domiciled, as well as agreements entered into with regulators. These laws and
regulations require, among other things, the insurance subsidiaries to maintain
minimum solvency requirements and limit the amount of dividends these
subsidiaries can pay.

Subject to these limitations and prior notification to the appropriate
regulatory agency, the US insurance subsidiaries are permitted to pay ordinary
dividends based on calculations specified under insurance laws of the relevant
state of domicile. Any distributions above the amount permitted by statute in
any twelve month period are considered to be extraordinary dividends, and
require the approval of the appropriate regulator prior to payment. AHL does not
currently plan on having the US subsidiaries pay any dividends to their parents.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Dividends from subsidiaries are projected to be the primary source of AHL's
liquidity. Under the Bermuda Insurance Act, each of our Bermuda insurance
subsidiaries is prohibited from paying a dividend in an amount exceeding 25% of
the prior year's statutory capital and surplus, unless at least two members of
the board of directors of the Bermuda insurance subsidiary and its principal
representative in Bermuda sign and submit to the Bermuda Monetary Authority
(BMA) an affidavit attesting that a dividend in excess of this amount would not
cause the Bermuda insurance subsidiary to fail to meet its relevant margins. In
certain instances, the Bermuda insurance subsidiary would also be required to
provide prior notice to the BMA in advance of the payment of dividends. In the
event that such an affidavit is submitted to the BMA in accordance with the
Bermuda Insurance Act, and further subject to the Bermuda insurance subsidiary
meeting its relevant margins, the Bermuda insurance subsidiary is permitted to
distribute up to the sum of 100% of statutory surplus and an amount less than
15% of its total statutory capital. Distributions in excess of this amount
require the approval of the BMA.

The maximum distribution permitted by law or contract is not necessarily
indicative of our actual ability to pay such distributions, which may be further
restricted by business and other considerations, such as the impact of such
distributions on surplus, which could affect our ratings or competitive position
and the amount of premiums that can be written. Specifically, the level of
capital needed to maintain desired financial strength ratings from rating
agencies, including S&P, A.M. Best, Fitch and Moody's, is of particular concern
when determining the amount of capital available for distributions. AHL believes
its insurance subsidiaries have sufficient statutory capital and surplus,
combined with additional capital available to be provided by AHL, to meet their
financial strength ratings objectives. Finally, state insurance laws and
regulations require that the statutory surplus of our insurance subsidiaries
following any dividend or distribution must be reasonable in relation to their
outstanding liabilities and adequate for the insurance subsidiaries' financial
needs.
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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Other Sources of Funding

We may seek to secure additional funding at the holding company level by means
other than dividends from subsidiaries, such as by drawing on our undrawn $1.25
billion Credit Facility, drawing on the remaining $1.5 billion of our revolving
Liquidity Facility or by pursuing future issuances of debt or preference shares
to third-party investors. Certain other sources of liquidity potentially
available at the holding company level are discussed below. Our Credit Facility
contains various standard covenants with which we must comply, including
maintaining a Consolidated Debt to Capitalization Ratio (as such term is defined
in the Credit Facility) of not greater than 35% at the end of any quarter,
maintaining a minimum Consolidated Net Worth (as such term is defined in the
Credit Facility) of no less than $7.3 billion, and restrictions on our ability
to incur debt and liens, in each case with certain exceptions. Our revolving
Liquidity Facility also contains various standard covenants with which we must
comply, including maintaining an ALRe minimum Consolidated Net Worth (as such
term is defined in the Liquidity Facility) of no less than $9.3 billion and
restrictions on our ability to incur debt and liens, in each case with certain
exceptions.

Shelf Registration - Under our Shelf Registration Statement, subject to market
conditions, we have the ability to issue, in indeterminate amounts, debt
securities, preference shares, depositary shares, Class A common shares,
warrants and units.

Debt - The following summarizes our outstanding long-term senior notes (in
millions, except percentages):
Issuance                          Issue Date                     Maturity Date                  Interest Rate                 Principal Balance
2028 Senior
Unsecured Notes                January 12, 2018                January 12, 2028                     4.125%                          $1,000
2030 Senior
Unsecured Notes                  April 3, 2020                   April 3, 2030                      6.150%                           $500
2031 Senior
Unsecured Notes                 October 8, 2020                January 15, 2031                     3.500%                           $500
2051 Senior
Unsecured Notes                  May 25, 2021                    May 25, 2051                       3.950%                           $500
2052 Senior
Unsecured Notes                December 13, 2021                 May 15, 2052                       3.450%                           $500
2033 Senior
Unsecured Notes                November 21, 2022               February 1, 2033                     6.650%                           $400

See Note 10 - Debt to the consolidated financial statements for further
information on debt.

Preferred Stock - The following summarizes our perpetual non-cumulative
preferred stock issuances (in millions, except share, per share data and
percentages):
Issuance

                      Fixed/Floating                Rate                Issue Date                Optional Redemption Date1           Shares Issued           Par Value Per Share          Liquidation Value Per Share          Aggregate Net Proceeds
Series A                  Fixed-to-Floating Rate           6.350%              June 10, 2019                    June 30, 2029                    34,500                      $1.00                           $25,000                             $839
Series B                        Fixed-Rate                 5.625%           September 19, 2019               September 30, 2024                  13,800                      $1.00                           $25,000                             $333
Series C                     Fixed-Rate Reset              6.375%              June 11, 2020                      Variable2                      24,000                      $1.00                           $25,000                             $583
Series D                        Fixed-Rate                 4.875%            December 18, 2020                December 30, 2025                  23,000                      $1.00                           $25,000                             $557
Series E                     Fixed-Rate Reset              7.750%            December 12, 2022                    Variable3                      20,000                      $1.00                           $25,000                             $487

1 We may redeem preferred stock anytime on or after the dates set forth in this column, subject to the terms of the applicable certificate of designations.
2 We may redeem during a period from and including June 30 of each year in which there is a Reset Date to and including such Reset Date. Reset Date means September 30, 2025 and each date falling on the fifth anniversary of the preceding Reset Date.
3 We may redeem during a period from and including December 30 of each year in which there is a Reset Date to and including such Reset Date. Reset Date means December 30, 2027 and each date falling on the fifth anniversary of the preceding Reset Date.

See Note 11 - Equity to the consolidated financial statements for further
information on preferred stock.

Unsecured Revolving Promissory Note Payable with AGM - AHL has an unsecured
revolving promissory note with AGM which allows AHL to borrow funds from AGM.
The note has a borrowing capacity of $500 million and maturity date of
December 13, 2025, or earlier at AGM's request. There was no outstanding balance
on the note payable as of December 31, 2022.

Intercompany Note - AHL has an unsecured revolving note payable with ALRe, which
permits AHL to borrow up to $4.0 billion with a fixed interest rate of 2.29% and
a maturity date of December 15, 2028. As of December 31, 2022 and 2021, the
revolving note payable had an outstanding balance of $896 million and $158
million, respectively.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Use of Captives

While our business strategy does not involve the use of captives, we ceded
certain liabilities to a captive reinsurer that we acquired in connection with
the Aviva USA acquisition. The captive reinsurer was formed in 2011 and is
domiciled in the state of Vermont. The statutory reserves of the affiliated
captive reinsurer are supported by a combination of funds withheld receivable
assets and letters of credit issued by an unaffiliated financial institution.
The reinsurance activities within the captive reinsurer are eliminated in
consolidation. As discussed in Note 13 - Statutory Requirements to the
consolidated financial statements, a permitted practice of the state of Vermont
allows the captive to include issued and outstanding letters of credit in the
amount of $112 million and $117 million as of December 31, 2022 and 2021,
respectively, as admitted assets in its statutory financial statements. The NAIC
and certain state insurance departments have scrutinized insurance companies'
use of affiliated captive reinsurers. Regulatory changes regarding the use of
captives could affect our financial position and results of operations.

Capital

We believe we have a strong capital position and are well positioned to meet
policyholder and other obligations. We measure capital sufficiency using an
internal capital model which reflects management's view on the various risks
inherent to our business, the amount of capital required to support our core
operating strategies and the amount of capital necessary to maintain our current
ratings in a recessionary environment. The amount of capital required to support
our core operating strategies is determined based upon internal modeling and
analysis of economic risk, as well as inputs from rating agency capital models
and consideration of both NAIC RBC and Bermuda capital requirements. Capital in
excess of this required amount is considered excess equity capital, which is
available to deploy.

As of December 31, 2022 and 2021, our US insurance companies' TAC, as defined by
the NAIC, was $4.1 billion and $3.0 billion, respectively, and our US RBC ratio
was 387% and 377%, respectively. The increase in our US insurance companies' TAC
was primarily related to capital contributions to provide capital in support of
organic growth. Each US domestic insurance subsidiary's state of domicile
imposes minimum RBC requirements that were developed by the NAIC. The formulas
for determining the amount of RBC specify various weighting factors that are
applied to financial balances or various levels of activity based on the
perceived degree of risk. Regulatory compliance is determined by a ratio of TAC
to its authorized control level RBC (ACL). Our TAC was significantly in excess
of all regulatory standards as of December 31, 2022 and 2021, respectively.

Bermuda statutory capital and surplus for our Bermuda insurance companies in
aggregate was $14.8 billion and $14.6 billion as of December 31, 2022 and 2021,
respectively. Our Bermuda insurance companies adhere to BMA regulatory capital
requirements to maintain statutory capital and surplus to meet the MMS and
maintain minimum EBS capital and surplus to meet the ECR. Under the EBS
framework, assets are recorded at market value and insurance reserves are
determined by reference to nine prescribed scenarios, with the scenario
resulting in the highest reserve balance being ultimately required to be
selected. The Bermuda group's EBS capital and surplus was $21.9 billion and
$19.7 billion, resulting in a BSCR ratio of 278% and 232% as of December 31,
2022 and 2021, respectively. The increase was primarily driven by the movement
in interest rates. The Bermuda group's BSCR ratio includes the capital and
surplus of ALRe, AARe, ALReI and all of their subsidiaries, including AADE and
its subsidiaries. An insurer must have a BSCR ratio of 100% or greater to be
considered solvent by the BMA. As of December 31, 2022 and 2021, our Bermuda
insurance companies held the appropriate capital to adhere to these regulatory
standards. As of December 31, 2022 and 2021, our Bermuda RBC ratio was 407% and
410%, respectively. The Bermuda RBC ratio is calculated by applying the NAIC RBC
factors to the statutory financial statements of our non-US reinsurance
subsidiaries on an aggregate basis with certain adjustments made by management
as described in the glossary. We exclude our interests in subsidiary holding
companies from our capital base for purposes of calculating Bermuda RBC, but do
reflect such interests within our capital analysis, net of risk charges.

As of December 31, 2022 and 2021, our consolidated statutory capital and surplus
in the aggregate was $20.1 billion and $19.6 billion, respectively, and our
consolidated RBC ratio was 416% and 433%, respectively. Our consolidated
regulatory capital represents the aggregate capital of our US and Bermuda
insurance entities, determined with respect to each insurance entity by applying
the statutory accounting principles applicable to each such entity with
adjustments made to, among other things, assets and expenses at the holding
company level. The consolidated RBC ratio is calculated by applying the NAIC RBC
factors to the statutory financial statements of our non-US reinsurance and US
reinsurance subsidiaries on an aggregate basis, including interests in other
non-insurance subsidiary holding companies, with certain adjustments made by
management to our Bermuda and non-insurance holding companies. See Glossary -
Consolidated RBC for further information.

ACRA - ACRA provides us with access to on-demand capital to support our growth
strategies and capital deployment opportunities. ACRA provides a capital source
to fund both our inorganic and organic channels, including pension group
annuity, funding agreement and retail channels. This strategic capital solution
allows us the flexibility to simultaneously deploy capital across multiple
accretive avenues, while maintaining a strong financial position.


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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Critical Accounting Estimates and Judgments

The preparation of consolidated financial statements in conformity with US GAAP
requires us to make estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of any contingent assets and liabilities
at the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. Amounts based on such
estimates involve numerous assumptions subject to varying and potentially
significant degrees of judgment and uncertainty, particularly related to the
future performance of the underlying business, and will likely change in the
future as additional information becomes available. Critical estimates and
assumptions are evaluated on an ongoing basis based on historical developments,
market conditions, industry trends and other information that is reasonable
under the circumstances. There can be no assurance that actual results will
conform to estimates and assumptions and that reported results of operations
will not be materially affected by the need to make future accounting
adjustments to reflect periodic changes in these estimates and assumptions.
Critical accounting estimates are impacted significantly by our methods,
judgments and assumptions used in the preparation of the consolidated financial
statements and should be read in conjunction with our significant accounting
policies described in Note 1 - Business, Basis of Presentation and Significant
Accounting Policies to the consolidated financial statements. The following
summary of our critical accounting estimates is intended to enhance one's
ability to assess our financial condition and results of operations and the
potential volatility due to changes in estimate.

Investments

We are responsible for the fair value measurement of investments presented in
our consolidated financial statements. We perform regular analysis and review of
our valuation techniques, assumptions and inputs used in determining fair value
to evaluate if the valuation approaches are appropriate and consistently
applied, and the various assumptions are reasonable. We also perform
quantitative and qualitative analysis and review of the information and prices
received from commercial pricing services and broker-dealers, to verify it
represents a reasonable estimate of the fair value of each investment. In
addition, we use both internally-developed and commercially-available cash flow
models to analyze the reasonableness of fair values using credit spreads and
other market assumptions, where appropriate. For investment funds, we typically
recognize our investment, including those for which we have elected the fair
value option, based on net asset value information provided by the general
partner or related asset manager. For a discussion of our investment funds for
which we have elected the fair value option, see Note 6 - Fair Value to the
consolidated financial statements.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Valuation of Fixed Maturity Securities, Equity Securities and Mortgage Loans

The following table presents the fair value of fixed maturity securities, equity
securities and mortgage loans, including those with related parties and those
held by consolidated VIEs, by pricing source and fair value hierarchy:

                                                                           December 31, 2022
(In millions, except percentages)                     Total             Level 1           Level 2           Level 3
Fixed maturity securities
AFS securities
Priced via commercial pricing services             $  78,335          $  2,570          $ 75,758          $      7
Priced via independent broker-dealer quotations       23,166                 -            20,475             2,691
Priced via models or other methods                    10,724                 -                 -            10,724
Trading securities
Priced via commercial pricing services                 1,087                21             1,066                 -
Priced via independent broker-dealer quotations          506                 2               453                51
Priced via models or other methods                       880                 -                 -               880
Trading securities of consolidated VIEs                1,063                 5               436               622
Total fixed maturity securities including related
parties and VIEs                                     115,761             2,598            98,188            14,975
Equity securities
Priced via commercial pricing services                   995               150               845                 -
Priced via independent broker-dealer quotations           15                 -                 -                15
Priced via models or other methods                       356                 -                 -               356

Total equity securities including related parties
and VIEs                                               1,366               150               845               371
Mortgage loans
Priced via commercial pricing services                27,644                 -                 -            27,644

Priced via models or other methods                     1,112                 -                 -             1,112
Mortgage loans of consolidated VIEs                    2,055                 -                 -             2,055

Total mortgage loans including related parties and
VIEs

                                                  30,811                 -                 -            30,811
Total fixed maturity securities, equity securities
and mortgage loans including related parties and
consolidated VIEs                                  $ 147,938          $  2,748          $ 99,033          $ 46,157
Percent of total                                       100.0  %            1.9  %           66.9  %           31.2  %



We measure the fair value of our securities based on assumptions used by market
participants in pricing the assets, which may include inherent risk,
restrictions on the sale or use of an asset, or nonperformance risk. The
estimate of fair value is the price that would be received to sell a security in
an orderly transaction between market participants in the principal market, or
the most advantageous market in the absence of a principal market, for that
security. Market participants are assumed to be independent, knowledgeable, able
and willing to transact an exchange while not under duress. The valuation of
securities involves judgment, is subject to considerable variability and is
revised as additional information becomes available. As such, changes in, or
deviations from, the assumptions used in such valuations can significantly
affect our consolidated financial statements. Financial markets are susceptible
to severe events evidenced by rapid depreciation in security values accompanied
by a reduction in asset liquidity. Our ability to sell securities, or the price
ultimately realized upon the sale of securities, depends upon the demand and
liquidity in the market and increases the use of judgment in determining the
estimated fair value of certain securities. Accordingly, estimates of fair value
are not necessarily indicative of the amounts that could be realized in a
current or future market exchange.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

For fixed maturity securities, we obtain the fair values, when available, based
on quoted prices in active markets that are regularly and readily obtainable.
Generally, these are liquid securities and the valuation does not require
significant management judgment. When quoted prices in active markets are not
available, fair value is based on market standard valuation techniques, giving
priority to observable inputs. We obtain the fair value for most marketable
bonds without an active market from several commercial pricing services. The
pricing services incorporate a variety of market observable information in their
valuation techniques, including benchmark yields, broker-dealer quotes, credit
quality, issuer spreads, bids, offers, and other reference data. For certain
fixed maturity securities without an active market, an internally-developed
discounted cash flow or other approach is utilized to calculate the fair value.
A discount rate is used, which adjusts a market comparable base rate for
securities with similar characteristics for credit spread, market illiquidity or
other adjustments. The fair value of privately placed fixed maturity securities
are based on the credit quality and duration of comparable marketable
securities, which may be securities of another issuer with similar
characteristics. In some instances, we use a matrix-based pricing model, which
considers the current level of risk-free interest rates, corporate spreads,
credit quality of the issuer, and cash flow characteristics of the security. We
also consider additional factors, such as net worth of the borrower, value of
collateral, capital structure of the borrower, presence of guarantees and our
evaluation of the borrower's ability to compete in its relevant market.

For equity securities, we obtain the fair value, when available, based on quoted
market prices. Other equity securities, typically private equities or equity
securities not traded on an exchange, are valued based on other sources, such as
commercial pricing services or brokers.

Effective January 1, 2022, we elected the fair value option on our mortgage loan
portfolio. We use independent commercial pricing services to value our mortgage
loan portfolio. Discounted cash flow analysis is performed through which the
loans' contractual cash flows are modeled and an appropriate discount rate is
determined to discount the cash flows to arrive at a present value. Financial
factors, credit factors, collateral characteristics and current market
conditions are all taken into consideration when performing the discounted cash
flow analysis. We perform vendor due diligence exercises annually to review
vendor processes, models and assumptions. Additionally, we review price
movements on a quarterly basis to ensure reasonableness.

Future Policy Benefits

The future policy benefit liabilities associated with long duration contracts
include term and whole-life products, accident and health, disability, and
deferred and immediate annuities with life contingencies. Liabilities for
nonparticipating long duration contracts are established using accepted
actuarial valuation methods which require us to make certain assumptions
regarding expenses, investment yields, mortality, morbidity, and persistency,
with a provision for adverse deviation, at the date of issue or acquisition. As
of December 31, 2022, the reserve investment yield assumptions for
nonparticipating contracts range from 2.3% to 6.6% and are specific to our
expected earned rate on the asset portfolio supporting the reserves. We base
other key assumptions, such as mortality and morbidity, on industry standard
data adjusted to align with actual company experience, if necessary. Premium
deficiency tests are performed periodically using current assumptions, without
provisions for adverse deviation, to test the appropriateness of the established
reserves. If the reserves using current assumptions are greater than the
existing reserves, the excess is recorded and the initial assumptions are
revised.

Liabilities for Guaranteed Living Withdrawal Benefits and Guaranteed Minimum
Death Benefits

We issue and reinsure deferred annuity contracts which contain GLWB and GMDB
riders. We establish future policy benefits for GLWB and GMDB by estimating the
expected value of withdrawal and death benefits in excess of the projected
account balance. We recognize the excess proportionally over the accumulation
period based on total actual and expected assessments. The methods we use to
estimate the liabilities have assumptions about policyholder behavior, which
includes lapses, withdrawals and utilization of the benefit riders, mortality,
and market conditions affecting the account balance.

Projected policyholder lapse and withdrawal behavior assumptions are set in one
of two ways. For certain blocks of business, this behavior is a function of our
predictive analytics model which considers various observable inputs. For the
remaining blocks of business, these assumptions are set at the product level by
grouping individual policies sharing similar features and guarantees and
reviewed periodically against experience. Base lapse rates consider the level of
surrender charges and are dynamically adjusted based on the level of current
interest rates relative to the guaranteed rates and the amount by which any
rider guarantees are in a net positive position. Rider utilization assumptions
consider the number and timing of policyholders electing the riders. We track
and update this assumption as experience emerges. Mortality assumptions are set
at the product level and generally based on standard industry tables, adjusted
for historical experience and a provision for mortality improvement. Projected
guaranteed benefit amounts in excess of the underlying account balances are
considered over a range of scenarios in order to capture our exposure to the
guaranteed withdrawal and death benefits.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The assessments used to accrue liabilities are based on interest margins, rider
charges, surrender charges and realized gains (losses). As such, future reserve
changes can be sensitive to changes in investment results and the impacts of
shadow adjustments, which represent the impact of assuming unrealized gains
(losses) are realized in future periods. As of December 31, 2022, the GLWB and
GMDB liability balance, including the impacts of shadow adjustments, totaled
$5.3 billion. The relative sensitivity of the GLWB and GMDB liability balance
from changes to these assumptions, including the impacts of shadow adjustments
from hypothetical changes in projected assessments, changes in the discount rate
and annual equity growth, has decreased and are not significant following the
business combination and pushdown accounting election described in Note 2 -
Business Combination.

Derivatives

Valuation of Embedded Derivatives on Indexed Annuities

We issue and reinsure products, primarily indexed annuity products, or purchase
investments that contain embedded derivatives. If we determine the embedded
derivative has economic characteristics not clearly and closely related to the
economic characteristics of the host contract, and a separate instrument with
the same terms would qualify as a derivative instrument, the embedded derivative
is bifurcated from the host contract and accounted for separately, unless the
fair value option is elected on the host contract.

Indexed annuities and indexed universal life insurance contracts allow the
policyholder to elect a fixed interest rate return or an equity market component
for which interest credited is based on the performance of certain equity market
indices. The equity market option is an embedded derivative, similar to a call
option. The benefit reserve is equal to the sum of the fair value of the
embedded derivative and the host (or guaranteed) component of the contracts. The
fair value of the embedded derivatives represents the present value of cash
flows attributable to the indexed strategies. The embedded derivative cash flows
are based on assumptions for future policy growth, which include assumptions for
expected index credits on the next policy anniversary date, future equity option
costs, volatility, interest rates and policyholder behavior. The embedded
derivative cash flows are discounted using a rate that reflects our own credit
rating. The host contract is established at contract inception as the initial
account value less the initial fair value of the embedded derivative and
accreted over the policy's life. Contracts acquired through a business
combination which contain an embedded derivative are re-bifurcated as of the
acquisition date.

In general, the change in the fair value of the embedded derivatives will not
directly correspond to the change in fair value of the hedging derivative
assets. The derivatives are intended to hedge the index credits expected to be
granted at the end of the current term. The options valued in the embedded
derivatives represent the rights of the policyholder to receive index credits
over the period indexed strategies are made available to the policyholder, which
is typically longer than the current term of the options. From an economic basis
we believe it is suitable to hedge with options that align with index terms of
our indexed annuity products because policyholder accounts are credited with
index performance at the end of each index term. However, because the value of
an embedded derivative in an indexed annuity contract is longer-dated, there is
a duration mismatch which may lead to differences in the recognition of income
and expense for accounting purposes.

A significant assumption in determining policy liabilities for indexed annuities
is the vector of rates used to discount indexed strategy cash flows. The change
in risk free rates is expected to drive most of the movement in the discount
rates between periods. Changes to credit spreads for a given credit rating as
well as any change to our credit rating requiring a revised level of
nonperformance risk would also be factors in the changes to the discount rate.
If the discount rates used to discount the indexed strategy cash flows were to
fluctuate, there would be a resulting change in reserves for indexed annuities
recorded through the consolidated statements of income (loss).

As of December 31, 2022, we had embedded derivative liabilities classified as
Level 3 in the fair value hierarchy of $5.8 billion. The increase (decrease) to
the embedded derivatives on indexed annuity products from hypothetical changes
in discount rates is summarized as follows:

                   (In millions)               December 31, 2022
                   +100 bps discount rate     $             (299)
                   -100 bps discount rate                    331



However, these estimated effects do not take into account potential changes in
other variables, such as equity price levels and market volatility, which can
also contribute significantly to changes in carrying values. Therefore, the
quantitative impact presented in the table above does not necessarily correspond
to the ultimate impact on the consolidated financial statements. In determining
the ranges, we have considered current market conditions, as well as the market
level of discount rates that can reasonably be anticipated over the near-term.
For additional information regarding sensitivities to interest rate risk and
public equity risk, see Item 7A. Quantitative and Qualitative Disclosures About
Market Risks-Sensitivities.

Deferred Acquisition Costs, Deferred Sales Inducements, and Value of Business
Acquired

Costs related directly to the successful acquisition of new or renewal insurance
or investment contracts are deferred to the extent they are recoverable from
future premiums or gross profits. These costs consist of commissions and policy
issuance costs, as well as sales inducements credited to policyholder account
balances. We perform periodic tests, including at issuance, to determine if the
deferred costs are recoverable. If it is determined that the deferred costs are
not recoverable, we record a cumulative charge to the current period.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Deferred costs related to universal life-type policies and investment contracts
with significant revenue streams from sources other than investment of the
policyholder funds are amortized over the lives of the policies, based upon the
proportion of the present value of actual and expected deferred costs to the
present value of actual and expected gross profits to be earned over the life of
the policies. Gross profits include investment spread margins, surrender charge
income, policy administration, changes in the GLWB and GMDB reserves and
realized gains (losses) on investments. Current period gross profits for indexed
annuities also include the change in fair value of both freestanding and
embedded derivatives.

Our estimates of expected gross profits and margins are based on assumptions
using accepted actuarial methods related to policyholder behavior, including
lapses and the utilization of benefit riders, mortality, yields on investments
supporting the liabilities, future interest credited amounts (including indexed
related credited amounts on fixed indexed annuity products), and other policy
changes as applicable, and the level of expenses necessary to maintain the
policies over their expected lives. Each reporting period, we update estimated
gross profits with actual gross profits as part of the amortization process. We
also periodically revise the key assumptions used in the amortization
calculation which results in revisions to the estimated future gross profits.
The effects of changes in assumptions are recorded as unlocking in the period in
which the changes are made.

We establish VOBA for blocks of insurance contracts acquired through the
acquisition of insurance entities. The fair value of the liabilities purchased
is determined using market participant assumptions at the time of acquisition
and represents the amount an acquirer would expect to be compensated to assume
the contracts. We record the fair value of the liabilities assumed in two
components: reserves and VOBA. Reserves are established using our best estimate
assumptions, plus a provision for adverse deviation where applicable, as of the
business combination date. VOBA is the difference between the fair value of the
liabilities and the reserves. VOBA can be either positive or negative. Any
negative VOBA is recorded to the same financial statement line on the
consolidated balance sheets as the associated reserves. Positive VOBA is
recorded in DAC, DSI and VOBA on the consolidated balance sheets.

VOBA and negative VOBA are amortized in relation to applicable policyholder
liabilities. Significant assumptions which impact VOBA and negative VOBA
amortization are consistent with those which impact the measurement of
policyholder liabilities.

Estimated future gross profits vary based on a number of factors but are
typically most sensitive to changes in investment spread margins, which are the
most significant component of gross profits. If estimated gross profits for all
future years on business in force were to change, including the impacts of
shadow adjustments, there would be a resulting increase or decrease to the
balances of DAC and DSI recorded as an increase or decrease to amortization of
DAC and DSI on the consolidated statements of income (loss) or AOCI.

Actual gross profits will depend on actual margins, including the changes in the
value of embedded derivatives. The most sensitive assumption in determining the
value of the embedded derivative is the vector of rates used to discount the
embedded derivative cash flows. If the discount rates used to discount the
embedded derivative cash flows were to change, there would be a resulting
increase or decrease to the balances of DAC and DSI recorded as an increase or
decrease in amortization of DAC and DSI on the consolidated statements of income
(loss).

Following the business combination and application of pushdown accounting
described in Note 2 - Business Combination, Predecessor DAC and DSI balances
were eliminated. Successor DAC and DSI balances exhibit less sensitivity to
hypothetical changes in estimated future gross profits and changes in the
embedded derivative discount rate as they are relatively less material following
the business combination. VOBA balances no longer amortize based on estimated
gross profits, and accordingly, are not sensitive to changes to actual or
estimated gross profits.

Consolidation

We consolidate all entities in which we hold a controlling financial interest as
of the financial statement date whether through a majority voting interest or
otherwise, including those investment funds that meet the definition of a VIE in
which we are determined to be the primary beneficiary. If we are not the primary
beneficiary, the general partner or another limited partner may consolidate the
investment fund, and we record the investment as an equity method investment.
See Note 5 - Variable Interest Entities to the consolidated financial
statements.

The assessment of whether an entity is a VIE and the determination of whether we
should consolidate such VIE requires judgment by our management. Those judgments
include, but are not limited to: (1) determining whether the total equity
investment at risk is sufficient to permit the entity to finance its activities
without additional subordinated financial support, (2) evaluating whether the
holders of equity investment at risk, as a group, can make decisions that have a
significant effect on the success of the entity, (3) determining whether the
equity investors have proportionate voting rights to their obligations to absorb
losses or rights to receive the expected residual returns from an entity and
(4) evaluating the nature of the relationship and activities of those related
parties with shared power or under common control for purposes of determining
which party within the related-party group is most closely associated with the
VIE. Judgments are also made in determining whether a member in the equity group
has a controlling financial interest including power to direct activities that
most significantly impact the VIE's economic performance and rights to receive
benefits or obligations to absorb losses that could be potentially significant
to the VIE. This analysis considers all relevant economic interests including
proportionate interests held through related parties.

Additionally, evaluating an entity to determine whether it meets the
characteristics of an investment company is qualitative in nature and may
involve significant judgment. We have retained this specialized accounting for
investment companies in consolidation.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Income Taxes

Significant judgment is required in determining tax expense and in evaluating
tax positions, including evaluating uncertainties. We recognize the tax benefit
of uncertain tax positions only where the position is "more likely than not" to
be sustained upon examination, including resolution of any related appeals or
litigation processes, based on the technical merits of the position. The tax
benefit is measured as the largest amount of benefit that has a greater than 50%
likelihood of being realized upon ultimate settlement. If a tax position is not
considered more likely than not to be sustained, then no benefits of the
position are recognized. We review and evaluate our tax positions quarterly to
determine whether we have uncertain tax positions that require financial
statement recognition. For more information regarding income taxes, see
Note 12 - Income Taxes to the consolidated financial statements.

Deferred tax assets and liabilities are recognized for the expected future tax
consequences of differences between the carrying amount of assets and
liabilities and their respective tax basis using currently enacted tax rates.
The effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period during which the change is enacted. Deferred
tax assets are reduced by a valuation allowance when it is more likely than not
that all or a portion of the deferred tax assets will not be realized. We test
the value of deferred assets for realizability at the taxpaying-component level
within each tax jurisdiction. Significant judgment and estimates are required in
determining whether valuation allowances should be established as well as the
amount of such allowances. When making such determination, consideration is
given to, among other things, the following:

•whether sufficient taxable income exists within the allowed carryback or
carryforward periods;
•whether future reversals of existing taxable temporary differences will occur,
including any tax planning strategies that could be used;
•nature or character (e.g., ordinary vs. capital) of the deferred tax assets and
liabilities; and
•whether future taxable income exclusive of reversing temporary differences and
carryforwards exist.

Impact of Recent Accounting Pronouncements

For a discussion of new accounting pronouncements affecting us, see Note 1 -
Business, Basis of Presentation and Significant Accounting Policies to the
consolidated financial statements.

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