ATHENE HOLDING LTD – 10-Q – 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                                              62

              Industry Trends and Competition                       64

              Key Operating and Non-GAAP Measures                   68

              Results of Operations                                 71

              Investment Portfolio                                  77

              Non-GAAP Measure Reconciliations                      96

              Liquidity and Capital Resources                      100

              Critical Accounting Estimates and Judgments          105




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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Overview

We are a leading financial services company specializing in retirement services
that issues, reinsures and acquires retirement savings products designed for the
increasing number of individuals and institutions seeking to fund retirement
needs. We generate attractive financial results for our policyholders and
shareholders by combining our two core competencies of (1) sourcing long-term,
generally illiquid liabilities and (2) using the global scale and reach of
Apollo's business to invest in a high-quality investment portfolio, which takes
advantage of the illiquid nature of our liabilities. 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 September 30,
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 8.5 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 $236.7 billion as of September 30, 2022. For the
nine months ended September 30, 2022 and the year ended December 31, 2021, we
generated an annualized net investment spread of 1.59% and 1.94%, respectively.

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

                                                Successor                     Predecessor                 Successor                      Predecessor
                                              Three months
                                                  ended
                                              September 30,                Three months ended         Nine months ended               Nine months ended
(In millions)                                     2022                     September 30, 2021        September 30, 2022              September 30, 2021
Retail                                      $        6,132                $           2,372          $         12,745                $          5,878
Flow reinsurance                                     2,291                              635                     4,330                           1,213
Funding agreements1                                  1,588                            2,337                     9,039                           9,637
Pension group annuities                              2,944                            6,593                    10,446                          10,960
Gross organic inflows                               12,955                           11,937                    36,560                          27,688
Gross inorganic inflows                                  -                                -                         -                               -
Total gross inflows                                 12,955                           11,937                    36,560                          27,688
Gross outflows2                                     (7,000)                          (4,433)                  (16,808)                        (13,190)
Net flows                                   $        5,955                $           7,504          $         19,752                $         14,498

Inflows attributable to Athene              $       11,000                $           7,180          $         29,222                $         19,780
Inflows attributable to ACRA noncontrolling
interest                                             1,955                            4,757                     7,338                           7,908
Total gross inflows                         $       12,955                $          11,937          $         36,560                $         27,688

Outflows attributable to Athene             $       (5,803)               $          (3,746)         $        (13,937)               $        (11,168)
Outflows attributable to ACRA
noncontrolling interest                             (1,197)                            (687)                   (2,871)                         (2,022)
Total gross outflows2                       $       (7,000)               $          (4,433)         $        (16,808)               $        (13,190)

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.

Our organic channels, including retail, flow reinsurance and institutional
products, provided gross inflows of $36.6 billion and $27.7 billion for the nine
months ended September 30, 2022 and 2021, respectively, which were underwritten
to attractive, above target returns. Gross organic inflows increased $8.9
billion, or 32% from the prior year, 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 and pension group annuity payments (collectively,
gross outflows), in the aggregate were $16.8 billion and $13.2 billion for the
nine months ended September 30, 2022 and 2021, respectively. The increase in
gross outflows was primarily driven by the repurchase and maturity of larger
funding agreement issuances in 2022. Our funding agreement repurchases related
to our first-ever targeted tender offer for two FABNs included in our FABN
program. We believe that our credit profile, our 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 plan 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.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Within our retail channel, we had fixed annuity sales of $12.7 billion and $5.9
billion for the nine months ended September 30, 2022 and 2021, respectively. The
increase in our retail channel was driven by the strong performance of our
indexed annuity and MYGA products across our bank, independent marketing
organization (IMO) and broker-dealer channels, exhibiting strong sales execution
as interest rates have risen in the current year, as well as our expansion into
large financial institutions. We have maintained our disciplined approach to
pricing, including with respect to targeted underwritten returns. We aim to
continue to grow our retail channel by deepening our relationships with our
approximately 54 IMOs, approximately 75,000 independent agents and our growing
network of 16 banks and 125 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 rising interest rate environment. We
believe this should support growth in sales at our desired cost of funds through
increased volumes via current IMOs, while also allowing 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.

In our flow reinsurance channel, we target reinsurance business consistent with
our preferred liability characteristics and, as such, flow reinsurance provides
another opportunistic channel for us to source liabilities with attractive
crediting rates. We generated inflows through our flow reinsurance channel of
$4.3 billion and $1.2 billion for the nine months ended September 30, 2022 and
2021, 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 $19.5 billion and
$20.6 billion for the nine months ended September 30, 2022 and 2021,
respectively. The decrease in our institutional channel was driven by lower
funding agreement and pension group annuity inflows. We issued funding
agreements in the aggregate principal amount of $9.0 billion and $9.6 billion
for the nine months ended September 30, 2022 and 2021, respectively, including
issuances in multiple currencies. The decrease in our funding agreement channel
from prior year was driven by fewer issuances as spreads remained elevated
across the industry. Funding agreements are comprised of funding agreements
issued under our FABN and FABR programs, funding agreements issued to the FHLB
and repurchase agreements with maturities exceeding one year at issuance, with
inflows in the aggregate principal amount of $4.3 billion, $1.0 billion, $1.4
billion and $2.3 billion, respectively, for the nine months ended September 30,
2022 and issuances outstanding of $20.8 billion, $2.0 billion, $3.7 billion and
$2.9 billion, respectively, as of September 30, 2022. During the nine months
ended September 30, 2022, we closed nine pension group annuity transactions and
issued annuity contracts in the aggregate principal amount of $10.4 billion,
compared to $11.0 billion during the nine months ended September 30, 2021. Since
entering the pension group annuity channel in 2017, we have closed 42 deals
involving more than 440,000 plan participants resulting in the issuance or
reinsurance of group annuities of $40.6 billion to date. We expect to grow our
institutional channel by continuing to engage in pension group annuity
transactions and programmatic issuances of funding agreements.

Our inorganic channel has contributed significantly to our growth through both
acquisitions and block reinsurance transactions. We believe our internal
transactions 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 us to
support our growth aspirations. As of September 30, 2022, we estimate that we
have approximately $5.8 billion in capital available to deploy, consisting of
approximately $2.7 billion in excess capital, $2.9 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 favorable market conditions and general availability.

In order 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.

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.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

AAA Investment

On April 1, 2022, we contributed certain of our alternative investments to AAA
in exchange for limited partnership interests in AAA. 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
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.

Industry Trends and Competition

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, 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 issues or military action, such as
the heightened tensions between the US and China or the armed conflict between
Ukraine and Russia, and the corresponding sanctions imposed by the US and other
countries. New or evolving legal and regulatory requirements on business
investment, hiring, migration, labor supply and global supply chains are also
key drivers of economic conditions.

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

US inflation remained heightened during the third 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 increased
8.2% as of September 30, 2022, compared to 9.1% as of June 30, 2022, and core
inflation is at the highest level since the 1980s. The increase in the US
inflation rate continues to be driven by various factors, including the armed
conflict between Ukraine and Russia, supply chain disruptions, persistent
consumer demand, tight labor markets, a distorted supply/demand housing
imbalance, and residential vacancy rates. As a result, the Federal Reserve
increased interest rates by 75 basis points twice during the third quarter of
2022. Following the higher-than-expected inflation report in early October, the
Federal Reserve once again raised interest rates by 75 basis points at its
November meeting. The Federal Reserve's recent interest rate increases have been
larger and faster-paced than in any cycle in recent history and thus drove
interest rate volatility throughout the third quarter of 2022. Further, the
increasing yield disparity globally drove the strength of the US dollar in the
third quarter of 2022.

Equity markets ended the third quarter of 2022 lower as recession concerns grew,
and credit markets faced similar underperformance. The Bureau of Economic
Analysis reported real GDP increased at an annual rate of 2.6% in the third
quarter of 2022. The price of crude oil depreciated by 24.8% during the third
quarter, although up 5.7% from the start of 2022, as recession fears
counteracted constrained supply and oil export disruptions due to the ongoing
conflict between Ukraine and Russia. However, the US unemployment rate edged
lower to 3.5% as of September 30, 2022, as reported by the US Bureau of Labor
Statistics, and low unemployment poses an unusual situation for a recession. As
of October 2022, the International Monetary Fund estimated the US will expand by
1.6% in 2022 and 1.0% in 2023.

Interest Rate Environment

Rates have already moved meaningfully higher than most predictions for 2022, and
this trend continued in the third quarter. The ten-year US Treasury moved out of
the 2.80%-3.20% range, reaching levels as high as 3.97% over the quarter. Given
the Federal Reserve's continued focus on curbing inflation and recessionary
concerns, it is difficult to predict rates in the near term, although they will
likely be higher.

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, it is likely that 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 we are currently experiencing,
and which we expect would underperform in a declining rate environment. As of
September 30, 2022, our net invested asset portfolio includes $38.3 billion of
floating rate investments, or 20% of our net invested assets, our net reserve
liabilities include $13.5 billion of floating rate liabilities at notional, or
7% of our net invested assets, translating to $24.8 billion of net floating rate
assets, or 13% of our net invested assets.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

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
September 30, 2022, most of our products were deferred annuities with 20% of our
FIAs at the minimum guarantees and 30% of our fixed rate annuities at the
minimum crediting rates. As of September 30, 2022, minimum guarantees on all of
our deferred annuities, including those with crediting rates already at their
minimum guarantees, were, on average, greater than 130 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 Part I-Item 3. Quantitative and Qualitative Disclosures About Market Risks
to this report and Part II-Item 7A. Quantitative and Qualitative Disclosures
About Market Risks in our 2021 Annual Report, which includes a discussion
regarding interest rate and other significant risks and our strategies for
managing these risks.

Discontinuation of certain IBORs (including LIBOR)

On December 31, 2021, (1) 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 and (2) 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
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. 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 U.S., 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 September 30, 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                                                $        31,775          $        29,456
Product Liabilities                                                 10,079                    5,499
Derivatives Hedging Product Liabilities                             13,973                    8,216
Other Derivatives                                                    3,552                    3,552
Other Contracts                                                      1,113                    1,113
Total notional of contracts tied to LIBOR                  $        60,492          $        47,836



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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Investments

As of September 30, 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                          $           718      $                           641
RMBS                                          2,797                                2,763
CMBS                                            707                                  698
CLO                                          15,272                               15,244
ABS                                           5,712                                5,119
Bank Loans                                    1,245                                1,186
Total Multi-lateral Arrangements             26,451                               25,651
Bi-lateral Arrangements
CML                                           5,204                                3,685
RML                                             120                                  120
Total Bi-lateral Arrangements                 5,324                                3,805
Total investments tied to LIBOR     $        31,775      $                  

29,456

Of the total notional value of investment-related contracts tied to LIBOR
extending beyond June 30, 2023, $25.7 billion, or 87.1%, 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 instrument to instrument. 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 New York or US
federal LIBOR transition law, to rectify 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. 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 $3.8 billion, or 12.9%, 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-Uncertainty relating to the LIBOR Calculation process and
the phasing out of LIBOR after a future date may adversely affect the value of
our investment portfolio, our ability to achieve our hedging objectives and our
ability to issue funding agreements bearing a floating rate of interest included
in our 2021 Annual Report. 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 September 30, 2022, we had product liabilities with a notional value of
approximately $10.1 billion for which LIBOR is a component in the determination
of interest credited, of which we expect $5.5 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.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

As of September 30, 2022, we held derivatives with a notional value of
approximately $14.0 billion to hedge our exposure to these product liabilities,
of which we expect $8.2 billion to extend beyond June 30, 2023. Included within
this category are $4.2 billion of Eurodollar futures, of which we expect $2.9
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. 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 an ISDA Master
Agreement 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 an ISDA Master Agreement. 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. 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. The Protocol contains templates for possible
bilateral amendments to legacy contracts for situations in which the fallbacks
contemplated by the Protocol give rise to 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 templates to mitigate such risk.

Other Contracts and Other Sources of Exposure

The "Other Contracts" category is comprised of our LIBOR-based floating rate
funding agreements, fixed-to-float Series A preference shares, and our 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
$87.3 billion for the six months ended June 30, 2022, a 31.1% 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 six months
ended June 30, 2022 (the most recent period for which specific market share data
is available), we were the fourth largest company based on sales of $6.2
billion, translating to a 7.1% market share. For the six months ended June 30,
2021, our market share was 5.0% with sales of $3.4 billion.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

According to LIMRA, total fixed-indexed annuity market sales in the United
States were $36.0 billion for the six months ended June 30, 2022, a 20.0%
increase from the same time period in 2021. For the six months ended June 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 $4.5 billion, and our
market share for the same period was 12.6%. For the six months ended June 30,
2021, we were the largest provider of FIAs based on sales of $3.3 billion,
translating to a 10.9% market share.

According to LIMRA, total registered indexed linked annuity (RILA) market sales
in the United States were $20.4 billion for the six months ended June 30, 2022,
a 7.2% increase from the same time period in 2021. For the six months ended June
30, 2022 (the most recent period for which specific market share data is
available), we were the eleventh largest provider of RILAs based on sales of
$462 million, and our market share for the same period was 2.3%. For the six
months ended June 30, 2021, we were the tenth largest provider of RILAs based on
sales of $181 million, translating to a 0.9% market share. We believe RILAs
represent a significant growth opportunity for Athene.

Key Operating and Non-GAAP Measures

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

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 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 market value adjustments (MVA) 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.


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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

•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.

•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.
Accordingly, we believe using measures which exclude AOCI and the cumulative
changes in fair value of funds withheld and modco reinsurance assets as well as
mortgage loan assets are useful in analyzing trends in our operating results.
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
from ACRA, 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.

Net investment earned rate is a non-GAAP measure we use to evaluate the
performance of our net invested assets that does not correspond to GAAP net
investment income. Net investment earned rate is computed as the income from our
net invested assets divided by the average net invested assets, 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. We include
the income and assets supporting our change in fair value of reinsurance assets
by evaluating the underlying investments of the funds withheld at interest
receivables and we include the net investment income from those underlying
investments which does not correspond to the GAAP presentation of change in fair
value of reinsurance assets. We exclude the income and assets supporting
business that we have exited through ceded reinsurance including funds withheld
agreements. We believe the adjustments for reinsurance provide a net investment
earned rate on the assets for which we have economic exposure.

Cost of funds includes liability costs related to cost of crediting on both
deferred annuities and institutional products as well as other liability costs,
but does not include the proportionate share of the ACRA cost of funds
associated with the noncontrolling interest. Cost of 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 (i)
pension group annuity costs, including interest credited, benefit payments and
other reserve changes, net of premiums received when issued, and (ii) 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. 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
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

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 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 GAAP.

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 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 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, GAAP requires the ceded liabilities and related reinsurance
recoverables to continue to be recorded in our consolidated financial statements
despite the transfer of economic risk to the counterparty in connection with the
reinsurance transaction. While we believe net reserve liabilities is a
meaningful financial metric and enhances our understanding of the underlying
profitability drivers of our business, it should not be used as a substitute for
total liabilities presented under GAAP.

Sales

Sales statistics do not correspond to revenues under GAAP but are used as
relevant measures to understand our business performance as it relates to
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). While we believe sales is a meaningful metric
and enhances our understanding of our business performance, it should not be
used as a substitute for premiums presented under GAAP.

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Item 2. 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 two periods,
Predecessor and Successor, which relate to the period preceding and period
succeeding our merger with AGM, respectively.

                                                   Successor                        Predecessor                  Successor                        Predecessor
                                               Three months ended                Three months ended          Nine months ended                 Nine months ended
(In millions)                                  September 30, 2022                September 30, 2021          September 30, 2022               September 30, 2021
Revenues                                     $             2,309                $           8,724          $             3,835                $         19,538
Benefits and expenses                                      3,896                            8,004                       11,871                          16,689
Income (loss) before income taxes                         (1,587)                             720                       (8,036)                          2,849
Income tax expense (benefit)                                (210)                             (50)                      (1,101)                            196
Net income (loss)                                         (1,377)                             770                       (6,935)                          2,653
Less: Net income (loss) attributable to
noncontrolling interests                                    (476)                              37                       (2,431)                         

(111)

Net income (loss) attributable to Athene
Holding Ltd.                                                (901)                             733                       (4,504)                         

2,764

Less: Preferred stock dividends                               35                               35                          105                          

106

Net income (loss) available to AHL common
shareholder                                  $              (936)               $             698          $            (4,609)               $          2,658

Three Months Ended September 30, 2022 Compared to the Three Months Ended
September 30, 2021

In this section, references to 2022 refer to the three months ended September
30, 2022 and references to 2021 refer to the three months ended September 30,
2021.

Net Income (Loss) Available to AHL Common Shareholder

Net income (loss) available to AHL common shareholder decreased by $1.6 billion,
or 234%, to $(936) million in 2022 from $698 million in 2021. The decrease in
net income (loss) available to AHL common shareholder was driven by a $6.4
billion decrease in revenues, partially offset by a $4.1 billion decrease in
benefits and expenses, a $513 million decrease in noncontrolling interests and a
$160 million decrease in income tax expense.

Revenues

Revenues decreased by $6.4 billion to $2.3 billion in 2022 from $8.7 billion in
2021. The decrease was driven by a decrease in premiums and a decrease in
investment related gains and (losses), partially offset by an increase in net
investment income and an increase in VIE investment related gains and losses.

Premiums decreased by $3.6 billion to $3.0 billion in 2022 from $6.7 billion in
2021, driven by lower pension group annuity premiums compared to the prior year.

Investment related gains and (losses) decreased by $3.2 billion to $(2.8)
billion in 2022 from $385 million in 2021, primarily due to the changes in the
fair value of reinsurance assets, mortgage loans, FIA hedging derivatives,
trading and equity securities and realized losses on AFS securities, partially
offset by foreign exchange gains on derivatives. The change in fair value of
reinsurance assets decreased $2.0 billion primarily driven by the change in the
value of the underlying assets mainly related to a larger increase in US
Treasury rates and credit spread widening in the current year. The $1.2 billion
unfavorable change in mortgage loans was primarily due to an increase in US
Treasury rates and credit spread widening 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 an allowance
for credit losses. The change in fair value of FIA hedging derivatives decreased
$436 million primarily driven by the unfavorable performance of the indices upon
which our call options are based. The majority of our call options are based on
the S&P 500 index which decreased 5.3% in 2022, compared to an increase of 0.2%
in 2021. The unfavorable changes in realized gains and losses on AFS securities
of $702 million and fair value of trading and equity securities of $164 million
were primarily due to a larger increase in US Treasury rates and credit spread
widening in the current year as well as unfavorable economics, including foreign
exchange impacts. The increase in foreign exchange gains on derivatives reflects
additional assets denominated in foreign currencies and the strengthening of the
US dollar in the current quarter.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Net investment income increased by $371 million to $1.8 billion in 2022 from
$1.5 billion in 2021, primarily driven by growth in our investment portfolio
attributed to strong inflows during the previous twelve months and higher
floating rate income related to higher short-term interest rates. These
increases were partially offset by a decrease in alternative income as a
significant portion of our alternative investments were transferred to AAA, a
consolidated VIE, as well as lower bond call income and lower RMBS returns. As a
result of purchase accounting, the book value of our investment portfolio was
marked up to fair value resulting in an adverse impact to our net investment
income.

VIE investment related gains and losses increased by $78 million to $79 million
in 2022 from $1 million in 2021, primarily driven by an increase in consolidated
VIEs following our merger with Apollo as well as unrealized gains on assets
transferred to AAA.

Benefits and Expenses

Benefits and expenses decreased by $4.1 billion to $3.9 billion in 2022 from
$8.0 billion in 2021. The decrease was driven by a decrease in future policy and
other policy benefits, a decrease in interest sensitive contract 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 driven by a
decrease of FIA embedded derivative liabilities.

Future policy and other policy benefits decreased by $3.7 billion to $3.3
billion in 2022 from $7.0 billion in 2021, primarily attributable to lower
pension group annuity obligations, a decrease in the change in rider reserves
and higher negative VOBA amortization resulting from purchase accounting. The
favorable change in rider reserves of $114 million was primarily driven by the
unfavorable change in reinsurance assets.

Interest sensitive contract benefits decreased by $483 million to $89 million in
2022 from $572 million in 2021 primarily driven by a decrease in the change in
FIA fair value embedded derivatives of $668 million 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 resulting in a favorable impact to our interest
sensitive contract benefits. 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 a
decrease of 5.3% in 2022, compared to an increase of 0.2% in 2021, as well as a
favorable change in discount rates and favorable unlocking, partially offset by
unfavorable economics impacting policyholder projected benefits. The FIA fair
value embedded derivatives unlocking in 2022 was $41 million favorable due to
changes to projected interest crediting, partially offset by the impact of
higher rates on future account values.

DAC, DSI and VOBA amortization decreased by $43 million to $125 million in 2022
from $168 million in 2021, primarily due to the impacts from purchase accounting
reflecting the removal of historical DAC and DSI, partially offset by the
establishment of a new VOBA asset.

Policy and other operating expenses increased by $138 million to $388 million in
2022 from $250 million 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 several new
repurchase agreements.

Taxes

Income tax expense (benefit) decreased by $160 million to $(210) million in 2022
from $(50) 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 and mortgage loans. The
income tax benefit for 2021 was driven by a favorable prior year out-of-period
adjustment of $116 million related to the correction of errors in taxable income
by jurisdiction.

Our effective tax rate in the third quarter of 2022 was a benefit of 13%
compared to a benefit of 7% in 2021. The effective tax rate in 2022 was due to
the change in fair value of reinsurance assets and mortgage loans subject to
tax. Our effective tax rate in 2021 was dependent upon the relationship of
income or loss subject to tax compared to the consolidated income or loss before
income taxes.

Noncontrolling Interests

Noncontrolling interests decreased by $513 million to $(476) million in 2022
from $37 million in 2021, primarily due to the unfavorable change in fair value
of reinsurance assets as a result of unrealized losses within reinsurance
investment portfolios.

Nine Months Ended September 30, 2022 Compared to the Nine Months Ended September
30, 2021

In this section, references to 2022 refer to the nine months ended September 30,
2022 and references to 2021 refer to the nine months ended September 30, 2021.

Net Income (Loss) Available to AHL Common Shareholder

Net income (loss) available to AHL common shareholder decreased by $7.3 billion,
or 273%, to $(4.6) billion in 2022 from $2.7 billion in 2021. The decrease in
net income (loss) available to AHL common shareholder was driven by a $15.7
billion decrease in revenues, partially offset by a $4.8 billion decrease in
benefits and expenses, a $2.3 billion decrease in noncontrolling interests and a
$1.3 billion decrease in income tax expense.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Revenues

Revenues decreased by $15.7 billion to $3.8 billion in 2022 from $19.5 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 VIE
investment related gains and losses and an increase in net investment income.

Investment related gains and losses decreased by $15.4 billion to $(12.8)
billion in 2022 from $2.6 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 and an increase in the
provision for credit losses, partially offset by foreign exchange gains on
derivatives. The change in fair value of reinsurance assets decreased $7.5
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 $4.4 billion
primarily driven by the unfavorable performance of the indices upon which our
call options are based. The majority of our call options are based on the S&P
500 index which decreased 24.8% in 2022, compared to an increase of 14.7% in
2021. The $3.1 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 an
allowance for credit losses. The unfavorable changes in realized gains and
losses on AFS securities of $1.6 billion and fair value of trading and equity
securities of $797 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 $265
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 gains on derivatives reflects
additional assets denominated in foreign currencies and the strengthening of the
US dollar during the year.

Premiums decreased by $526 million to $10.8 billion in 2022 from $11.3 billion
in 2021, driven by lower pension group annuity premiums compared to the prior
year.

Net investment income increased by $94 million to $5.3 billion in 2022 from $5.2
billion in 2021, primarily driven by growth in our investment portfolio
attributed to strong inflows during the previous twelve months and higher
floating rate income related to higher short-term interest rates. These
increases were partially offset by less favorable alternative investment
performance and the transfer of a significant portion of our alternative
investments to AAA, a consolidated VIE, during the year as well as the favorable
prior year change in fair value of our investment in Apollo of $427 million,
which was distributed to AGM following the merger, lower new money rates
throughout 2021, higher investment management fees driven by the increase in our
investment portfolio and lower bond call income. As a result of purchase
accounting, the book value of our investment portfolio was marked up to fair
value resulting in an adverse impact to our net investment income.

VIE investment related gains and losses increased by $106 million to $59 million
in 2022 from $(47) million in 2021, primarily driven by an increase in
consolidated VIEs following our merger with Apollo as well as unrealized gains
on assets transferred to AAA.

Benefits and Expenses

Benefits and expenses decreased by $4.8 billion to $11.9 billion in 2022 from
$16.7 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
driven by a decrease in FIA embedded derivative liabilities.

Interest sensitive contract benefits decreased by $3.5 billion to $(573) million
in 2022 from $2.9 billion in 2021, primarily driven by a decrease in the change
in FIA fair value embedded derivatives of $4.0 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 resulting in a favorable impact to our interest
sensitive contract benefits. 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 a
decrease of 24.8% in 2022, compared to an increase of 14.7% in 2021, as well as
a favorable change in discount rates and favorable unlocking, partially offset
by unfavorable economics impacting policyholder projected benefits. The FIA fair
value embedded derivatives unlocking in 2022 was $41 million favorable due to
changes to projected interest crediting, partially offset by the impact of
higher rates on future account values.

Future policy and other policy benefits decreased by $1.3 billion to $11.0
billion in 2022 from $12.3 billion in 2021, primarily attributable to a decrease
in the change in rider reserves, lower pension group annuity obligations, a
decrease in the change in the AmerUs Closed Block fair value liability and
higher negative VOBA amortization resulting from purchase accounting. The
favorable change in rider reserves of $612 million was primarily driven by the
unfavorable change in reinsurance assets and net FIA derivatives. 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.

DAC, DSI and VOBA amortization decreased by $293 million to $375 million in 2022
from $668 million in 2021, primarily due to the unfavorable change in net FIA
derivatives as a result of the unfavorable equity market performance and impacts
from purchase accounting reflecting the removal of historical DAC and DSI,
partially offset by the establishment of a new VOBA asset.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Policy and other operating expenses increased by $286 million to $1.1 billion in
2022 from $795 million 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 several new
repurchase agreements, partially offset by the costs incurred in the prior year
related to our merger with Apollo.

Taxes

Income tax expense (benefit) decreased by $1.3 billion to $(1.1) billion in 2022
from $196 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 and mortgage loans. The
income tax expense for 2021 was driven by a favorable change in net FIA
derivatives and unrealized gains on our investment in Apollo, partially offset
by a $63 million out-of-period adjustment related to the correction of errors in
taxable income by jurisdiction as well as an unfavorable change in fair value of
reinsurance assets.

Our effective tax rate in 2022 was a benefit of 14% compared to an expense of 7%
in 2021. The effective tax rate in 2022 was due to the change in fair value of
reinsurance assets and mortgage loans subject to tax. Our effective tax rate in
2021 was dependent upon the relationship of income or loss subject to tax
compared to the consolidated income or loss before income taxes.

Noncontrolling Interests

Noncontrolling interests decreased by $2.3 billion to $(2.4) billion in 2022
from $(111) 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.

Summary of Non-GAAP Earnings

The following summarizes our spread related earnings:

                                                 Successor                        Predecessor                  Successor                        Predecessor
                                             Three months ended                Three months ended          Nine months ended                 Nine months ended
(In millions)                                September 30, 2022                September 30, 2021          September 30, 2022               September 30, 2021
Fixed income and other investment income,
net                                        $             1,471                $           1,340          $             3,980                $          

4,021

Alternative investment income                              250                              334                          884                           1,377
Net investment earnings                                  1,721                            1,674                        4,864                           5,398
Strategic capital management fees                           14                               11                           39                              28
Cost of funds                                             (966)                            (985)                      (2,678)                         (2,920)
Net investment spread                                      769                              700                        2,225                           2,506
Other operating expenses                                  (120)                             (86)                        (338)                           (261)
Interest and other financing costs                         (73)                             (66)                        (199)                           (190)
Spread related earnings                    $               576                $             548          $             1,688                $          2,055

Three Months Ended September 30, 2022 Compared to the Three Months Ended
September 30, 2021

Spread Related Earnings

SRE increased by $28 million, or 5%, to $576 million in 2022 from $548 million
in 2021. The increase in SRE was driven by higher net investment earnings and
lower cost of funds, partially offset by higher other operating expenses. Net
investment earnings increased $47 million primarily driven by $30.4 billion of
growth in our average net invested assets and higher floating rate income,
partially offset by unfavorable purchase accounting adjustments, less favorable
alternative investment performance compared to prior year, lower bond call
income and lower RMBS returns. Cost of funds decreased $19 million primarily
driven by favorable purchase accounting adjustments, an adjustment to exclude
the non-operating change in funding agreement reserves from SRE and favorable
unlocking, partially offset by growth in the block, an increase in rates on
recent funding agreement issuances and pension group annuity transactions,
higher rates on existing floating rate funding agreements and higher rates on
new deferred annuity business. 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.
Other operating expenses increased $34 million mainly due to significant growth
in the business.


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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Net Investment Spread
                                                                    Successor                            Predecessor
                                                               Three months ended                    Three months ended
                                                               September 30, 2022                    September 30, 2021
Fixed income and other investment earned rate                                 3.27  %                               3.49  %
Alternative investment earned rate                                            8.26  %                              16.28  %
Net investment earned rate                                                    3.58  %                               4.14  %
Strategic capital management fees                                             0.03  %                               0.03  %
Cost of funds                                                                 2.01  %                               2.44  %
Net investment spread                                                         1.60  %                               1.73  %



Net investment spread decreased 13 basis points to 1.60% in 2022 from 1.73% in
2021. Our net investment earned rate was 3.58% in 2022, a decrease from 4.14% in
2021, primarily due to less favorable performance in our alternative investment
portfolio compared to prior year as well as lower returns in our fixed and other
investment portfolio. Alternative net investment earned rate was 8.26% in 2022,
a decrease from 16.28% in 2021, primarily driven by unfavorable economics and
prior year outperformance, partially offset by strong returns on Foundation Home
Loans. The prior year outperformance was mainly due to strong returns on real
estate, natural resources and yield funds due to favorable economics. Fixed and
other net investment earned rate was 3.27% in 2022, a decrease from 3.49% in
2021, primarily driven by unfavorable purchase accounting impacts, lower bond
call income and lower RMBS returns, partially offset by favorable floating rate
income.

Cost of funds decreased by 43 basis points to 2.01% in 2022, from 2.44% in 2021,
primarily driven by favorable purchase accounting impacts, an adjustment to
exclude the non-operating change in funding agreement reserves from SRE and
unlocking, partially offset by higher cost of crediting rates on recent funding
agreement issuances, pension group annuity transactions and deferred annuity
products as well as higher rates on existing floating rate funding agreements.

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

Adjustments to net income (loss) available to AHL common shareholder are
comprised of investment gains (losses), net of offsets, non-operating change in
insurance liabilities and related derivatives, net of offsets, integration,
restructuring and other non-operating expenses and stock compensation expense.
The decrease in adjustments to net income (loss) available to AHL common
shareholder compared to 2021 was primarily driven by the decrease in investment
related gains and losses, higher non-operating expenses and the unfavorable
non-operating change in insurance liabilities and related derivatives, net of
offsets. Investment related gains and losses, net of offsets, were unfavorable
$1.8 billion primarily due to the changes in fair value of reinsurance assets
and mortgage loan assets as well as realized losses on the sale of AFS
securities related to unfavorable economics in the current period. The
unfavorable changes in fair value of reinsurance assets of $1.0 billion and
mortgage loans were primarily due to a larger increase in US Treasury rates as
well as credit spread widening in the current year. 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 an allowance for credit losses. The increase in non-operating
expenses of $29 million was primarily due to the amortization of newly
established intangible assets as a result of the merger. The non-operating
change in insurance liabilities and related derivatives, net of offsets was
unfavorable $6 million due to an adjustment to exclude the non-operating change
in funding agreement reserves from SRE, partially offset by the favorable net
change in FIA derivatives. The change in net FIA derivatives was primarily due
to the favorable change in discount rates and favorable unlocking, partially
offset by unfavorable performance of the equity indices to which our FIA
policies are linked, primarily the S&P 500 index, which experienced a decrease
of 5.3% in 2022, compared to an increase of 0.2% in 2021. FIA embedded
derivative unlocking, net of DAC, DSI, rider reserve and noncontrolling interest
offsets, was favorable by $37 million primarily due to changes to projected
interest crediting, partially offset by the impact of higher rates on future
account values.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Nine Months Ended September 30, 2022 Compared to the Nine Months Ended September
30, 2021

Spread Related Earnings

SRE decreased by $367 million, or 18%, to $1.7 billion in 2022 from $2.1 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 $534 million primarily driven by unfavorable
purchase accounting adjustments, less favorable alternative investment
performance compared to prior year, lower bond call income and lower RMBS
returns, partially offset by $30.1 billion of growth in our average net invested
assets and higher floating rate income. Other operating expenses increased $77
million mainly due to significant growth in the business. Cost of funds
decreased $242 million primarily driven by favorable purchase accounting
adjustments, actuarial experience and unlocking, partially offset by growth in
the block of business, higher rates on existing floating rate funding
agreements, growth in the institutional block of business at higher crediting
rates 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.

Net Investment Spread
                                                                    Successor                            Predecessor
                                                                Nine months ended                     Nine months ended
                                                               September 30, 2022                    September 30, 2021
Fixed income and other investment earned rate                                 3.03  %                               3.60  %
Alternative investment earned rate                                           10.30  %                              23.56  %
Net investment earned rate                                                    3.47  %                               4.59  %
Strategic capital management fees                                             0.03  %                               0.02  %
Cost of funds                                                                 1.91  %                               2.48  %
Net investment spread                                                         1.59  %                               2.13  %



Net investment spread decreased 54 basis points to 1.59% in 2022 from 2.13% in
2021. Our net investment earned rate was 3.47% in 2022, a decrease from 4.59% in
2021, primarily due to less favorable performance in our alternative investment
portfolio compared to prior year as well as lower returns in our fixed and other
investment portfolio. Alternative net investment earned rate was 10.30% in 2022,
a decrease from 23.56% in 2021, primarily driven by significant outperformance
in the prior year, partially offset by strong returns on real estate 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 and
higher Venerable returns attributed to a valuation increase driven by a
reinsurance agreement with Equitable Financial Life Insurance Company. Fixed and
other net investment earned rate was 3.03% in 2022, a decrease from 3.60% in
2021, primarily driven by unfavorable purchase accounting impacts, lower new
money rates throughout 2021, lower bond call income and lower RMBS returns,
partially offset by favorable floating rate income.

Cost of funds decreased by 57 basis points to 1.91% in 2022, from 2.48% in 2021,
primarily driven by favorable purchase accounting adjustments, actuarial
experience and unlocking, partially offset by higher rates on existing floating
rate funding agreements, growth in the institutional block of business at higher
crediting rates 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, non-operating change in insurance liabilities and
related derivatives, net of offsets and higher non-operating expenses.
Investment related gains and losses, net of offsets, were unfavorable $7.3
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 $427 million, which was distributed to AGM following the
merger, realized losses on the sale of AFS securities related to unfavorable
economics in the current year and the change in the provision for credit losses.
The unfavorable changes in fair value of reinsurance assets of $4.0 billion and
mortgage loans was 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 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 an allowance for credit
losses. The unfavorable change in the provision for credit losses of $176
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. Non-operating change in insurance
liabilities and related derivatives, net of offsets were unfavorable $888
million primarily due to the unfavorable 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 24.8% in
2022, compared to an increase of 14.7% in 2021, as well as unfavorable economics
impacting the policyholder projected benefits, partially offset by the favorable
change in discount rates and favorable unlocking. FIA embedded derivative
unlocking, net of DAC, DSI, rider reserve and noncontrolling interest offsets,
was favorable by $37 million primarily due to changes to projected interest
crediting, partially offset by the impact of higher rates on future account
values. The increase in non-operating expenses of $40 million was primarily due
to the amortization of newly established intangible assets as a result of the
merger, partially offset by the costs incurred in the prior year related to our
merger with Apollo.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Investment Portfolio
We had consolidated investments, including related parties and VIEs, of $200.4
billion and $212.5 billion as of September 30, 2022 and December 31, 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, 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 illiquid liability profile by identifying investment opportunities
with an emphasis on earning incremental yield by taking liquidity and complexity
risk rather than assuming solely 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
corporate bonds and more structured, but highly rated asset classes. 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 condensed consolidated statements of income (loss)
included management fees under our investment management arrangements with
Apollo. We incurred management fees, inclusive of base and sub-allocation fees,
of $195 million and $146 million, respectively, during the three months ended
September 30, 2022 and 2021, and $563 million and $430 million, respectively,
during the nine months ended September 30, 2022, and 2021. The total amounts we
incurred, directly and indirectly, from Apollo and its affiliates were $275
million, and $218 million, respectively, for the three months ended September
30, 2022 and 2021, and $823 million and $681 million, respectively, for the nine
months ended September 30, 2022, and 2021. 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
total 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 $195.2 billion and $175.3 billion as
of September 30, 2022 and December 31, 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. In
addition, our investment portfolio is constrained by its scenario-based capital
ratio limit and its stressed liquidity limit.

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Item 2. 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
                                                       September 30, 2022                                  December 31, 2021
                                                 Carrying            Percent of                   Carrying Value            Percent of
(In millions, except percentages)                  Value                Total                                                  Total
AFS securities, at fair value                  $   93,593                  46.7  %             $         100,159                  47.1  %
Trading securities, at fair value                   1,590                   0.8  %                         2,056                   1.0  %
Equity securities                                   1,607                   0.8  %                         1,170                   0.5  %
Mortgage loans                                     25,145                  12.5  %                        20,748                   9.8  %
Investment funds                                       29                     -  %                         1,178                   0.6  %
Policy loans                                          353                   0.2  %                           312                   0.1  %
Funds withheld at interest                         34,706                  17.3  %                        43,907                  20.7  %
Derivative assets                                   4,065                   2.0  %                         4,387                   2.1  %
Short-term investments                                318                   0.2  %                           139                   0.1  %
Other investments                                     682                   0.3  %                         1,473                   0.7  %
Total investments                                 162,088                  80.8  %                       175,529                  82.7  %
Investments in related parties
AFS securities, at fair value                       9,205                   4.6  %                        10,402                   4.9  %
Trading securities, at fair value                     905                   0.5  %                         1,781                   0.8  %
Equity securities, at fair value                      340                   0.2  %                           284                   0.1  %
Mortgage loans                                      1,331                   0.7  %                         1,360                   0.6  %
Investment funds                                    1,272                   0.6  %                         7,391                   3.5  %
Funds withheld at interest                          9,961                   5.0  %                        12,207                   5.7  %

Other investments                                     274                   0.1  %                           222                   0.1  %
Total related party investments                    23,288                  11.7  %                        33,647                  15.7  %
Total investments including related parties       185,376                  92.5  %                       209,176                  98.4  %
Investments owned by consolidated VIEs
Trading securities, at fair value                     988                   0.5  %                             -                     -  %
Equity securities, at fair value                       15                     -  %                             -                     -  %
Mortgage loans                                      2,000                   1.0  %                         2,040                   1.0  %
Investment funds, at fair value                    11,885                   5.9  %                         1,297                   0.6  %
Other investments, at fair value                      152                   0.1  %                             -                     -  %
Total investments owned by consolidated VIEs       15,040                   7.5  %                         3,337                   1.6  %
Total investments including related parties
and VIEs                                       $  200,416                 100.0  %             $         212,513                 100.0  %



The decrease in our total investments, including related parties and VIEs, as of
September 30, 2022 of $12.1 billion compared to December 31, 2021 was primarily
driven by unrealized losses on AFS securities in the nine months ended September
30, 2022 of $20.4 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. This was partially offset by growth from gross
organic inflows of $36.6 billion in excess of gross liability outflows of $16.8
billion as well as an increase in investments from the consolidation of
additional VIEs in conjunction with our merger with Apollo.

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 2. 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 that employ various strategies including real estate and other real asset
funds, credit funds and private equity 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 index 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, investment funds and funds withheld at interest
reinsurance receivables which are primarily a result of investments over which
Apollo can exercise influence. As of September 30, 2022, these investments
totaled $34.6 billion, or 14.6% 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
Financial. In each case, the underlying collateral, borrower or other credit
party is generally unaffiliated with us. Related party investment funds include
strategic investments in direct origination platforms and insurance companies
and investments in Apollo managed funds. The funds withheld at interest related
party amounts are primarily 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.

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

                                                             Successor                                         Predecessor
                                                         September 30, 2022                                 December 31, 2021
                                                   Carrying           Percent of                                            Percent of
(In millions, except percentages)                   Value            Total Assets                 Carrying Value           Total Assets
Venerable funds withheld reinsurance portfolio   $   9,961                   4.2  %             $         12,207                   5.2  %
Securitizations of unaffiliated assets where
Apollo is manager                                   11,014                   4.7  %                        9,495                   4.0  %
Investments in Apollo funds                          6,447                   2.7  %                        3,785                   1.6  %
Strategic investments in Apollo direct
origination platforms                                4,801                   2.0  %                        5,704                   2.4  %
Strategic investment in Apollo                           -                     -  %                        2,112                   0.9  %
Strategic investments in insurance companies         2,329                   1.0  %                        1,626                   0.7  %
Other                                                    1                     -  %                           17                     -  %
Total related party investments                  $  34,553                  14.6  %             $         34,946                  14.8  %



As of September 30, 2022, a $10.0 billion funds withheld reinsurance asset with
Venerable was included in our GAAP related party assets. Venerable is a related
party due to our minority equity investment in its holding company's parent, VA
Capital. For 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
September 30, 2022, $28.4 billion, or 14.6% 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 $13.6 billion, or 7.0% of our
net invested assets.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

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

                                                              Successor                                        Predecessor
                                                         September 30, 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                                $  14,777                    7.6  %             $       13,736                    7.8  %
Investments in Apollo funds                          6,446                    3.3  %                      3,802                    2.2  %
Strategic investments in Apollo direct
origination platforms                                4,801                    2.5  %                      6,074                    3.5  %
Strategic investment in Apollo                           -                      -  %                      2,112                    1.2  %
Strategic investments in insurance companies         2,329                    1.2  %                      1,626                    0.9  %
Other                                                    1                      -  %                         17                      -  %
Total related party investments                  $  28,354                   14.6  %             $       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 condensed 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 credit loss expense within investment related gains (losses) on
the condensed consolidated statements of income (loss).

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

                                                                                                    Successor
                                                                                               September 30, 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               $         3,229          $           -          $              -          $     (731)         $    2,498                 2.4  %
US state, municipal and political
subdivisions                                       1,217                      -                         -                (297)                920                 0.9  %
Foreign governments                                1,208                    (27)                        2                (322)                861                 0.8  %
Corporate                                         72,556                    (66)                       50             (15,632)             56,908                55.4  %
CLO                                               16,235                     (5)                        3              (2,087)             14,146                13.8  %
ABS                                               10,691                    (13)                        8                (814)              9,872                 9.6  %
CMBS                                               3,462                     (3)                        -                (396)              3,063                 3.0  %
RMBS                                               6,248                   (321)                        7                (609)              5,325                 5.2  %
Total AFS securities                             114,846                   (435)                       70             (20,888)             93,593                91.1  %
AFS securities - related party
Corporate                                          1,076                      -                         3                 (57)              1,022                 1.0  %
CLO                                                3,047                     (1)                        -                (415)              2,631                 2.5  %
ABS                                                5,825                      -                         1                (274)              5,552                 5.4  %
Total AFS securities - related party               9,948                     (1)                        4                (746)              9,205                 8.9  %
Total AFS securities including related
party                                    $       124,794          $        (436)         $             74          $  (21,634)         $  102,798               100.0  %


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of Operations

                                                                                                    Predecessor
                                                                                                 December 31, 2021
                                           Amortized Cost          Allowance for           Unrealized Gains           Unrealized           Fair Value          Percent of
(In millions, except percentages)                                  Credit Losses                                        Losses                                    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 party
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 party              10,401                      -                         85                   (84)             10,402                 9.4  %
Total AFS securities including related
party                                    $       106,859          $        (123)         $           4,893          $     (1,068)         $  110,561               100.0  %



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Item 2. 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
                                                            September 30, 2022                                  December 31, 2021
                                                     Fair Value           Percent of                     Fair Value              Percent of
(In millions, except percentages)                                            Total                                                  Total
Corporate
Industrial other1                                  $    19,013                  18.5  %             $          23,882                  21.6  %
Financial                                               20,548                  20.0  %                        21,537                  19.5  %
Utilities                                               11,877                  11.6  %                        14,290                  12.9  %
Communication                                            2,913                   2.8  %                         3,492                   3.2  %
Transportation                                           3,579                   3.5  %                         3,884                   3.5  %
Total corporate                                         57,930                  56.4  %                        67,085                  60.7  %
Other government-related securities
US state, municipal and political subdivisions             920                   0.9  %                         1,213                   1.1  %
Foreign governments                                        861                   0.8  %                         1,128                   1.0  %
US government and agencies                               2,498                   2.4  %                           223                   0.2  %
Total non-structured securities                         62,209                  60.5  %                        69,649                  63.0  %
Structured securities
CLO                                                     16,777                  16.3  %                        16,201                  14.7  %
ABS                                                     15,424                  15.0  %                        15,983                  14.4  %
CMBS                                                     3,063                   3.0  %                         2,758                   2.5  %
RMBS
Agency                                                      13                     -  %                            23                     -  %
Non-agency                                               5,312                   5.2  %                         5,947                   5.4  %
Total structured securities                             40,589                  39.5  %                        40,912                  37.0  %
Total AFS securities including related party       $   102,798                 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 $102.8
billion and $110.6 billion as of September 30, 2022 and December 31, 2021,
respectively. The decrease was mainly driven by unrealized losses on AFS
securities in the nine months ended September 30, 2022 of $20.4 billion
attributed to an increase in US Treasury rates and credit spread widening,
partially offset by growth from organic inflows in excess of liability outflows.

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



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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. In order 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
                                                          September 30, 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                                 $        62,408          $   52,035                 50.6  %             $        49,639          $   51,514                 46.6  %
2 A-C                                          56,832              46,096                 44.8  %                      51,587              53,398                 48.3  %
Total investment grade                        119,240              98,131                 95.4  %                     101,226             104,912                 94.9  %
3 A-C                                           4,018               3,418                  3.3  %                       4,199               4,247                  3.8  %
4 A-C                                           1,059                 917                  0.9  %                       1,113               1,100                  1.0  %
5 A-C                                              98                  82                  0.2  %                          94                  88                  0.1  %
6                                                 379                 250                  0.2  %                         227                 214                  0.2  %
Total below investment grade                    5,554               4,667                  4.6  %                       5,633               5,649                  5.1  %
Total AFS securities including
related party                         $       124,794          $  102,798                100.0  %             $       106,859          $  110,561                100.0  %

A significant majority of our AFS portfolio, 95.4% and 94.9% as of September 30,
2022 and December 31, 2021, respectively, was invested in assets considered
investment grade with an NAIC designation of 1 or 2.

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of Operations

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

                                                                 Successor                                           Predecessor
                                                            September 30, 2022                                    December 31, 2021
                                                     Fair Value             Percent of                     Fair Value              Percent of
(In millions, except percentages)                                              Total                                                  Total
NRSRO rating agency designation
AAA/AA/A                                          $       45,946                  44.7  %             $          44,501                  40.2  %
BBB                                                       41,975                  40.8  %                        47,636                  43.1  %
Non-rated1                                                 8,369                   8.1  %                        10,754                   9.7  %
Total investment grade                                    96,290                  93.6  %                       102,891                  93.0  %
BB                                                         3,116                   3.0  %                         3,713                   3.4  %
B                                                            722                   0.7  %                           946                   0.9  %
CCC                                                        1,085                   1.1  %                         1,356                   1.2  %
CC and lower                                                 619                   0.6  %                           755                   0.7  %
Non-rated1                                                   966                   1.0  %                           900                   0.8  %
Total below investment grade                               6,508                   6.4  %                         7,670                   7.0  %
Total AFS securities including related party      $      102,798                 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 6.4% and 7.0% as of September 30, 2022 and
December 31, 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 September 30, 2022 and December 31, 2021, non-rated securities were
comprised of 72% and 73%, respectively, of corporate private placement
securities for which we have not sought individual ratings from an NRSRO, and
18% and 17% for September 30, 2022 and December 31, 2021, 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 September 30, 2022 and December 31, 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 $15.4 billion and $16.0
billion as of September 30, 2022 and December 31, 2021, respectively.
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of Operations

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

                                                            Successor                                         Predecessor
                                                        September 30, 2022                                 December 31, 2021
                                                 Fair Value          Percent of                    Fair Value              Percent of
(In millions, except percentages)                                       Total                                                 Total
NAIC designation
1 A-G                                           $   8,826                  57.2  %             $          8,089                  50.6  %
2 A-C                                               5,907                  38.3  %                        7,047                  44.1  %
Total investment grade                             14,733                  95.5  %                       15,136                  94.7  %
3 A-C                                                 504                   3.3  %                          643                   4.0  %
4 A-C                                                 165                   1.1  %                          200                   1.3  %
5 A-C                                                  15                   0.1  %                            4                     -  %
6                                                       7                     -  %                            -                     -  %
Total below investment grade                          691                   4.5  %                          847                   5.3  %
Total AFS ABS including related party           $  15,424                 100.0  %             $         15,983                 100.0  %

NRSRO rating agency designation
AAA/AA/A                                        $   8,820                  57.2  %             $          7,892                  49.4  %
BBB                                                 5,859                  38.0  %                        6,975                  43.5  %
Non-rated                                              47                   0.3  %                          232                   1.5  %
Total investment grade                             14,726                  95.5  %                       15,099                  94.4  %
BB                                                    511                   3.3  %                          680                   4.3  %
B                                                     165                   1.1  %                          200                   1.3  %
CCC                                                    15                   0.1  %                            4                     -  %
CC and lower                                            7                     -  %                            -                     -  %
Non-rated                                               -                     -  %                            -                     -  %
Total below investment grade                          698                   4.5  %                          884                   5.6  %
Total AFS ABS including related party           $  15,424                 100.0  %             $         15,983                 100.0  %



As of September 30, 2022 and December 31, 2021, a substantial majority of our
AFS ABS portfolio, 95.5% and 94.7%, respectively, was invested in assets
considered to be investment grade based upon application of the NAIC's
methodology and 95.5% and 94.4%, respectively, of securities were considered
investment grade based on NRSRO ratings.

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of Operations

Collateralized Loan Obligations - We also invest in CLOs which pay principal and
interest from cash flows received from underlying corporate loans. These
holdings were $16.8 billion and $16.2 billion as of September 30, 2022 and
December 31, 2021, respectively.

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

                                                            Successor                                         Predecessor
                                                        September 30, 2022                                 December 31, 2021
                                                 Fair Value          Percent of                    Fair Value              Percent of
(In millions, except percentages)                                       Total                                                 Total
NAIC designation
1 A-G                                           $  10,522                  62.7  %             $          9,957                  61.5  %
2 A-C                                               6,125                  36.5  %                        6,096                  37.6  %
Total investment grade                             16,647                  99.2  %                       16,053                  99.1  %
3 A-C                                                 113                   0.7  %                          124                   0.8  %
4 A-C                                                  17                   0.1  %                           24                   0.1  %
5 A-C                                                   -                     -  %                            -                     -  %
6                                                       -                     -  %                            -                     -  %
Total below investment grade                          130                   0.8  %                          148                   0.9  %
Total AFS CLO including related parties         $  16,777                 100.0  %             $         16,201                 100.0  %

NRSRO rating agency designation
AAA/AA/A                                        $  10,403                  62.0  %             $          9,943                  61.4  %
BBB                                                 6,121                  36.5  %                        6,101                  37.6  %
Non-rated                                             123                   0.7  %                            -                     -  %
Total investment grade                             16,647                  99.2  %                       16,044                  99.0  %
BB                                                    113                   0.7  %                          130                   0.8  %
B                                                      17                   0.1  %                           27                   0.2  %
CCC                                                     -                     -  %                            -                     -  %
CC and lower                                            -                     -  %                            -                     -  %
Non-rated                                               -                     -  %                            -                     -  %
Total below investment grade                          130                   0.8  %                          157                   1.0  %
Total AFS CLO including related parties         $  16,777                 100.0  %             $         16,201                 100.0  %



As of September 30, 2022 and December 31, 2021, 99.2% 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.

Commercial Mortgage-backed Securities - A portion of our AFS portfolio is
invested in CMBS. CMBS are constructed from pools of commercial mortgages. These
holdings were $3.1 billion and $2.8 billion as of September 30, 2022 and
December 31, 2021, respectively. As of September 30, 2022 and December 31, 2021,
our CMBS portfolio included $2.5 billion (83% of the total) and $2.0 billion
(74% of the total), respectively, of securities that are considered investment
grade based on NAIC designations, while $2.4 billion (77% 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 $5.3 billion and $6.0 billion as of September 30,
2022 and December 31, 2021, respectively.

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

                                                            Successor                                        Predecessor
                                                       September 30, 2022                                 December 31, 2021
                                                Fair Value          Percent of                    Fair Value              Percent of
(In millions, except percentages)                                      Total                                                 Total
NAIC designation
1 A-G                                           $  4,214                  79.1  %             $          5,097                  85.4  %
2 A-C                                                597                  11.2  %                          331                   5.5  %
Total investment grade                             4,811                  90.3  %                        5,428                  90.9  %
3 A-C                                                236                   4.4  %                          327                   5.5  %
4 A-C                                                236                   4.4  %                          172                   2.9  %
5 A-C                                                 30                   0.7  %                           29                   0.5  %
6                                                     12                   0.2  %                           14                   0.2  %
Total below investment grade                         514                   9.7  %                          542                   9.1  %
Total AFS RMBS                                  $  5,325                 100.0  %             $          5,970                 100.0  %

NRSRO rating agency designation
AAA/AA/A                                        $  1,166                  21.9  %             $          1,110                  18.6  %
BBB                                                  665                  12.5  %                          522                   8.7  %
Non-rated1                                         1,334                  25.1  %                        1,648                  27.6  %
Total investment grade                             3,165                  59.5  %                        3,280                  54.9  %
BB                                                    78                   1.5  %                          184                   3.1  %
B                                                    119                   2.2  %                          193                   3.2  %
CCC                                                1,003                  18.8  %                        1,281                  21.5  %
CC and lower                                         594                  11.2  %                          733                  12.3  %
Non-rated1                                           366                   6.8  %                          299                   5.0  %
Total below investment grade                       2,160                  40.5  %                        2,690                  45.1  %
Total AFS RMBS                                  $  5,325                 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, 90.3% and 90.9% as of
September 30, 2022 and December 31, 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, as of September 30, 2022 and December 31, 2021, NRSRO
characterized 59.5% and 54.9%, respectively, of our RMBS portfolio as investment
grade.

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 September 30, 2022, our AFS securities,
including related parties, had a fair value of $102.8 billion, which was 17.6%
below amortized cost of $124.8 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 September 30, 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 2. 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 party, for which an allowance for credit losses has not been
recorded, by NAIC designations:

                                                                                              Successor
                                                                                         September 30, 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                          $       58,292          $    (9,945)         $         48,347                    82.9  %       $     52,035                    (19.1) %
2 A-C                                  54,512              (10,655)                   43,857                    80.5  %             46,096                    (23.1) %
Total investment grade                112,804              (20,600)                   92,204                    81.7  %             98,131                    (21.0) %
3 A-C                                   3,632                 (545)                    3,087                    85.0  %              3,418                    (15.9) %
4 A-C                                     659                  (89)                      570                    86.5  %                917                     (9.7) %
5 A-C                                      78                  (11)                       67                    85.9  %                 82                    (13.4) %
6                                         201                  (38)                      163                    81.1  %                250                    (15.2) %
Total below investment grade            4,570                 (683)                    3,887                    85.1  %              4,667                    (14.6) %
Total                          $      117,374          $   (21,283)         $         96,091                    81.9  %       $    102,798                    (20.7) %



                                                                                               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 party, were
$21.3 billion and $941 million as of September 30, 2022 and December 31, 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.

As of September 30, 2022 and December 31, 2021, we held $6.0 billion and $7.4
billion, respectively, in energy sector fixed maturity securities, or 6% and 7%,
respectively, of the total fixed maturity securities, including related party.
The gross unrealized capital losses on these securities were $1.5 billion and
$35 million, or 7% and 4% of the total unrealized losses, respectively. The
increase in unrealized losses on energy sector fixed maturity securities was
primarily attributed to an increase in US Treasury rates and credit spread
widening.

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 condensed consolidated
financial statements, as well as Critical Accounting Estimates and Judgments in
this Item 2.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

As of September 30, 2022 and December 31, 2021, we held an allowance for credit
losses on AFS securities of $436 million and $123 million, respectively. During
the nine months ended September 30, 2022, we recorded a change in provision for
credit losses on AFS securities of $125 million, of which $149 million had an
income statement impact and $(24) million 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 nine
months ended September 30, 2021, we recorded a change in provision for credit
losses on AFS securities of $12 million of which $15 million had an income
statement impact and $(3) million related to PCD securities and other changes.
The intent-to-sell impairments for the nine months ended September 30, 2022 and
2021 were $38 million and $3 million, respectively.

International Exposure

A portion of our AFS securities are invested in securities with international
exposure. As of September 30, 2022 and December 31, 2021, 35% 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
                                                       September 30, 2022                                                    December 31, 2021
                                    Amortized Cost           Fair Value           Percent of                Amortized           Fair Value           Percent of
(In millions, except percentages)                                                   Total                      Cost                                    Total
Country
Ireland                           $         5,414          $     4,118                 11.5  %             $   5,172          $     5,052                 13.0  %
Other Europe                               10,268                7,540                 21.1  %                 8,864                9,218                 23.7  %
Total Europe                               15,682               11,658                 32.6  %                14,036               14,270                 36.7  %
Non-US North America                       19,462               17,359                 48.6  %                17,218               17,387                 44.8  %
Australia & New Zealand                     2,847                2,340                  6.6  %                 2,441                2,557                  6.6  %
Central & South America                     1,706                1,378                  3.9  %                 1,347                1,346                  3.5  %
Africa & Middle East                        2,256                1,865                  5.2  %                 1,966                2,019                  5.2  %
Asia/Pacific                                1,541                1,124                  3.1  %                 1,256                1,262                  3.2  %

Total                             $        43,494          $    35,724                100.0  %             $  38,264          $    38,841                100.0  %



Approximately 97.1% and 96.7% of these securities are investment grade by NAIC
designation as of September 30, 2022 and December 31, 2021. As of September 30,
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 24% 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 September 30, 2022, we held Russian AFS securities of $34 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 September 30, 2022 and December 31, 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 Financial 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 Financial 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 2. 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
                                                   September 30, 2022                                  December 31, 2021
                                                                                              Net Carrying
(In millions, except percentages)          Fair Value         Percent of Total                   Value             Percent of Total
Property type
Office building                          $     4,730                    16.6  %             $       4,870                    20.1  %
Retail                                         1,411                     5.0  %                     2,022                     8.4  %
Apartment                                      5,935                    20.8  %                     4,626                    19.2  %
Hotels                                         1,818                     6.5  %                     1,727                     7.2  %
Industrial                                     1,726                     6.1  %                     2,336                     9.7  %
Other commercial1                              3,287                    11.4  %                     1,316                     5.4  %
Total net commercial mortgage loans           18,907                    66.4  %                    16,897                    70.0  %
Residential loans                              9,569                    33.6  %                     7,251                    30.0  %
Total mortgage loans, including related
parties and VIEs                         $    28,476                   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 $28.5 billion and $24.1 billion as of September 30, 2022
and December 31, 2021, respectively. This included $1.6 billion and $1.9 billion
of mezzanine mortgage loans as of September 30, 2022 and December 31, 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
condensed consolidated statements of income (loss). Changes in the fair value of
the mortgage loan portfolio are reported in investment related gains (losses) on
the condensed 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 September 30, 2022 and December 31, 2021, we had $463 million and $990
million, respectively, of mortgage loans that were 90 days past due, of which
$109 million and $54 million, respectively, were in the process of foreclosure.
As of September 30, 2022 and December 31, 2021, $257 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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of Operations

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

                                                            Successor                                         Predecessor
                                                        September 30, 2022                                 December 31, 20211
                                                  Carrying           Percent of                                             Percent of
(In millions, except percentages)                  Value                Total                     Carrying Value               Total
Investment funds

Equity                                          $       5                     -  %             $             410                   4.2  %
Hybrid                                                 20                   0.2  %                           667                   6.7  %
Yield                                                   4                     -  %                            99                   1.0  %
Other                                                   -                     -  %                             2                     -  %
Total investment funds                                 29                   0.2  %                         1,178                  11.9  %
Investment funds - related parties
Strategic origination platforms                        68                   0.5  %                         1,338                  13.6  %
Strategic insurance platforms                       1,048                   8.0  %                         1,440                  14.6  %
Apollo and other fund investments
Equity                                                135                   1.0  %                         1,199                  12.1  %
Hybrid                                                  -                     -  %                           952                   9.6  %
Yield                                                   4                     -  %                           305                   3.1  %
Other2                                                 17                   0.2  %                         2,157                  21.9  %
Total investment funds - related parties            1,272                   9.7  %                         7,391                  74.9  %
Investment funds owned by consolidated VIEs
Strategic origination platforms                     4,524                  34.3  %                           264                   2.7  %
Strategic insurance platforms                         545                   4.1  %                             -                     -  %
Apollo and other fund investments
Equity                                              2,568                  19.5  %                           229                   2.3  %
Hybrid                                              3,183                  24.1  %                            56                   0.6  %
Yield                                                 985                   7.5  %                           748                   7.6  %
Other                                                  80                   0.6  %                             -                     -  %
Total investment funds owned by consolidated
VIEs                                               11,885                  90.1  %                         1,297                  13.2  %
Total investment funds, including related
parties and VIEs                                $  13,186                 100.0  %             $           9,866                 100.0  %

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 $13.2 billion and $9.9 billion, respectively, as of September 30,
2022 and December 31, 2021. See Note 3 - Investments to the condensed
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 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 September 30, 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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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 condensed 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
                                                        September 30, 2022                                 December 31, 2021
                                                  Carrying           Percent of                                            Percent of
(In millions, except percentages)                  Value                Total                    Carrying Value               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                                   386                   0.9  %                          553                   1.0  %
Corporate                                          20,301                  45.5  %                       26,143                  46.5  %
CLO                                                 4,062                   9.1  %                        5,322                   9.5  %
ABS                                                 6,318                  14.1  %                        7,951                  14.2  %
CMBS                                                1,225                   2.7  %                        1,661                   3.0  %
RMBS                                                1,234                   2.8  %                        1,586                   2.8  %
Equity securities                                     387                   0.9  %                          243                   0.4  %
Mortgage loans                                      8,356                  18.7  %                        9,437                  16.8  %
Investment funds                                    1,161                   2.6  %                        1,807                   3.2  %
Derivative assets                                     197                   0.4  %                          208                   0.4  %
Short-term investments                                272                   0.6  %                           54                   0.1  %

Cash and cash equivalents                             960                   2.1  %                        1,049                   1.9  %
Other assets and liabilities                         (455)                 (1.0) %                         (288)                 (0.5) %
Total funds withheld at interest including
related parties                                 $  44,667                 100.0  %             $         56,114                 100.0  %



As of September 30, 2022 and December 31, 2021, we held $44.7 billion and $56.1
billion, respectively, of funds withheld at interest receivables, including
related party. Approximately 93.8% and 93.5% of the fixed maturity securities
within the funds withheld at interest are investment grade by NAIC designation
as of September 30, 2022 and December 31, 2021, respectively. The decrease in
funds withheld at interest, including related parties, was primarily driven by
unrealized losses in the nine months ended September 30, 2022 attributed to an
increase in US Treasury rates and credit spread widening as well as run-off of
the underlying blocks of business.

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
condensed 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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of Operations

Net Invested Assets

The following summarizes our net invested assets:

                                                        Successor                                           Predecessor
                                                    September 30, 2022                                   December 31, 2021
                                           Net Invested        Percent of Total                Net Invested          Percent of Total
(In millions, except percentages)          Asset Value1                                        Asset Value1
Corporate                                 $    81,912                    42.0  %             $       75,163                    42.9  %
CLO                                            19,249                     9.9  %                     17,892                    10.2  %
Credit                                        101,161                    51.9  %                     93,055                    53.1  %
CML                                            23,793                    12.2  %                     21,438                    12.2  %
RML                                             9,818                     5.0  %                      7,116                     4.1  %
RMBS                                            7,063                     3.6  %                      6,969                     4.0  %
CMBS                                            3,859                     2.0  %                      3,440                     2.0  %
Real estate                                    44,533                    22.8  %                     38,963                    22.3  %
ABS                                            20,154                    10.3  %                     20,376                    11.6  %
Alternative investments                        12,335                     6.3  %                      9,873                     5.6  %
State, municipal, political subdivisions
and foreign government                          2,723                     1.4  %                      2,505                     1.4  %
Equity securities                               1,823                     0.9  %                        754                     0.4  %
Short-term investments                            452                     0.2  %                        111                     0.1  %
US government and agencies                      2,649                     1.4  %                        212                     0.1  %
Other investments                              40,136                    20.5  %                     33,831                    19.2  %
Cash and equivalents                            7,161                     3.7  %                      6,086                     3.5  %
Policy loans and other                          2,166                     1.1  %                      1,296                     0.7  %
Net invested assets excluding investment
in Apollo                                     195,157                   100.0  %                    173,231                    98.8  %
Investment in Apollo                                -                       -  %                      2,112                     1.2  %
Net invested assets                       $   195,157                   100.0  %             $      175,343                   100.0  %

1 See Key Operating and Non-GAAP Measures for the definition of net invested assets.

Our net invested assets were $195.2 billion and $175.3 billion as of
September 30, 2022 and December 31, 2021, respectively. Corporate securities
included $24.9 billion of private placements, which represented 12.8% of our net
invested assets. The increase in net invested assets as of September 30, 2022
from December 31, 2021 was primarily driven by growth from net organic inflows
of $29.2 billion in excess of net liability outflows of $13.9 billion, purchase
accounting adjustments resulting in an increase in book value as our investment
portfolio was marked up to fair value and an increase in valuation of several
alternative investments, 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 condensed 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 adjust
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 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Net Alternative Investments

The following summarizes our net alternative investments:

                                                        Successor                                          Predecessor
                                                   September 30, 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                             $      713                     5.8  %             $          590                     6.0  %
Redding Ridge                                    680                     5.5  %                        217                     2.2  %
NNN Lease                                        670                     5.5  %                        637                     6.5  %
MidCap Financial                                 643                     5.2  %                        666                     6.7  %
Foundation Home Loans                            290                     2.4  %                          -                       -  %
PK AirFinance                                    286                     2.3  %                        316                     3.2  %
Aqua Finance                                     262                     2.1  %                          -                       -  %
Other                                            281                     2.3  %                         99                     1.0  %
Total strategic origination platforms          3,825                    31.1  %                      2,525                    25.6  %
Strategic retirement services platforms
Athora                                           912                     7.4  %                        743                     7.5  %
Catalina                                         431                     3.5  %                        442                     4.6  %
FWD                                              400                     3.2  %                        400                     4.1  %
Challenger                                       246                     2.0  %                        232                     2.3  %
Venerable                                        232                     1.9  %                        219                     2.2  %
Other                                             77                     0.6  %                        133                     1.3  %
Total strategic retirement services
platforms                                      2,298                    18.6  %                      2,169                    22.0  %
Apollo and other fund investments
Equity
Real estate                                    1,180                     9.6  %                      1,105                    11.2  %
Traditional private equity                     1,029                     8.3  %                        689                     7.0  %
Other                                            192                     1.5  %                        309                     3.1  %
Total equity                                   2,401                    19.4  %                      2,103                    21.3  %
Hybrid
Real estate                                    1,349                    11.0  %                        809                     8.2  %
Other                                          1,456                    11.8  %                      1,282                    13.0  %
Total hybrid                                   2,805                    22.8  %                      2,091                    21.2  %
Yield                                            951                     7.7  %                        773                     7.8  %
Total Apollo and other fund investments        6,157                    49.9  %                      4,967                    50.3  %
Other                                             55                     0.4  %                        212                     2.1  %
Net alternative investments               $   12,335                   100.0  %             $        9,873                   100.0  %

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

Net alternative investments were $12.3 billion and $9.9 billion as of
September 30, 2022 and December 31, 2021, respectively, representing 6.3% and
5.6% of our net invested assets portfolio as of September 30, 2022 and
December 31, 2021, respectively. The increase in net alternative investments was
primarily driven by deployment into alternative investments from growth in net
organic inflows over liability outflows and an increase in valuation of several
alternative investments.

Net alternative investments do not correspond to the total investment funds,
including related parties and consolidated VIEs, on our condensed consolidated
balance sheets. As discussed above in the net invested assets section, we adjust
the 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 2. 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 four insurance companies:
Delta Lloyd Deutschland AG (2015), Aegon Ireland plc (2018), Generali Belgium SA
(2019) and VIVAT NV (2020).

Our alternative investment in Athora had a carrying value of $912 million and
$743 million as of September 30, 2022 and December 31, 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 9.90%
and 12.00% for the three months ended September 30, 2022 and 2021, respectively,
and 17.38% and 10.29% for the nine months ended September 30, 2022 and 2021,
respectively. Alternative investment income from Athora was $22 million and $22
million for the three months ended September 30, 2022 and 2021, respectively,
and $113 million and $55 million for the nine months ended September 30, 2022
and 2021, respectively. The increase in alternative investment income for the
nine months ended September 30, 2022 was driven by an increase in average NAV as
well as strong performance of the fund in the current year.

Public Equity

We hold a public equity position in Jackson (ticker: JXN), previously held as a
private equity investment, after Jackson's former parent company, Prudential
plc, completed a dividend demerger transaction in September of 2021 which
resulted in Jackson becoming a publicly traded company. Although the net
invested asset value of this equity position is not significant, it has the
ability to create volatility in our condensed consolidated statements of income
(loss). As of September 30, 2022 and December 31, 2021, we held approximately
2.8 million and 3.4 million shares of Jackson, respectively, with a market value
of $77 million and $133 million, net of the ACRA noncontrolling interest,
respectively. Alternative investment income (loss) from Jackson was $8 million
and $17 million for the three months ended September 30, 2022 and 2021,
respectively, and $(24) million and $17 million for the nine months ended
September 30, 2022 and 2021, respectively. The decrease in alternative
investment income for the three months ended September 30, 2022 was driven by a
less favorable increase in the Jackson share price in the current quarter as
well as a lower share count compared to the prior year. The decrease in
alternative investment income for the nine months ended September 30, 2022 was
driven by the decrease in the Jackson share price in the current year. In the
fourth quarter, we sold a portion of our remaining shares in Jackson, which
decreased our number of shares held to approximately 2.0 million, net of the
ACRA noncontrolling interest.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Non-GAAP Measure Reconciliations

The reconciliation of net income (loss) available to AHL common shareholder to
spread related earnings, is as follows:

                                                  Successor                      Predecessor                Successor                        Predecessor
                                                                                 Three months
                                                                                    ended
                                              Three months ended                September 30,           Nine months ended                 Nine months ended
(In millions)                                 September 30, 2022                     2021               September 30, 2022               September 30, 2021
Net income (loss) available to Athene
Holding Ltd. common shareholder             $              (936)               $         698          $            (4,609)               $          2,658
Preferred stock dividends                                    35                           35                          105                             106
Net income (loss) attributable to
noncontrolling interest                                    (476)                          37                       (2,431)                           (111)
Net income (loss)                                        (1,377)                         770                       (6,935)                          2,653
Income tax expense (benefit)                               (210)                         (50)                      (1,101)                            196
Income (loss) before income taxes                        (1,587)                         720                       (8,036)                          

2,849

Realized gains (losses) on sale of AFS
securities                                                  (41)                          73                         (144)                            

149

Unrealized, allowances and other investment
gains (losses)1                                            (672)                          47                       (2,746)                            

626

Change in fair value of reinsurance assets               (1,146)                        (118)                      (4,415)                           

(429)

Offsets to investment gains (losses)                        122                           13                          425                              

28

Investment gains (losses), net of offsets                (1,737)                          15                       (6,880)                            

374

Non-operating change in insurance
liabilities and related derivatives, net of
offsets                                                      64                           70                         (398)                            

490

Integration, restructuring and other
non-operating expenses                                      (37)                          (8)                        (104)                            (64)
Stock compensation expense2                                 (15)                          (8)                         (40)                            (27)
Preferred stock dividends                                    35                           35                          105                             106
VIE and noncontrolling interests - pre-tax
income (loss)                                              (473)                          68                       (2,407)                            

(85)

Total adjustments to income (loss) before
income taxes                                             (2,163)                         172                       (9,724)                            794
Spread related earnings                     $               576                $         548          $             1,688                $          2,055

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

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

                                                                    Successor                        Predecessor
(In millions)                                                  September 30, 2022                 December 31, 2021
Total AHL shareholders' equity (deficit)                      $           (1,346)               $           20,130
Less: Preferred stock                                                      2,667                             2,312
Total AHL common shareholder's equity (deficit)                           (4,013)                           17,818
Less: Accumulated other comprehensive income (loss)                      (13,755)                            2,430
Less: Accumulated change in fair value of reinsurance assets              (3,316)                              585

Less: Accumulated change in fair value of mortgage loan
assets

                                                                    (1,990)                                -
Total adjusted AHL common shareholder's equity                $           15,048                $           14,803





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Item 2. 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)                                September 30, 2022               December 31, 2021
Total debt                                                      $          3,271                 $          2,964
Less: Adjustment to arrive at notional debt                                  271                              (36)
Notional debt                                                   $          3,000                 $          3,000

Total debt                                                      $          3,271                 $          2,964
Total AHL shareholders' equity (deficit)                                  (1,346)                          20,130
Total Capitalization                                                       1,925                           23,094
Less: Accumulated other comprehensive income (loss)                      (13,755)                           2,430
Less: Accumulated change in fair value of reinsurance assets              (3,316)                             585
Less: Accumulated change in fair value of mortgage loan assets            (1,990)                               -
Less: Adjustment to arrive at notional debt                                  271                              (36)
Total adjusted capitalization                                   $         20,715                 $         20,115

Debt to capital ratio                                                      169.9   %                         12.8  %
Accumulated other comprehensive income (loss)                             (111.3)  %                          1.6  %
Accumulated change in fair value of reinsurance assets                     (26.9)  %                          0.4  %
Accumulated change in fair value of mortgage loan assets                   (16.1)  %                            -  %
Adjustment to arrive at notional debt                                       (1.1)  %                          0.1  %
Adjusted debt to capital ratio                                              14.5   %                         14.9  %



The reconciliation of net investment income to net investment earnings and
earned rate is as follows:
                                                     Successor                                          Predecessor                                    Successor                                          Predecessor
                                       Three months ended September 30, 2022               Three months ended September 30, 2021          Nine months ended September 30, 2022                Nine months ended September 30, 2021
(In millions, except percentages)            Dollar                 Rate                         Dollar                  Rate                  Dollar                 Rate                         Dollar                  Rate
GAAP net investment income             $         1,843                3.83  %             $           1,472                3.64  %       $         5,252                3.75  %             $           5,158                4.39  %
Change in fair value of reinsurance
assets                                              11                0.02  %                           379                0.94  %                   281                0.20  %                         1,133                0.96  %
VIE earnings and noncontrolling
interest                                           219                0.46  %                            15                0.04  %                   389                0.28  %                            73                0.06  %
Alternative gains (losses)                          10                0.02  %                            74                0.18  %                     -                   -  %                           125                0.11  %
ACRA noncontrolling interest                      (407)              (0.85) %                          (287)              (0.71) %                (1,059)              (0.76) %                          (704)              (0.60) %
Apollo investment (gain) loss                        -                   -  %                           (13)              (0.03) %                   (33)              (0.02) %                          (460)              (0.39) %
Held for trading amortization and
other                                               45                0.10  %                            34                0.08  %                    34                0.02  %                            73                0.06 

%

Total adjustments to arrive at net
investment earnings/earned rate                   (122)              (0.25) %                           202                0.50  %                  (388)              (0.28) %                           240                0.20  %
Total net investment earnings/earned
rate                                   $         1,721                3.58  %             $           1,674                4.14  %       $         4,864                3.47  %             $           5,398                4.59  %

Average net invested assets            $       192,231                                    $         161,789                              $       186,815                                    $         156,716



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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The reconciliation of GAAP benefits and expenses to cost of funds is as follows:
                                                        Successor                                           Predecessor                                    Successor                                           Predecessor
                                          Three months ended September 30, 2022                Three months ended September 30, 2021          Nine months ended September 30, 2022                Nine months ended September 30, 2021
(In millions, except percentages)               Dollar                 Rate                         Dollar                   Rate                  Dollar                 Rate                         Dollar                   Rate
GAAP benefits and expenses                $         3,896                8.11  %             $           8,004                19.79  %       $        11,871                8.47  %             $          16,689                14.20  %
Premiums                                           (3,045)              (6.34) %                        (6,686)              (16.53) %               (10,769)              (7.69) %                       (11,295)               (9.61) %
Product charges                                      (184)              (0.38) %                          (154)               (0.38) %                  (525)              (0.38) %                          (461)               (0.39) %
Other revenues                                         26                0.06  %                           (24)               (0.06) %                    38                0.03  %                           (58)               (0.05) %
FIA option costs                                      322                0.67  %                           281                 0.70  %                   922                0.66  %                           838                 0.71  %
Reinsurance embedded derivative impacts                12                0.02  %                            12                 0.03  %                    36                0.02  %                            38                 0.03  %
Non-operating change in insurance
liabilities and embedded derivatives, net
of offsets                                            198                0.41  %                          (164)               (0.41) %                 1,451                1.04  %                        (1,912)               (1.62) %
DAC and DSI amortization related to
investment gains and losses1                           19                0.04  %                            29                 0.07  %                    55                0.04  %                            74                 0.06  %
Rider reserves related to investment
gains and losses                                       98                0.20  %                             -                    -  %                   363                0.26  %                             1                    -  %
Policy and other operating expenses,
excluding policy acquisition expenses                (294)              (0.61) %                          (161)               (0.40) %                  (801)              (0.57) %                          (530)             

(0.45) %

AmerUs closed block fair value liability               77                0.16  %                            11                 0.03  %                   318                0.23  %                            50                 0.04  %
ACRA noncontrolling interest                         (169)              (0.35) %                          (145)               (0.36) %                  (282)              (0.20) %                          (494)               (0.42) %
Other                                                  10                0.02  %                           (18)               (0.04) %                     1                   -  %                           (20)               (0.02) %
Total adjustments to arrive at cost of
funds                                              (2,930)              (6.10) %                        (7,019)              (17.35) %                (9,193)              (6.56) %                       (13,769)              (11.72) %
Total cost of funds                       $           966                2.01  %             $             985                 2.44  %       $         2,678                1.91  %             $           2,920                 2.48  %

Average net invested assets               $       192,231                                    $         161,789                               $       186,815                                    $         156,716

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                Successor                         Predecessor
                                                                                 Three months
                                                                                    ended
                                              Three months ended                September 30,           Nine months ended                  Nine months ended
(In millions)                                 September 30, 2022                     2021               September 30, 2022                September 30, 2021
GAAP policy and other operating expenses    $               388                $         250          $             1,081                $              795
Interest expense                                            (68)                         (34)                        (142)                             (100)
Policy acquisition expenses, net of
deferrals                                                   (94)                         (89)                        (280)                             

(265)

Integration, restructuring and other
non-operating expenses                                      (37)                          (8)                        (104)                              (64)
Stock compensation expenses1                                (15)                          (8)                         (40)                              (27)
ACRA noncontrolling interest                                (73)                         (31)                        (183)                              (71)
Other changes in policy and other operating
expenses                                                     19                            6                            6                               

(7)

Total adjustments to arrive at other
operating expenses                                         (268)                        (164)                        (743)                             (534)
Other operating expenses                    $               120                $          86          $               338                $              261

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

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Item 2. 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
                                                              September 30,
(In millions)                                                     2022                     December 31, 2021
Total investments, including related parties                 $    185,376                $          209,176
Derivative assets                                                  (4,065)                           (4,387)
Cash and cash equivalents (including restricted cash)              10,847                            10,275
Accrued investment income                                           1,226                               962
Payables for collateral on derivatives                             (2,538)                           (3,934)
Reinsurance funds withheld and modified coinsurance                 7,156                            (1,035)

VIE and VOE assets, liabilities and noncontrolling interest 13,105

                           2,958
Unrealized (gains) losses                                          25,098                            (4,057)
Ceded policy loans                                                   (180)                             (169)
Net investment receivables (payables)                                 249                                75
Allowance for credit losses                                           446                               361
Total adjustments to arrive at gross invested assets               51,344                             1,049
Gross invested assets                                             236,720                           210,225
ACRA noncontrolling interest                                      (41,563)                          (34,882)
Net invested assets                                          $    195,157                $          175,343



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)                                                   September 30, 2022                 December 31, 2021
Investment funds, including related parties and VIEs          $            13,186                $            9,866
Equity securities1                                                            542                               872
CLO and ABS equities included in trading securities1                          293                             1,418
Investment in Apollo                                                            -                            (2,112)
Investment funds within funds withheld at interest                          1,161                             1,807
Royalties and other assets included in other investments                       16                                50
Net assets of the VIE, excluding investment funds                          (1,371)                             (772)
Unrealized (gains) losses and other adjustments                               128                                14
ACRA noncontrolling interest                                               (1,921)                           (1,270)
Other Assets                                                                  301                                 -
Total adjustments to arrive at alternative investments                       (851)                                7
Net alternative investments                                   $            12,335                $            9,873

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

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Item 2. 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
                                                              September 30,
(In millions)                                                     2022                     December 31, 2021

Total liabilities                                            $    238,566                $          212,968

Debt                                                               (3,271)                           (2,964)
Derivative liabilities                                             (2,222)                             (472)

Payables for collateral on derivatives and securities to
repurchase

                                                         (4,149)                           (6,446)
Other liabilities                                                  (2,823)                           (2,975)
Liabilities of consolidated VIEs                                   (1,401)                             (461)
Reinsurance ceded receivables                                      (4,356)                           (4,594)
Policy loans ceded                                                   (180)                             (169)
ACRA noncontrolling interest                                      (37,995)                          (32,933)
Other                                                                  (9)                               (3)
Total adjustments to arrive at net reserve liabilities            (56,406)                          (51,017)
Net reserve liabilities                                      $    182,160                $          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 September 30, 2022 was $87.0 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 September 30, 2022 was $22.6
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, which was undrawn as of September 30, 2022 and
had a remaining term of more than two years, subject to up to two one-year
extensions. Additionally, during the third quarter of 2022, we entered into a
revolving Liquidity Facility that has a current borrowing capacity of $2.5
billion, which was undrawn as of September 30, 2022 and has a 364-day term,
subject to additional 364-day extensions. The Liquidity Facility will be used
for liquidity and working capital needs to meet short-term cash flow and
investment timing differences. 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
favorable market conditions and other factors. We are also party 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 2. 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), 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 during
the surrender charge period 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 September 30, 2022 and December 31,
2021, approximately 75% and 74%, respectively, of our deferred annuity
liabilities were subject to penalty upon surrender. In addition, as of
September 30, 2022 and December 31, 2021, approximately 53% 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. Our funding agreements, group annuities and payout
annuities are generally non-surrenderable which accounts for approximately 31%
of our net reserve liabilities as of September 30, 2022.

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 September 30, 2022 and December 31, 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 September 30, 2022 and December 31, 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 September 30, 2022, the total maximum borrowings under
the FHLB facilities were limited to $48.6 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, we estimate that as of September 30,
2022 we had the ability to draw up to a total of approximately $5.3 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 condensed 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 September 30, 2022 and December 31, 2021, the payables for repurchase
agreements were $4.5 billion and $3.1 billion, respectively, while the fair
value of securities and collateral held by counterparties backing the repurchase
agreements was $4.6 billion and $3.2 billion, respectively. As of September 30,
2022, payables for repurchase agreements were comprised of $1.6 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 September 30, 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 September 30, 2022, we had no outstanding payables under
this facility.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Cash Flows

Our cash flows were as follows:

                                                                         Successor                        Predecessor
                                                                     Nine months ended                 Nine months ended
(In millions)                                                        September 30, 2022               September 30, 2021
Net income (loss)                                                  $            (6,935)               $          2,653

Non-cash revenues and expenses                                                  13,012                           4,608
Net cash provided by operating activities                                        6,077                           7,261
Sales, maturities and repayments of investments                                 24,754                          21,907
Purchases of investments                                                       (47,977)                        (41,803)

Other investing activities                                                         885                             447
Net cash used in investing activities                                          (22,338)                        (19,449)
Inflows on investment-type policies and contracts                               23,329                          16,030
Withdrawals on investment-type policies and contracts                           (7,903)                         (5,272)
Other financing activities                                                       1,689                           1,501
Net cash provided by financing activities                                       17,115                          12,259
Effect of exchange rate changes on cash and cash equivalents                       (18)                             (3)
Net increase in cash and cash equivalents1                         $               836                $             68

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 $6.1 billion
and $7.3 billion for the nine months ended September 30, 2022 and 2021,
respectively. The decrease in cash provided by operating activities was
primarily driven by lower cash received from pension group annuity transactions
net of outflows.

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 $22.3 billion and $19.4 billion for the nine months
ended September 30, 2022 and 2021, respectively. The increase in cash used in
investing activities was primarily attributable to an increase in purchases of
investments due to the deployment of significant cash inflows from organic
growth compared to prior year, partially offset by an increase in sales,
maturities and repayments of securities.

Cash flows from financing activities

The primary cash inflows from financing activities are inflows on our
investment-type policies, 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 $17.1 billion and $12.3 billion for the
nine months ended September 30, 2022 and 2021, respectively. The increase in
cash provided by financing activities was primarily attributed to higher organic
inflows from retail and flow reinsurance net of withdrawals and net capital
contributions from noncontrolling interests, partially offset by the $750
million dividend to Apollo declared in 2021, the payment of common stock
dividends of $563 million for the nine months ended September 30, 2022 and
proceeds from the issuance of long-term debt in the prior year.

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Item 2. 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
September 30, 2022:

                                                                    Payments Due by Period
                                                                                                                    2027 and
(In millions)                        Total                2022             2023-2024           2025-2026           thereafter
Interest sensitive contract
liabilities                     $    166,894          $   4,131          $   40,546          $   34,262          $    87,955
Future policy benefits                54,709                446               4,135               4,057               46,071

Debt1                                  4,712                 34                 253                 253                4,172
Securities to repurchase2              4,946              1,448                 422               1,269                1,807
Total                           $    231,261          $   6,059          $   45,356          $   39,841          $   140,005

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 September 30, 2022 interest rate.

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 declared common stock cash dividends of $187.5 million on September 2, 2022,
payable to the holder of AHL's Class A common shares with a record date of
September 28, 2022 and payment date of September 29, 2022. We have paid $562.5
million in common stock dividends for the nine months ended September 30, 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.

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.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

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.

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 our undrawn $2.5 billion 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 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                      2028                          4.125%                          $1,000
2030 Senior
Unsecured Notes                  April 3, 2020                       2030                          6.150%                           $500
2031 Senior
Unsecured Notes                 October 8, 2020                      2031                          3.500%                           $500
2051 Senior
Unsecured Notes                  May 25, 2021                        2051                          3.950%                           $500
2052 Senior
Unsecured Notes                December 13, 2021                     2052                          3.450%                           $500

See Note 9 - Debt to the consolidated financial statements in our 2021 Annual
Report 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

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.

See Note 10 - Equity to the consolidated financial statements in our 2021 Annual
Report for further information on preferred stock.

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 September 30, 2022 and December 31,
2021, the revolving note payable had an outstanding balance of $1.1 billion and
$158 million, respectively.

Capital

We believe that we have a strong capital position and that we 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.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

As of December 31, 2021 and 2020, our US insurance companies' TAC, as defined by
the NAIC, was $3.0 billion and $2.7 billion, respectively, and our US RBC ratio
was 377% and 425%, respectively. The decrease was primarily driven by strong
growth in our organic channels, a recent NAIC update to C-1 factors, higher
unfunded commitments and the impairment of a COLI asset, partially offset by
higher total adjusted capital largely from capital contributions. 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, 2021 and 2020, respectively.

Bermuda statutory capital and surplus for our Bermuda insurance companies in
aggregate was $14.6 billion and $13.5 billion as of December 31, 2021 and 2020,
respectively. Our Bermuda insurance companies adhere to BMA regulatory capital
requirements to maintain statutory capital and surplus to meet the minimum
margin of solvency and maintain minimum economic balance sheet (EBS) capital and
surplus to meet the enhanced capital requirement. 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 $19.7 billion and $17.2 billion, resulting
in a BSCR ratio of 232% and 254% as of December 31, 2021 and 2020, respectively.
The decrease was primarily driven by strong growth in our organic channels and
the declared dividend. The Bermuda group's BSCR ratio includes the capital and
surplus of ALRe, AARe, ALReI and all of their subsidiaries, including AUSA 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, 2021 and 2020, our Bermuda
insurance companies held the appropriate capital to adhere to these regulatory
standards. As of December 31, 2021 and 2020, our Bermuda RBC was 410% and 460%,
respectively. The decrease was primarily driven by strong growth in our organic
channels, a recent NAIC update to C-1 factors and the declared dividend. 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 the AOG units and other 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.

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 shareholder-friendly,
strategic capital solution allows us the flexibility to simultaneously deploy
capital across multiple accretive avenues, while maintaining a strong financial
position.

Critical Accounting Estimates and Judgments

The preparation of consolidated financial statements in conformity with 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 of our 2021 Annual
Report. 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. Other than
as described in this Item 2, there have been no material changes to our critical
accounting estimates and judgments from those previously disclosed in our 2021
Annual Report. The following updates and supplements the critical accounting
estimates and judgments in our 2021 Annual Report.

Investments

We are responsible for the fair value measurement of certain investments
presented in our condensed 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
condensed consolidated financial statements.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Valuation of Mortgage Loans

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
loans 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
non-participating 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 September 30, 2022, the reserve investment yield assumptions for
non-participating contracts range from 2.3% to 5.9% 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, in order 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.

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 September 30, 2022, the GLWB and
GMDB liability balance, including the impacts of shadow adjustments, totaled
$5.1 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 following the business combination and
pushdown accounting election described in Note 2 - Business Combination. Using
factors consistent with those previously disclosed in our 2021 Annual Report,
changes to the GLWB and GMDB liability balance from these hypothetical changes
in assumptions are not significant.

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.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

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 condensed consolidated statements of income (loss).

As of September 30, 2022, we had embedded derivative liabilities classified as
Level 3 in the fair value hierarchy of $5.0 billion. The increase (decrease) to
the embedded derivatives on FIA products from hypothetical changes in discount
rates is summarized as follows:

                   (In millions)               September 30, 2022
                   +100 bps discount rate     $             (248)
                   -100 bps discount rate                    274



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 condensed 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 3 Quantitative and Qualitative Disclosures
About Market Risks.

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.

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.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

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 condensed
consolidated balance sheets as the associated reserves. Positive VOBA is
recorded in DAC, DSI and VOBA on the condensed 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 condensed 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 condensed 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.

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
condensed consolidated financial statements.

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