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Consolidated Financial Statements – Form 8-K

Important Notice
The information included in this financial supplement is unaudited and intended for informational purposes only.
Athene Holding Ltd. (AHL) is a subsidiary of Apollo Global Management, Inc. (AGM).The financial statements and exhibits included in this financial supplement should be read in conjunction with AHL's reports and other filings with the US Securities and Exchange Commission, including its reports on Form 10-K, Form 10-Q and Form 8-K. This financial supplement does not constitute an offer to sell, or the solicitation of an offer to buy, any security of AHL, and nothing in this financial supplement shall in any way be relied on in connection with investment decisions. Each recipient of the information contained in this financial supplement is responsible for making its own independent assessment of the business, financial condition, prospects, status and affairs of AHL.
AHL adopted the US GAAP accounting standard related to Targeted Improvements to the Accounting for Long-Duration Contracts (LDTI) as of January 1, 2023, which required AHL to apply the new standard retrospectively back to January 1, 2022, the date of AHL's merger with AGM. The 2022 financial metrics and disclosures in this supplement have been retrospectively adjusted in accordance with the requirements of the adoption guidance of LDTI. Approximately 20% of Athene's total US GAAP liabilities as of January 1, 2022 were impacted by these changes. Please refer to the discussion of Key Operating and Non-GAAP Measures herein for additional information on items that are excluded from AHL's non-GAAP measure of spread related earnings, which was retrospectively adjusted in accordance with the requirements of the adoption guidance of LDTI. Please see Notes 1, 2, 8 and 9 to the condensed consolidated financial statements included in AHL's Form 10-Q for the quarter ended September 30, 2023 as well as the 2022 Financial Supplement LDTI Recast published on May 5, 2023 for more information on LDTI.
AHL undertakes no obligation to update or correct the information in this financial supplement. AHL makes no representation or warranty, express or implied, with respect to the fairness, correctness, accuracy, reasonableness or completeness of any of the information contained in this financial supplement. AHL does not accept any liability whatsoever for any direct, indirect or consequential losses (in contract, tort or otherwise) arising from the use of this financial supplement or its contents or any reliance on the information contained herein.
This financial supplement includes certain non-GAAP measures, including net investment earnings, cost of funds, other operating expenses, spread related earnings, net investment spread, net spread, adjusted debt-to-capital ratio, net invested assets, net reserve liabilities, normalized spread related earnings, normalized net investment spread and normalized net spread. Management believes the use of these non-GAAP measures (which are defined and discussed in greater detail and reconciled elsewhere in this financial supplement), together with the relevant GAAP measures, provides information that may enhance an investor's understanding of AHL's results of operations and the underlying profitability drivers of AHL's business. These measures should be considered supplementary to AHL's results in accordance with US GAAP and should not be viewed as a substitute for the corresponding US GAAP measures.
3
Financial Highlights
Unaudited (in millions, except percentages)
Quarterly Trends Δ Year-to-Date Δ
3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 Q/Q Y/Y 2022 2023 Y/Y
SELECTED INCOME STATEMENT DATA
GAAP
Net income (loss) available to AHL common shareholder $ (622) $ 361 $ 721 $ 396 $ 442 12 % NM $ (3,412) $ 1,559 NM
Retuon assets (ROA) (1.07) % 0.60 % 1.15 % 0.60 % 0.66 % 6bps NM (1.91) % 0.80 % NM
NON-GAAP
Spread related earnings $ 640 $ 697 $ 687 $ 799 $ 872 9 % 36 % $ 1,769 $ 2,358 33 %
Net spread 1.33 % 1.42 % 1.36 % 1.52 % 1.68 % 16bps 35bps 1.26 % 1.52 % 26bps
Net investment spread 1.73 % 1.85 % 1.83 % 1.99 % 2.13 % 14bps 40bps 1.65 % 1.98 % 33bps
Spread related earnings - normalized1
 $ 680 $ 746 $ 810 $ 874 $ 878 - % 29 % $ 1,832 $ 2,562 40 %
Net spread - normalized1
 1.41 % 1.52 % 1.61 % 1.66 % 1.69 % 3bps 28bps 1.31 % 1.66 % 35bps
Net investment spread - normalized1
 1.81 % 1.95 % 2.08 % 2.13 % 2.14 % 1bp 33bps 1.70 % 2.12 % 42bps
SELECTED BALANCE SHEET DATA
GAAP
Total assets
 $ 234,554 $ 243,931 $ 257,654 $ 269,437 $ 269,763 - % 15 % $ 234,554 $ 269,763 15 %
Goodwill 4,062 4,058 4,061 4,065 4,060 - % - % 4,062 4,060 - %
Total liabilities 227,917 233,382 244,604 256,203 255,734 - % 12 % 227,917 255,734 12 %
Debt 3,271 3,658 3,650 3,642 3,634 - % 11 % 3,271 3,634 11 %
Total AHL shareholders' equity 5,133 7,158 8,698 8,701 8,537 (2) % 66 % 5,133 8,537 66 %
Debt-to-capital ratio 38.9 % 33.8 % 29.6 % 29.5 % 29.9 % 40bps NM 38.9 % 29.9 % NM
NON-GAAP
Gross invested assets
 $ 236,720 $ 238,310 $ 247,673 $ 257,235 $ 261,209 2 % 10 % $ 236,720 $ 261,209 10 %
Invested assets - ACRA noncontrolling interests
 (41,563) (41,859) (40,924) (43,565) (53,114) 22 % 28 % (41,563) (53,114) 28 %
Net invested assets
 195,157 196,451 206,749 213,670 208,095 (3) % 7 % 195,157 208,095 7 %
Net reserve liabilities
 173,539 175,970 184,891 193,431 185,744 (4) % 7 % 173,539 185,744 7 %
Notional debt 3,000 3,400 3,400 3,400 3,400 - % 13 % 3,000 3,400 13 %
Adjusted AHL common shareholder's equity 16,428 16,653 16,505 17,001 19,089 12 % 16 % 16,428 19,089 16 %
Adjusted debt-to-capital ratio 13.6 % 14.7 % 14.7 % 14.4 % 13.3 % NM (30)bps 13.6 % 13.3 % (30)bps
INFLOWS DATA
Gross organic inflows $ 12,955 $ 11,290 $ 11,927 $ 18,714 $ 12,942 (31) % - % $ 36,560 $ 43,583 19 %
Gross inorganic inflows - - - - - NM NM - - NM
Total gross inflows $ 12,955 $ 11,290 $ 11,927 $ 18,714 $ 12,942 (31) % - % $ 36,560 $ 43,583 19 %
Note: "NM" represents changes that are not meaningful. Please refer to Notes to the Financial Supplement section and the Non-GAAP Measure Reconciliations for discussion of non-GAAP metrics. 1 Spread related earnings - normalized, net spread - normalized and net investment spread - normalized reflect adjustments to exclude notable items and normalize alternative investment income to an 11% long-term return. See further discussion over the non-GAAP metrics in the Notes to the Financial Supplement section.
4
Condensed Consolidated Statements of Income (Loss) (GAAP view)
Unaudited (in millions, except percentages)
Quarterly Trends Δ Year-to-Date Δ
3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 Q/Q Y/Y 2022 2023 Y/Y
REVENUES
Premiums
 $ 3,045 $ 869 $ 96 $ 9,041 $ 26 (100) % (99) % $ 10,769 $ 9,163 (15) %
Product charges
 184 193 198 207 217 5 % 18 % 525 622 18 %
Net investment income
 1,843 2,319 2,407 2,717 2,928 8 % 59 % 5,252 8,052 53 %
Investment related gains (losses) (2,848) 105 1,065 366 (2,624) NM 8 % (12,811) (1,193) 91 %
Other revenues
 (26) 10 13 7 564 NM NM (38) 584 NM
Revenues of consolidated variable interest entities
Net investment income 33 31 80 55 75 36 % 127 % 80 210 163 %
Investment related gains (losses) 79 260 201 293 250 (15) % 216 % 59 744 NM
Total revenues 2,310 3,787 4,060 12,686 1,436 (89) % (38) % 3,836 18,182 NM
BENEFITS AND EXPENSES
Interest sensitive contract benefits
 171 1,119 1,289 2,012 333 (83) % 95 % (581) 3,634 NM
Future policy and other policy benefits
 3,270 1,235 466 9,512 368 (96) % (89) % 11,230 10,346 (8) %
Market risk benefits remeasurement (gains) losses (458) 32 346 (71) (441) NM 4 % (1,689) (166) 90 %
Amortization of deferred acquisition costs, deferred sales inducements and value of business acquired 112 126 138 153 211 38 % 88 % 318 502 58 %
Policy and other operating expenses
 388 412 435 452 472 4 % 22 % 1,083 1,359 25 %
Total benefits and expenses 3,483 2,924 2,674 12,058 943 (92) % (73) % 10,361 15,675 51 %
Income (loss) before income taxes (1,173) 863 1,386 628 493 (21) % NM (6,525) 2,507 NM
Income tax expense (benefit) (121) 137 163 133 162 22 % NM (783) 458 NM
Net income (loss) (1,052) 726 1,223 495 331 (33) % NM (5,742) 2,049 NM
Less: Net income (loss) attributable to noncontrolling interests (465) 329 455 54 (155) NM 67 % (2,435) 354 NM
Net income (loss) attributable to Athene Holding Ltd. shareholders (587) 397 768 441 486 10 % NM (3,307) 1,695 NM
Less: Preferred stock dividends
 35 36 47 45 44 (2) % 26 % 105 136 30 %
Net income (loss) available to Athene Holding Ltd. common shareholder $ (622) $ 361 $ 721 $ 396 $ 442 12 % NM $ (3,412) $ 1,559 NM
5
Spread Related Earnings (Management view)
Unaudited (in millions, except percentages)
Quarterly Trends Δ Year-to-Date Δ
3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 Q/Q Y/Y 2022 2023 Y/Y
SPREAD RELATED EARNINGS
Fixed income and other net investment income $ 1,471 $ 1,727 $ 1,958 $ 2,208 $ 2,236 1 % 52 % $ 3,980 $ 6,402 61 %
Alternative net investment income 250 322 185 259 230 (11) % (8) % 884 674 (24) %
Net investment earnings 1,721 2,049 2,143 2,467 2,466 - % 43 % 4,864 7,076 45 %
Strategic capital management fees 14 14 14 16 19 19 % 36 % 39 49 26 %
Cost of funds (902) (1,158) (1,235) (1,437) (1,384) (4) % 53 % (2,597) (4,056) 56 %
Net investment spread 833 905 922 1,046 1,101 5 % 32 % 2,306 3,069 33 %
Other operating expenses (120) (128) (126) (118) (123) 4 % 3 % (338) (367) 9 %
Interest and other financing costs (73) (80) (109) (129) (106) (18) % 45 % (199) (344) 73 %
Spread related earnings $ 640 $ 697 $ 687 $ 799 $ 872 9 % 36 % $ 1,769 $ 2,358 33 %
Fixed income and other net investment income 3.27 % 3.76 % 4.13 % 4.46 % 4.58 % 12bps 131bps 3.03 % 4.40 % 137bps
Alternative net investment income 8.26 % 10.55 % 6.12 % 8.53 % 7.75 % (78)bps (51)bps 10.30 % 7.46 % NM
Net investment earnings 3.58 % 4.19 % 4.25 % 4.69 % 4.76 % 7bps 118bps 3.47 % 4.57 % 110bps
Strategic capital management fees 0.03 % 0.03 % 0.03 % 0.03 % 0.04 % 1bp 1bp 0.03 % 0.03 % 0bps
Cost of funds (1.88) % (2.37) % (2.45) % (2.73) % (2.67) % (6)bps 79bps (1.85) % (2.62) % 77bps
Net investment spread 1.73 % 1.85 % 1.83 % 1.99 % 2.13 % 14bps 40bps 1.65 % 1.98 % 33bps
Other operating expenses (0.25) % (0.26) % (0.25) % (0.22) % (0.24) % 2bps (1)bp (0.24) % (0.24) % 0bps
Interest and other financing costs (0.15) % (0.17) % (0.22) % (0.25) % (0.21) % (4)bps 6bps (0.15) % (0.22) % 7bps
Spread related earnings 1.33 % 1.42 % 1.36 % 1.52 % 1.68 % 16bps 35bps 1.26 % 1.52 % 26bps
Average net invested assets - fixed income and other $ 180,143 $ 183,597 $ 189,509 $ 198,063 $ 195,448 (1) % 8 % $ 175,380 $ 194,200 11 %
Average net invested assets - alternatives 12,088 12,207 12,091 12,146 11,864 (2) % (2) % 11,435 12,041 5 %
Average net invested assets $ 192,231 $ 195,804 $ 201,600 $ 210,209 $ 207,312 (1) % 8 % $ 186,815 $ 206,241 10 %
Please refer to Notes to the Financial Supplement section and the Non-GAAP Measure Reconciliations for discussion on spread related earnings.
6
Reconciliation of Earnings Measures
Unaudited (in millions, except percentages)
Quarterly Trends Δ Year-to-Date Δ
3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 Q/Q Y/Y 2022 2023 Y/Y
RECONCILIATION OF NET INCOME (LOSS) AVAILABLE TO ATHENE HOLDING LTD. COMMON SHAREHOLDER TO SPREAD RELATED EARNINGS
Net income (loss) available to Athene Holding Ltd. common shareholder $ (622) $ 361 $ 721 $ 396 $ 442 12 % NM $ (3,412) $ 1,559 NM
Preferred stock dividends 35 36 47 45 44 (2) % 26 % 105 136 30 %
Net income (loss) attributable to noncontrolling interests (465) 329 455 54 (155) NM 67 % (2,435) 354 NM
Net income (loss) (1,052) 726 1,223 495 331 (33) % NM (5,742) 2,049 NM
Income tax expense (benefit) (121) 137 163 133 162 22 % NM (783) 458 NM
Income (loss) before income taxes (1,173) 863 1,386 628 493 (21) % NM (6,525) 2,507 NM
Realized gains (losses) on sale of AFS securities (41) (32) (59) (81) (29) 64 % 29 % (144) (169) (17) %
Unrealized, allowances and other investment gains (losses) (671) (442) 92 (338) (261) 23 % 61 % (2,745) (507) 82 %
Change in fair value of reinsurance assets (1,146) 331 357 (153) (384) NM 66 % (4,415) (180) 96 %
Offsets to investment gains (losses) 5 6 7 9 11 22 % 120 % 7 27 286 %
Investment gains (losses), net of offsets (1,853) (137) 397 (563) (663) (18) % 64 % (7,297) (829) 89 %
Change in fair values of derivatives and embedded derivatives - FIAs 90 (24) 143 206 (141) NM NM (314) 208 NM
Non-operating change in funding agreements (80) (26) (6) 10 12 20 % NM (80) 16 NM
Change in fair value of market risk benefits 511 30 (271) 133 565 NM 11 % 1,864 427 (77) %
Non-operating change in liability for future policy benefits (3) (4) (1) (45) (5) 89 % (67) % (13) (51) NM
Non-operating change in insurance liabilities and related derivatives 518 (24) (135) 304 431 42 % (17) % 1,457 600 (59) %
Integration, restructuring and other non-operating expenses (37) (29) (29) (28) (41) 46 % 11 % (104) (98) (6) %
Stock compensation expense (15) (16) (16) (13) (13) - % (13) % (40) (42) 5 %
Preferred stock dividends 35 36 47 45 44 (2) % 26 % 105 136 30 %
Noncontrolling interests - pre-tax income (loss) and VIE adjustments (461) 336 435 84 (137) NM 70 % (2,415) 382 NM
Less: Total adjustments to income (loss) before income taxes (1,813) 166 699 (171) (379) NM 79 % (8,294) 149 NM
Spread related earnings $ 640 $ 697 $ 687 $ 799 $ 872 9 % 36 % $ 1,769 $ 2,358 33 %
Note: Please refer to Notes to the Financial Supplement section for discussion on spread related earnings.
7
Net Flows & Outflows Attributable to Athene by Type
Unaudited (in millions, except percentages)
Quarterly Trends Δ Year-to-Date Δ
3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 Q/Q Y/Y 2022 2023 Y/Y
NET FLOWS
Retail $ 6,132 $ 7,662 $ 8,578 $ 6,782 $ 6,523 (4) % 6 % $ 12,745 $ 21,883 72 %
Flow reinsurance 2,291 1,856 1,793 2,782 3,174 14 % 39 % 4,330 7,749 79 %
Funding agreements1
 1,588 1,000 1,500 148 3,245 NM 104 % 9,039 4,893 (46) %
Pension group annuities 2,944 772 56 9,002 - NM NM 10,446 9,058 (13) %
Gross organic inflows 12,955 11,290 11,927 18,714 12,942 (31) % - % 36,560 43,583 19 %
Gross inorganic inflows2
 - - - - - NM NM - - NM
Total gross inflows 12,955 11,290 11,927 18,714 12,942 (31) % - % 36,560 43,583 19 %
Gross outflows3
 (7,000) (11,064) (6,879) (9,135) (10,738) 18 % 53 % (16,808) (26,752) 59 %
Net flows $ 5,955 $ 226 $ 5,048 $ 9,579 $ 2,204 (77) % (63) % $ 19,752 $ 16,831 (15) %
Inflows attributable to Athene4
 $ 11,000 $ 10,022 $ 11,896 $ 14,977 $ 3,101 (79) % (72) % $ 29,222 $ 29,974 3 %
Inflows attributable to ADIP4,5
 1,955 1,268 31 3,737 9,841 163 % NM 7,338 13,609 85 %
Total gross inflows $ 12,955 $ 11,290 $ 11,927 $ 18,714 $ 12,942 (31) % - % $ 36,560 $ 43,583 19 %
Outflows attributable to Athene $ (5,803) $ (9,787) $ (5,531) $ (7,891) $ (9,550) 21 % 65 % $ (13,937) $ (22,972) 65 %
Outflows attributable to ADIP5
 (1,197) (1,277) (1,348) (1,244) (1,188) (5) % (1) % (2,871) (3,780) 32 %
Total gross outflows3
 $ (7,000) $ (11,064) $ (6,879) $ (9,135) $ (10,738) 18 % 53 % $ (16,808) $ (26,752) 59 %
OUTFLOWS ATTRIBUTABLE TO ATHENE BY TYPE6
Maturity-driven, contractual-based outflows7
 $ (2,834) $ (1,472) $ (1,717) $ (3,981) $ (3,243) (19) % 14 % $ (5,523) $ (8,941) 62 %
Policyholder-driven outflows8
 (2,969) (3,453) (3,814) (3,910) (3,584) (8) % 21 % (8,414) (11,308) 34 %
Income oriented withdrawals (planned)9
 (1,516) (1,813) (1,766) (1,750) (1,617) (8) % 7 % (4,458) (5,133) 15 %
From policies out-of-surrender-charge (planned)10
 (1,131) (1,188) (1,480) (1,377) (1,326) (4) % 17 % (3,071) (4,183) 36 %
From policies in-surrender-charge (unplanned)11
 (322) (452) (568) (783) (641) (18) % 99 % (885) (1,992) 125 %
Core outflows (5,803) (4,925) (5,531) (7,891) (6,827) (13) % 18 % (13,937) (20,249) 45 %
Strategic reinsurance transactions12
 - (4,862) - - (2,723) NM NM - (2,723) NM
Outflows attributable to Athene $ (5,803) $ (9,787) $ (5,531) $ (7,891) $ (9,550) 21 % 65 % $ (13,937) $ (22,972) 65 %
Annualized rate13
Maturity-driven, contractual-based outflows7
 (5.9) % (3.0) % (3.4) % (7.6) % (6.3) % NM 40bps (3.9) % (5.8) % 190bps
Policyholder-driven outflows8
 (6.2) % (7.1) % (7.6) % (7.4) % (6.9) % (50)bps 70bps (6.0) % (7.3) % 130bps
Income oriented withdrawals (planned)9
 (3.2) % (3.7) % (3.5) % (3.3) % (3.1) % (20)bps (10)bps (3.2) % (3.3) % 10bps
From policies out-of-surrender-charge (planned)10
 (2.3) % (2.5) % (3.0) % (2.6) % (2.6) % 0bps 30bps (2.2) % (2.7) % 50bps
From policies in-surrender-charge (unplanned)11
 (0.7) % (0.9) % (1.1) % (1.5) % (1.2) % (30)bps 50bps (0.6) % (1.3) % 70bps
Core outflows (12.1) % (10.1) % (11.0) % (15.0) % (13.2) % NM 110bps (9.9) % (13.1) % NM
Strategic reinsurance transactions12
 - % (9.9) % - % - % (5.2) % NM NM - % (1.8) % NM
Outflows attributable to Athene (12.1) % (20.0) % (11.0) % (15.0) % (18.4) % NM NM (9.9) % (14.9) % NM
1 Funding agreements are comprised of funding agreements issued under our funding agreement backed notes (FABN) and funding agreement backed repurchase agreements (FABR) programs, funding agreements issued to the Federal Home Loan Bank (FHLB) and long-term repurchase agreements. 2 Gross inorganic inflows represent acquisitions and block reinsurance transactions. 3 Gross outflows include full and partial policyholder withdrawals on deferred annuities, death benefits, pension group annuity benefit payments, payments on payout annuities, funding agreement repurchases and maturities and ceded reinsurance. 4 Effective July 1, 2023, Apollo/Athene Dedicated Investment Program II (ADIP II) purchased 50% of ACRA 2's economic interests, resulting in approximately $6.8 billion of inflows attributable to Athene for the first six months of 2023 being retroactively attributed to ADIP II. This is reflected as an inflow for ADIP and a reduction of Athene inflows in 3Q'23. 5 ADIP refers to Apollo/Athene Dedicated Investment Program (ADIP I) and ADIP II and represents the noncontrolling interests in business ceded to ACRA. 6 The format and methodology of this table was updated during 1Q'23 to provide additional information. 7 Represents outflows from funding agreements, pension group annuities and multi-year guarantee fixed annuities (MYGA), all of which occur based on defined maturities or substantially lapse upon reaching their contractual term. Amounts may vary on a quarterly basis, based on the timing of original issuance. 8 Represents outflows from fixed index annuities and other applicable products, which have varying degrees of predictability due to policyholder actions. 9 Represents partial annuity withdrawals to meet retirement income needs within contractual annual limits. 10 Represents outflows from policies that no longer have an active surrender charge in force. 11 Represents outflows from policies with an active surrender charge in force. 12 Strategic reinsurance transaction outflows include the cession of certain inforce funding agreements to Catalina General Insurance Ltd. (Catalina) in 4Q'22 and the portion of the reinsurance business recaptured by Venerable Insurance and Annuity Company (VIAC) in 3Q'23. 13 The outflow rate is calculated as outflows attributable to Athene divided by Athene average net invested assets for the respective period, on an annualized basis.
8
Condensed Consolidated Balance Sheets
Unaudited (in millions, except percentages)
December 31, 2022 September 30, 2023 Δ
ASSETS
Investments
Available-for-sale securities, at fair value
 $ 102,404 $ 115,715 13 %
Trading securities, at fair value
 1,595 1,592 - %
Equity securities 1,487 1,316 (11) %
Mortgage loans, at fair value 27,454 37,978 38 %
Investment funds
 79 124 57 %
Policy loans
 347 336 (3) %
Funds withheld at interest
 32,880 25,953 (21) %
Derivative assets
 3,309 4,571 38 %
Short-term investments 2,160 527 (76) %
Other investments 773 947 23 %
Total investments
 172,488 189,059 10 %
Cash and cash equivalents
 7,779 9,996 28 %
Restricted cash
 628 1,218 94 %
Investments in related parties
Available-for-sale securities, at fair value
 9,821 13,985 42 %
Trading securities, at fair value
 878 871 (1) %
Equity securities, at fair value
 279 304 9 %
Mortgage loans, at fair value 1,302 1,234 (5) %
Investment funds
 1,569 1,604 2 %
Funds withheld at interest
 9,808 6,620 (33) %
Short-term investments - 949 NM
Other investments, at fair value 303 327 8 %
Accrued investment income
 1,328 1,792 35 %
Reinsurance recoverable
 4,358 4,058 (7) %
Deferred acquisition costs, deferred sales inducements and value of business acquired
 4,466 5,448 22 %
Goodwill 4,058 4,060 - %
Other assets
 8,693 8,628 (1) %
Assets of consolidated variable interest entities
Investments
Trading securities, at fair value 1,063 2,133 101 %
Mortgage loans, at fair value 2,055 2,042 (1) %
Investment funds, at fair value 12,480 15,090 21 %
Other investments, at fair value 101 94 (7) %
Cash and cash equivalents 362 152 (58) %
Other assets 112 99 (12) %
Total assets
 $ 243,931 $ 269,763 11 %
9
Condensed Consolidated Balance Sheets, continued
Unaudited (in millions, except percentages)
December 31, 2022 September 30, 2023 Δ
LIABILITIES
Interest sensitive contract liabilities
 $ 173,616 $ 189,065 9 %
Future policy benefits
 42,110 46,672 11 %
Market risk benefits 2,970 3,021 2 %
Debt 3,658 3,634 (1) %
Derivative liabilities
 1,646 1,892 15 %
Payables for collateral on derivatives and securities to repurchase
 6,707 7,652 14 %
Other liabilities
 1,860 2,543 37 %
Liabilities of consolidated variable interest entities 815 1,255 54 %
Total liabilities 233,382 255,734 10 %
EQUITY
Preferred stock
 - - NM
Common stock
 - - NM
Additional paid-in capital 18,119 19,447 7 %
Retained deficit (3,640) (2,831) 22 %
Accumulated other comprehensive loss (7,321) (8,079) (10) %
Total Athene Holding Ltd. shareholders' equity 7,158 8,537 19 %
Noncontrolling interests
 3,391 5,492 62 %
Total equity 10,549 14,029 33 %
Total liabilities and equity $ 243,931 $ 269,763 11 %
10
Net Invested Assets (Management view) & Agency Ratings
Unaudited (in millions, except percentages)
December 31, 2022 September 30, 2023
Invested Asset Value1
 Percent of Total
Invested Asset Value1
 Percent of Total
NET INVESTED ASSETS
Corporate
 $ 80,800 41.1 % $ 81,735 39.3 %
CLO
 19,881 10.1 % 20,569 9.9 %
Credit
 100,681 51.2 % 102,304 49.2 %
CML
 23,750 12.1 % 24,793 11.9 %
RML
 11,147 5.7 % 16,129 7.7 %
RMBS 7,363 3.7 % 7,861 3.8 %
CMBS
 4,495 2.3 % 5,155 2.5 %
Real estate
 46,755 23.8 % 53,938 25.9 %
ABS
 20,680 10.5 % 21,363 10.3 %
Alternative investments
 12,079 6.1 % 11,793 5.7 %
State, municipal, political subdivisions and foreign government
 2,715 1.4 % 2,618 1.2 %
Equity securities
 1,737 0.9 % 1,704 0.8 %
Short-term investments
 1,930 1.0 % 1,076 0.5 %
US government and agencies 2,691 1.4 % 3,812 1.8 %
Other investments
 41,832 21.3 % 42,366 20.3 %
Cash and equivalents 5,481 2.8 % 7,497 3.6 %
Policy loans and other 1,702 0.9 % 1,990 1.0 %
Net invested assets $ 196,451 100.0 % $ 208,095 100.0 %
A.M. Best Standard & Poor's Fitch Moody's
FINANCIAL STRENGTH RATINGS
Athene Annuity & Life Assurance Company
 A A+ A+ A1
Athene Annuity and Life Company
 A A+ A+ A1
Athene Annuity & Life Assurance Company of New York
 A A+ A+ A1
Athene Life Insurance Company of New York A NR NR NR
Athene Annuity Re Ltd. A A+ A+ A1
Athene Life Re Ltd. A A+ A+ A1
Athene Life Re International Ltd. A A+ A+ A1
Athene Co-Invest Reinsurance Affiliate 1A Ltd. and Athene Co-Invest Reinsurance Affiliate 1B Ltd. A A+ A+ A1
Athene Co-Invest Reinsurance Affiliate 2A Ltd. and Athene Co-Invest Reinsurance Affiliate 2B Ltd. A A+ A+ A1
Athene Co-Invest Reinsurance Affiliate International Ltd. A A+ A+ A1
CREDIT RATINGS
Athene Holding Ltd. bbb+ A- A- NR
Senior notes bbb+ A- BBB+ Baa1
1 Please refer to Notes to the Financial Supplement section for discussion on net invested assets including net alternative investments and Non-GAAP Measure Reconciliations for the reconciliation of investments, including related parties, to net invested assets. Net invested assets include our economic ownership of ACRA investments but do not include the investments associated with the noncontrolling interests.
11
Net Alternative Investments (Management view)
Unaudited (in millions, except percentages)
December 31, 2022 September 30, 2023
Invested Asset Value1
 Percent of Total
Invested Asset Value1
 Percent of Total
NET ALTERNATIVE INVESTMENTS
Strategic origination platforms
Wheels Donlen $ 662 5.5 % $ 603 5.1 %
Redding Ridge 624 5.2 % 583 5.0 %
NNN Lease 579 4.8 % 488 4.1 %
MidCap Financial 604 5.0 % 543 4.6 %
Foundation Home Loans 302 2.5 % 253 2.2 %
PK AirFinance 251 2.1 % 251 2.1 %
Aqua Finance 267 2.2 % 222 1.9 %
Other 308 2.5 % 237 2.0 %
Total strategic origination platforms 3,597 29.8 % 3,180 27.0 %
Strategic retirement services platforms
Athora 1,012 8.4 % 1,113 9.4 %
Catalina 417 3.4 % 403 3.4 %
FWD 400 3.3 % 400 3.4 %
Challenger 294 2.4 % 272 2.3 %
Venerable 241 2.0 % 207 1.8 %
Other 20 0.2 % - - %
Total strategic retirement services platforms 2,384 19.7 % 2,395 20.3 %
Apollo and other fund investments
Equity
Real estate 1,212 10.0 % 1,029 8.7 %
Traditional private equity 947 7.8 % 1,243 10.6 %
Other 189 1.6 % 175 1.5 %
Total equity 2,348 19.4 % 2,447 20.8 %
Hybrid
Real estate 1,289 10.7 % 1,120 9.4 %
Other 1,315 10.9 % 1,297 11.0 %
Total hybrid 2,604 21.6 % 2,417 20.4 %
Yield 885 7.3 % 823 7.0 %
Total Apollo and other fund investments 5,837 48.3 % 5,687 48.2 %
Other2
 261 2.2 % 531 4.5 %
Net alternative investments3
 $ 12,079 100.0 % $ 11,793 100.0 %
1 Please refer to Notes to the Financial Supplement for discussion on net invested assets including net alternative investments and Non-GAAP Measure Reconciliations for the reconciliations of investments, including related parties, to net invested assets and investment funds, including related parties and VIEs, to net alternative investments. Net invested assets include our economic ownership of ACRA investments but do not include the investments associated with the noncontrolling interests. Net alternative invested asset values reflect Athene's ownership of Apollo Aligned Alternatives, L.P. (AAA). Athene's ownership percentage of AAA was approximately 71%, 75%, 77% and 81% as of September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, respectively. 2 Other primarily includes cash and royalties. 3 Net alternative investments do not correspond to total investment funds, including related parties and VIEs, on our condensed consolidated balance sheets. Net alternative investments adjusts the GAAP presentation to include certain equity securities that are included in AFS or trading securities in the GAAP view, investment funds included in our funds withheld at interest and modco reinsurance portfolios, royalties and other investments.
12
Credit Quality of Securities
Unaudited (in millions, except percentages)
December 31, 2022 September 30, 2023
CREDIT QUALITY OF AFS SECURITIES (GAAP VIEW)
 Fair Value Percent of Total Fair Value Percent of Total
NAIC designation
1 A-G $ 58,470 52.1 % $ 71,105 54.8 %
2 A-C 49,067 43.7 % 54,174 41.8 %
Total investment grade
 107,537 95.8 % 125,279 96.6 %
3 A-C 3,302 3.0 % 3,019 2.3 %
4 A-C 925 0.8 % 898 0.7 %
5 A-C 190 0.2 % 167 0.1 %
6 271 0.2 % 337 0.3 %
Total below investment grade
 4,688 4.2 % 4,421 3.4 %
Total AFS securities including related parties
 $ 112,225 100.0 % $ 129,700 100.0 %
NRSRO designation
AAA/AA/A $ 51,926 46.3 % $ 63,275 48.8 %
BBB 44,783 39.9 % 50,049 38.6 %
Non-rated1
 8,985 8.0 % 9,951 7.7 %
Total investment grade2
 105,694 94.2 % 123,275 95.1 %
BB
 3,176 2.8 % 3,036 2.3 %
B
 749 0.7 % 824 0.6 %
CCC
 1,055 0.9 % 1,020 0.8 %
CC and lower
 584 0.5 % 735 0.6 %
Non-rated1
 967 0.9 % 810 0.6 %
Total below investment grade
 6,531 5.8 % 6,425 4.9 %
Total AFS securities including related parties
 $ 112,225 100.0 % $ 129,700 100.0 %
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 ratings methodology. 2 We view the NAIC designation methodology as the most appropriate way to view our AFS portfolio when evaluating credit risk since a portion of our holdings were purchased at a significant discount to par. With respect to loan-backed and structured securities, the NAIC designation methodology differs in significant respects from the NRSRO rating methodology. NRSRO ratings methodology is focused on the likelihood of recovery of all contractual payments, including principal at par regardless of entry price, while the NAIC designation methodology considers an investment at amortized cost, and the likelihood of recovery of that book value.
13
Credit Quality of Net Invested Assets (Management view)
Unaudited (In millions, except percentages)
December 31, 2022 September 30, 2023 December 31, 2022 September 30, 2023
Invested Asset Value1
 % of Total
Invested Asset Value1
 % of Total
Invested Asset Value1
 % of Total
Invested Asset Value1
 % of Total
CREDIT QUALITY OF NET INVESTED ASSETS
CREDIT QUALITY OF NET INVESTED ASSETS
NAIC designation
NRSRO designation
1 A-G $ 71,471 50.8 % $ 76,652 53.2 % AAA/AA/A $ 60,869 43.3 % $ 66,137 45.9 %
2 A-C 62,115 44.2 % 61,553 42.7 % BBB 56,029 39.9 % 55,951 38.8 %
Non-rated 506 0.4 % 287 0.2 %
Non-rated2
 14,686 10.5 % 14,062 9.7 %
Total investment grade
 134,092 95.4 % 138,492 96.1 % Total investment grade 131,584 93.7 % 136,150 94.4 %
3 A-C 4,471 3.2 % 3,745 2.6 %
BB
 4,217 3.0 % 3,469 2.4 %
4 A-C 1,259 0.9 % 1,099 0.8 %
B
 990 0.7 % 989 0.7 %
5 A-C 407 0.3 % 341 0.2 %
CCC
 1,431 1.0 % 1,297 0.9 %
6 326 0.2 % 512 0.3 %
CC and lower
 906 0.6 % 986 0.7 %
Non-rated - - % - - %
Non-rated2
 1,427 1.0 % 1,298 0.9 %
Total below investment grade
 6,463 4.6 % 5,697 3.9 %
Total below investment grade
 8,971 6.3 % 8,039 5.6 %
Total NAIC designated assets3
 140,555 100.0 % 144,189 100.0 %
Total NRSRO designated assets3
 140,555 100.0 % 144,189 100.0 %
Assets without NAIC designation
Assets without NRSRO designation
Commercial mortgage loans
Commercial mortgage loans
CM1
 3,998 16.8 % 3,333 13.4 %
CM1
 3,998 16.8 % 3,333 13.4 %
CM2
 14,008 59.0 % 15,834 63.9 %
CM2
 14,008 59.0 % 15,834 63.9 %
CM3
 5,216 22.0 % 5,257 21.2 %
CM3
 5,216 22.0 % 5,257 21.2 %
CM4
 447 1.9 % 288 1.2 %
CM4
 447 1.9 % 288 1.2 %
CM5
 81 0.3 % 81 0.3 %
CM5
 81 0.3 % 81 0.3 %
CM6
 - - % - - %
CM6
 - - % - - %
CM7
 - - % - - %
CM7
 - - % - - %
Total CMLs
 23,750 100.0 % 24,793 100.0 %
Total CMLs
 23,750 100.0 % 24,793 100.0 %
Residential mortgage loans
Residential mortgage loans
In good standing
 10,636 95.4 % 15,436 95.7 %
In good standing
 10,636 95.4 % 15,436 95.7 %
90 days late
 422 3.8 % 583 3.6 %
90 days late
 422 3.8 % 583 3.6 %
In foreclosure
 89 0.8 % 110 0.7 %
In foreclosure
 89 0.8 % 110 0.7 %
Total RMLs
 11,147 100.0 % 16,129 100.0 %
Total RMLs
 11,147 100.0 % 16,129 100.0 %
Alternative investments
 12,079 11,793
Alternative investments
 12,079 11,793
Cash and equivalents 5,481 7,497 Cash and equivalents 5,481 7,497
Equity securities
 1,737 1,704
Equity securities
 1,737 1,704
Other4
 1,702 1,990
Other4
 1,702 1,990
Net invested assets
 $ 196,451 $ 208,095
Net invested assets
 $ 196,451 $ 208,095
1 Please refer to Notes to the Financial Supplement section for discussion on net invested assets and Non-GAAP Measure Reconciliations section for the reconciliation of total investments, including related parties, to net invested assets. 2 Securities denoted as non-rated by the NRSRO were classified as investment or non-investment grade according to the security's respective NAIC designation. With respect to modeled LBaSS, the NAIC designation methodology differs in significant respects from the NRSRO ratings methodology. 3 NAIC and NRSRO designations include corporates, CLO, RMBS, CMBS, ABS, state, municipal, political subdivisions and foreign government securities, short-term investments and U.S. government and agency securities. 4 Other includes policy loans, accrued interest, and other net invested assets.
14
Credit Quality of Net Invested Assets - ABS and CLOs (Management view)
Unaudited (In millions, except percentages)
December 31, 2022 September 30, 2023 December 31, 2022 September 30, 2023
Invested Asset Value1
 % of Total
Invested Asset Value1
 % of Total
Invested Asset Value1
 % of Total
Invested Asset Value1
 % of Total
CREDIT QUALITY OF ABS - NAIC DESIGNATION CREDIT QUALITY OF ABS - NRSRO DESIGNATION
1 A-G $ 12,261 59.3 % $ 12,710 59.5 % AAA/AA/A $ 11,780 57.0 % $ 12,185 57.0 %
2 A-C 7,301 35.3 % 7,613 35.6 % BBB 7,248 35.0 % 7,720 36.1 %
Non-rated - - % - - %
Non-rated2
 535 2.6 % 418 2.0 %
Total investment grade 19,562 94.6 % 20,323 95.1 % Total investment grade 19,563 94.6 % 20,323 95.1 %
3 A-C 710 3.4 % 603 2.8 % BB 709 3.4 % 619 2.9 %
4 A-C 229 1.1 % 264 1.2 % B 229 1.1 % 248 1.1 %
5 A-C 157 0.8 % 139 0.7 % CCC 33 0.2 % 12 0.1 %
6 22 0.1 % 34 0.2 % CC and lower 22 0.1 % 34 0.2 %
Non-rated - - % - - %
Non-rated2
 124 0.6 % 127 0.6 %
Total below investment grade 1,118 5.4 % 1,040 4.9 % Total below investment grade 1,117 5.4 % 1,040 4.9 %
ABS net invested assets $ 20,680 100.0 % $ 21,363 100.0 % ABS net invested assets $ 20,680 100.0 % $ 21,363 100.0 %
CREDIT QUALITY OF CLOs - NAIC DESIGNATION CREDIT QUALITY OF CLOs - NRSRO DESIGNATION
1 A-G $ 12,455 62.7 % $ 13,237 64.4 % AAA/AA/A $ 12,455 62.7 % $ 13,237 64.4 %
2 A-C 7,278 36.6 % 7,189 34.9 % BBB 7,278 36.6 % 7,189 34.9 %
Non-rated - - % - - %
Non-rated2
 - - % - - %
Total investment grade 19,733 99.3 % 20,426 99.3 % Total investment grade 19,733 99.3 % 20,426 99.3 %
3 A-C 128 0.6 % 124 0.6 % BB 128 0.6 % 124 0.6 %
4 A-C 20 0.1 % 19 0.1 % B 20 0.1 % 19 0.1 %
5 A-C - - % - - % CCC - - % - - %
6 - - % - - % CC and lower - - % - - %
Non-rated - - % - - %
Non-rated2
 - - % - - %
Total below investment grade 148 0.7 % 143 0.7 % Total below investment grade 148 0.7 % 143 0.7 %
CLO net invested assets $ 19,881 100.0 % $ 20,569 100.0 % CLO net invested assets $ 19,881 100.0 % $ 20,569 100.0 %
1 Please refer to Notes to the Financial Supplement section for discussion on net invested assets and Non-GAAP Measure Reconciliations section for the reconciliation of total investments, including related parties, to net invested assets. 2 Securities denoted as non-rated by the NRSRO were classified as investment or non-investment grade according to the security's respective NAIC designation. With respect to modeled LBaSS, the NAIC designation methodology differs in significant respects from the NRSRO ratings methodology.
15
Credit Quality of Net Invested Assets - RMBS and CMBS (Management view)
Unaudited (In millions, except percentages)
December 31, 2022 September 30, 2023 December 31, 2022 September 30, 2023
Invested Asset Value1
 % of Total
Invested Asset Value1
 % of Total
Invested Asset Value1
 % of Total
Invested Asset Value1
 % of Total
CREDIT QUALITY OF RMBS - NAIC DESIGNATION CREDIT QUALITY OF RMBS - NRSRO DESIGNATION
1 A-G $ 6,125 83.2 % $ 6,768 86.1 % AAA/AA/A $ 2,026 27.5 % $ 2,472 31.4 %
2 A-C 347 4.7 % 349 4.4 % BBB 735 10.0 % 478 6.1 %
Non-rated - - % - - %
Non-rated2
 1,647 22.4 % 2,194 27.9 %
Total investment grade 6,472 87.9 % 7,117 90.5 % Total investment grade 4,408 59.9 % 5,144 65.4 %
3 A-C 455 6.2 % 393 5.0 % BB 140 1.9 % 110 1.4 %
4 A-C 309 4.2 % 211 2.7 % B 141 1.9 % 127 1.6 %
5 A-C 102 1.4 % 89 1.1 % CCC 1,333 18.1 % 1,197 15.2 %
6 25 0.3 % 51 0.7 % CC and lower 834 11.3 % 877 11.2 %
Non-rated - - % - - %
Non-rated2
 507 6.9 % 406 5.2 %
Total below investment grade 891 12.1 % 744 9.5 % Total below investment grade 2,955 40.1 % 2,717 34.6 %
RMBS net invested assets $ 7,363 100.0 % $ 7,861 100.0 % RMBS net invested assets $ 7,363 100.0 % $ 7,861 100.0 %
CREDIT QUALITY OF CMBS - NAIC DESIGNATION CREDIT QUALITY OF CMBS - NRSRO DESIGNATION
1 A-G $ 3,191 71.0 % $ 3,877 75.2 % AAA/AA/A $ 2,262 50.3 % $ 3,028 58.7 %
2 A-C 811 18.0 % 827 16.0 % BBB 675 15.0 % 1,033 20.0 %
Non-rated - - % - - %
Non-rated2
 610 13.6 % 292 5.7 %
Total investment grade 4,002 89.0 % 4,704 91.2 % Total investment grade 3,547 78.9 % 4,353 84.4 %
3 A-C 295 6.6 % 178 3.5 % BB 700 15.6 % 473 9.2 %
4 A-C 80 1.8 % 142 2.8 % B 167 3.7 % 218 4.2 %
5 A-C 78 1.7 % 80 1.5 % CCC 64 1.4 % 88 1.7 %
6 40 0.9 % 51 1.0 % CC and lower 17 0.4 % 23 0.5 %
Non-rated - - % - - %
Non-rated2
 - - % - - %
Total below investment grade 493 11.0 % 451 8.8 % Total below investment grade 948 21.1 % 802 15.6 %
CMBS net invested assets $ 4,495 100.0 % $ 5,155 100.0 % CMBS net invested assets $ 4,495 100.0 % $ 5,155 100.0 %
1 Please refer to Notes to the Financial Supplement section for discussion on net invested assets and Non-GAAP Measure Reconciliations section for the reconciliation of total investments, including related parties, to net invested assets. 2 Securities denoted as non-rated by the NRSRO were classified as investment or non-investment grade according to the security's respective NAIC designation. With respect to modeled LBaSS, the NAIC designation methodology differs in significant respects from the NRSRO ratings methodology.
16
Net Reserve Liabilities & Rollforwards
Unaudited (in millions, except percentages)
December 31, 2022 September 30, 2023
Dollars Percent of Total Dollars Percent of Total
NET RESERVE LIABILITIES
Indexed annuities $ 85,163 48.4 % $ 83,955 45.2 %
Fixed rate annuities
 39,553 22.5 % 47,782 25.7 %
Total deferred annuities
 124,716 70.9 % 131,737 70.9 %
Pension group annuities 20,614 11.7 % 23,598 12.7 %
Payout annuities
 7,589 4.3 % 4,558 2.5 %
Funding agreements1
 21,538 12.2 % 24,413 13.1 %
Life and other
 1,513 0.9 % 1,438 0.8 %
Total net reserve liabilities
 $ 175,970 100.0 % $ 185,744 100.0 %
Quarterly Trends Δ Year-to-Date Δ
3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 Q/Q Y/Y 2022 2023 Y/Y
NET RESERVE LIABILITY ROLLFORWARD
Net reserve liabilities - beginning $ 170,703 $ 173,539 $ 175,970 $ 184,891 $ 193,431 5 % 13 % $ 168,323 $ 175,970 5 %
Gross inflows2
 13,161 11,511 12,111 18,989 13,257 (30) % 1 % 37,192 44,357 19 %
Inflows attributable to ACRA noncontrolling interests (1,993) (1,305) (60) (3,751) (3,192) (15) % 60 % (7,448) (7,003) (6) %
Net inflows 11,168 10,206 12,051 15,238 10,065 (34) % (10) % 29,744 37,354 26 %
Net withdrawals
 (5,803) (4,925) (5,531) (7,891) (6,827) (13) % 18 % (13,937) (20,249) 45 %
Strategic reinsurance outflows3
 - (4,862) - - (2,723) NM NM - (2,723) NM
ACRA ownership changes4
 - - - - (7,023) NM NM - (7,023) NM
Other reserve changes
 (2,529) 2,012 2,401 1,193 (1,179) NM 53 % (10,591) 2,415 NM
Net reserve liabilities - ending
 $ 173,539 $ 175,970 $ 184,891 $ 193,431 $ 185,744 (4) % 7 % $ 173,539 $ 185,744 7 %
ACRA NONCONTROLLING INTERESTS RESERVE LIABILITY ROLLFORWARD
Reserve liabilities - beginning $ 35,522 $ 35,463 $ 35,981 $ 35,281 $ 37,775 7 % 6 % $ 33,537 $ 35,981 7 %
Inflows 1,993 1,305 60 3,751 3,192 (15) % 60 % 7,448 7,003 (6) %
Withdrawals
 (1,197) (1,277) (1,348) (1,244) (1,188) (5) % (1) % (2,871) (3,780) 32 %
ACRA ownership changes4
 - - - - 7,023 NM NM - 7,023 NM
Other reserve changes
 (855) 490 588 (13) (226) NM 74 % (2,651) 349 NM
Reserve liabilities - ending
 $ 35,463 $ 35,981 $ 35,281 $ 37,775 $ 46,576 23 % 31 % $ 35,463 $ 46,576 31 %
Note: Please refer to Notes to the Financial Supplement section and the Non-GAAP Measure Reconciliations for discussion on net reserve liabilities. Net reserve liabilities include our economic ownership of ACRA reserve liabilities but do not include the reserve liabilities associated with the noncontrolling interests. 1 Funding agreements are comprised of funding agreements issued under our FABN and FABR programs, funding agreements issued to the FHLB and long-term repurchase agreements. 2 Gross inflows equal inflows from our retail, flow reinsurance and institutional channels as well as inflows for life and products other than deferred annuities or our institutional products, renewal inflows on older blocks of business, annuitizations and foreign currency translation adjustments on large transactions between the transaction date and the translation period. Gross inflows include all inflows sourced by Athene, including all of the inflows reinsured to ACRA. 3 Strategic reinsurance outflows include the cession of certain inforce funding agreements to Catalina in 4Q'22 and the portion of the reinsurance business recaptured by VIAC in 3Q'23. 4 Effective July 1, 2023, ADIP II purchased 50% of ACRA 2's economic interests, resulting in approximately $6.8 billion of inflows attributable to Athene for the first six months of 2023 being retroactively attributed to ADIP II. The ADIP II reserve liabilities at inception on July 1, 2023 were $7.0 billion.
17
Deferred Annuity Liability Characteristics
Unaudited (in millions, except percentages)
Surrender charge (gross) Percent of total Surrender charge (net of MVA) Percent of total
SURRENDER CHARGE PERCENTAGES ON DEFERRED ANNUITIES NET ACCOUNT VALUE
No Surrender Charge
 $ 27,414 21.6 % $ 27,414 21.6 %
0.0% <>2.0%
 3,870 3.1 % 2,218 1.8 %
2.0% <>4.0%
 6,732 5.3 % 4,565 3.6 %
4.0% <>6.0%
 12,761 10.1 % 7,968 6.3 %
6.0% or greater 75,928 59.9 % 84,540 66.7 %
$ 126,705 100.0 % $ 126,705 100.0 %
Surrender charge (gross) MVA benefit Surrender charge (net)
Aggregate surrender charge protection
 5.8 % 2.4 % 8.2 %
Deferred annuities Percent of total Average surrender charge (gross)
YEARS OF SURRENDER CHARGE REMAINING ON DEFERRED ANNUITIES NET ACCOUNT VALUE
No Surrender Charge
 $ 27,414 21.6 % - %
Less than 2
 18,822 14.9 % 5.6 %
2 to less than 4
 23,292 18.4 % 6.5 %
4 to less than 6
 28,527 22.5 % 7.3 %
6 to less than 8
 12,081 9.5 % 8.8 %
8 to less than 10
 13,435 10.6 % 8.9 %
10 or greater
 3,134 2.5 % 14.2 %
$ 126,705 100.0 %
18
Notes to the Financial Supplement

KEY OPERATING AND NON-GAAP MEASURES

In addition to our results presented in accordance with accounting principles generally accepted in the United States of America (US GAAP), we present certain financial information that includes non-GAAP measures. Management believes the use of these non-GAAP measures, together with the relevant US GAAP measures, provides information that may enhance an investor's understanding of our results of operations and the underlying profitability drivers of our business. The majority of these non-GAAP measures are intended to remove from the results of operations the impact of market volatility (other than with respect to alternative investments), which consists of investment gains (losses), net of offsets and non-operating change in insurance liabilities and related derivatives, both defined below, as well as integration, restructuring, stock compensation and certain other expenses which are not part of our underlying profitability drivers, as such items fluctuate from period to period in a manner inconsistent with these drivers. These measures should be considered supplementary to our results in accordance with US GAAP and should not be viewed as a substitute for the corresponding US GAAP measures.
SPREAD RELATED EARNINGS (SRE) AND NET SPREAD
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 certain equity tranche securities) and mortgage loans, investments held under the fair value option, derivative gains and losses not hedging FIA index credits, and the change in credit loss allowances recognized in operations net of the change in AmerUs Closed Block fair value reserve related to the corresponding change in fair value of investments. The change in fair value of our investment in Apollo was included in prior years. Investment gains and losses are net of offsets related to the market value adjustments (MVA) associated with surrenders or terminations of contracts.
•Non-operating Change in Insurance Liabilities and Related Derivatives
•Change in Fair Values of Derivatives and Embedded Derivatives - FIAs-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. 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 our repurchases of funding agreement backed notes.
•Change in Fair Value of Market Risk Benefits-Consists primarily of volatility in capital market inputs used in the measurement at fair value of our market risk benefits, including certain impacts from changes in interest rates, equity returns and implied equity volatilities.
•Non-operating Change in Liability for Future Policy Benefits-Consists of the non-economic loss incurred at issuance for certain pension group annuities and other payout annuities with life contingencies when valuation interest rates prescribed by US GAAP are lower than the net investment earned rates, adjusted for profit, assumed in pricing. For such contracts with non-economic US GAAP losses, the SRE reserve accretes interest using an imputed discount rate that produces zero gain or loss at issuance.
•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 in prior years, 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.
Net spread is a non-GAAP measure used to evaluate our financial performance and profitability. Net spread is computed using our spread related earnings divided by average net invested assets for the relevant period. To enhance the ability to analyze this measure across periods, interim periods are annualized. While we believe this metric 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 ROA presented under GAAP.
NORMALIZED SRE AND NORMALIZED NET SPREAD
Normalized spread related earnings and normalized net spread reflect the SRE and net spread adjustments as described above, as well as adjustments to exclude notable items and normalize alternative investment income to an 11% long-term average annual return. We use these normalized measures to assess the long-term performance of the business against projected earnings, by excluding items that are expected to be infrequent or not indicative of the ongoing operations of the business. We view normalized non-GAAP measures as additional measures that provide insight to management and investors on the historical, period-to-period comparability of our key non-GAAP operating measures, as well as a basis for developing more realistic expectations for future performance.
19
Notes to the Financial Supplement, continued

NET INVESTMENT SPREAD

Net investment spread is a key measure of profitability used in analyzing the trends of our core business operations. Net investment spread measures our investment performance plus our strategic capital management fees, less our total cost of funds. Net investment earned rate is a key measure of our investment performance while cost of funds is a key measure of the cost of our policyholder benefits and liabilities. Strategic capital management fees consist of management fees received by us for business managed for others, primarily the non-controlling interest portion of Athene's business ceded to ACRA.
•Net investment earned rate is a non-GAAP measure we use to evaluate the performance of our net invested assets. 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 earnings add (a) alternative investment gains and losses, (b) gains and losses related to certain equity securities, (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 noncontrolling interests. The gain or loss on our investment in Apollo was removed in prior years. We include the income and assets supporting our change in fair value of reinsurance assets by evaluating the underlying investments of the funds withheld at interest receivables and we include the net investment income from those underlying investments which does not correspond to the US GAAP presentation of change in fair value of reinsurance assets. We exclude the income and assets supporting business that we have exited through ceded reinsurance including funds withheld agreements. We believe the adjustments for reinsurance provide a net investment earned rate on the assets for which we have economic exposure. We believe a measure like net investment earned rate is useful in analyzing the trends of our core business operations, profitability and pricing discipline. While we believe net investment earned rate 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 net investment income presented under US GAAP.
•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 interests. Cost of crediting on deferred annuities is the interest credited to the policyholders on our fixed strategies as well as the option costs on the indexed annuity strategies. With respect to FIAs, the cost of providing index credits includes the expenses incurred to fund the annual index credits, and where applicable, minimum guaranteed interest credited. Cost of crediting on institutional products is comprised of (1) pension group annuity costs, including interest credited, benefit payments and other reserve changes, net of premiums received when issued, and (2) funding agreement costs, including the interest payments and other reserve changes. Additionally, cost of crediting includes forward points gains and losses on foreign exchange derivative hedges. Other liability costs include DAC, DSI and VOBA amortization, certain market risk benefit costs, the cost of liabilities on products other than deferred annuities and institutional products, premiums and certain product charges and other revenues. We include the costs related to business added through assumed reinsurance transactions and exclude the costs related to business that we have exited through ceded reinsurance transactions. Cost of funds is computed as the total liability costs divided by the average net invested assets for the relevant period. To enhance the ability to analyze these measures across periods, interim periods are annualized. We believe a measure like cost of funds is useful in analyzing the trends of our core business operations, profitability and pricing discipline. While we believe cost of funds is a meaningful financial metric and enhances our understanding of the underlying profitability drivers of our business, it should not be used as a substitute for total benefits and expenses presented under US GAAP.
NORMALIZED NET INVESTMENT SPREAD
Normalized net investment spread reflects the net investment spread adjustments as described above, as well as adjustments to exclude notable items and normalize alternative investment income to an 11% long-term return. We use this normalized measure to assess the performance of the business against projected earnings, by excluding items that are expected to be infrequent or not indicative of the ongoing operations of the business. We view normalized non-GAAP measures as additional measures that provide insight to management and investors on the historical, period-to-period comparability of our key non-GAAP operating measures, as well as a basis for developing more realistic expectations for future performance.
OTHER OPERATING EXPENSES
Other operating expenses excludes integration, restructuring and other non-operating expenses, stock compensation and long-term incentive plan expenses, interest expense, policy acquisition expenses and the proportionate share of the ACRA operating expenses associated with the noncontrolling interests. We believe a measure like other operating expenses is useful in analyzing the trends of our core business operations and profitability. While we believe other operating expenses is a meaningful financial metric and enhances our understanding of the underlying profitability drivers of our business, it should not be used as a substitute for policy and other operating expenses presented under US GAAP.
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 tax. 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, reinsurance assets and mortgage loans. Except with respect to reinvestment activity relating to acquired blocks of businesses, we typically buy and hold investments to maturity throughout the duration of market fluctuations, therefore, the period-over-period impacts in unrealized gains and losses are not necessarily indicative of current operating fundamentals or future performance. Adjusted debt-to-capital ratio should not be used as a substitute for the debt-to-capital ratio. However, we believe the adjustments to shareholders' equity are significant to gaining an understanding of our capitalization, debt utilization and debt capacity.
NET 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 include (a) total investments on the consolidated balance sheets, with AFS securities, trading securities and mortgage loans at cost or amortized cost, excluding derivatives, (b) cash and cash equivalents and restricted cash, (c) investments in related parties, (d) accrued investment income, (e) VIE assets, liabilities and noncontrolling interest adjustments, (f) net investment payables and receivables, (g) policy loans ceded (which offset the direct policy loans in total investments) and (h) an adjustment for the allowance for credit losses. Net invested assets exclude 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 include our proportionate share of ACRA investments, based on our economic ownership, but do not include the proportionate share of investments associated with the noncontrolling interests. Our net invested assets are averaged over the number of quarters in the relevant period to compute our net investment earned rate for such period. While we believe net invested assets is a meaningful financial metric and enhances our understanding of the underlying drivers of our investment portfolio, it should not be used as a substitute for total investments, including related parties, presented under US GAAP.
20
Notes to the Financial Supplement, continued
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 are used to analyze the costs of our liabilities. Net reserve liabilities include (a) interest sensitive contract liabilities, (b) future policy benefits, (c) net market risk benefits, (d) long-term repurchase obligations, (e) dividends payable to policyholders and (f) 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 interests. Net reserve liabilities are 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 insurance business following acquisitions. For such transactions, US GAAP requires the ceded liabilities and related reinsurance recoverables to continue to be recorded in our consolidated financial statements despite the transfer of economic risk to the counterparty in connection with the reinsurance transaction. We include the underlying liabilities assumed through modco reinsurance agreements in our net reserve liabilities calculation in order to match the liabilities with the expenses incurred. While we believe net reserve liabilities is a meaningful financial metric and enhances our understanding of the underlying profitability drivers of our business, it should not be used as a substitute for total liabilities presented under US GAAP.
SALES
Sales statistics do not correspond to revenues under US GAAP but are used as relevant measures to understand our business performance as it relates to inflows generated during a specific period of time. Our sales statistics include inflows for fixed rate annuities and FIAs and align with the LIMRA definition of all money paid into an individual annuity, including money paid into new contracts with initial purchase occurring in the specified period and existing contracts with initial purchase occurring prior to the specified period (excluding internal transfers). We believe sales is a meaningful metric that enhances our understanding of our business performance and is not the same as premiums presented in our condensed consolidated statements of income (loss).
21
Non-GAAP Reconciliations
Unaudited (in millions, except percentages)
Quarterly Trends
3Q'22 4Q'22 1Q'23 2Q'23 3Q'23
RECONCILIATION OF TOTAL AHL SHAREHOLDERS' EQUITY TO TOTAL ADJUSTED AHL COMMON SHAREHOLDER'S EQUITY
Total AHL shareholders' equity $ 5,133 $ 7,158 $ 8,698 $ 8,701 $ 8,537
Less: Preferred stock 2,667 3,154 3,154 3,154 3,154
Total AHL common shareholder's equity 2,466 4,004 5,544 5,547 5,383
Less: Accumulated other comprehensive loss (8,473) (7,321) (6,148) (6,376) (8,079)
Less: Accumulated change in fair value of reinsurance assets (3,394) (3,127) (2,791) (2,843) (2,807)
Less: Accumulated change in fair value of mortgage loan assets (2,095) (2,201) (2,022) (2,235) (2,820)
Total adjusted AHL common shareholder's equity $ 16,428 $ 16,653 $ 16,505 $ 17,001 $ 19,089
RECONCILIATION OF DEBT-TO-CAPITAL RATIO TO ADJUSTED DEBT-TO-CAPITAL RATIO
Total debt $ 3,271 $ 3,658 $ 3,650 $ 3,642 $ 3,634
Less: Adjustment to arrive at notional debt 271 258 250 242 234
Notional debt $ 3,000 $ 3,400 $ 3,400 $ 3,400 $ 3,400
Total debt $ 3,271 $ 3,658 $ 3,650 $ 3,642 $ 3,634
Total AHL shareholders' equity 5,133 7,158 8,698 8,701 8,537
Total capitalization 8,404 10,816 12,348 12,343 12,171
Less: Accumulated other comprehensive loss (8,473) (7,321) (6,148) (6,376) (8,079)
Less: Accumulated change in fair value of reinsurance assets (3,394) (3,127) (2,791) (2,843) (2,807)
Less: Accumulated change in fair value of mortgage loan assets (2,095) (2,201) (2,022) (2,235) (2,820)
Less: Adjustment to arrive at notional debt 271 258 250 242 234
Total adjusted capitalization $ 22,095 $ 23,207 $ 23,059 $ 23,555 $ 25,643
Debt-to-capital ratio 38.9 % 33.8 % 29.6 % 29.5 % 29.9 %
Accumulated other comprehensive loss (14.7) % (10.5) % (7.8) % (7.9) % (9.4) %
Accumulated change in fair value of reinsurance assets (5.9) % (4.5) % (3.5) % (3.5) % (3.2) %
Accumulated change in fair value of mortgage loan assets (3.7) % (3.2) % (2.6) % (2.8) % (3.3) %
Adjustment to arrive at notional debt (1.0) % (0.9) % (1.0) % (0.9) % (0.7) %
Adjusted debt-to-capital ratio 13.6 % 14.7 % 14.7 % 14.4 % 13.3 %
22
Non-GAAP Reconciliations
Unaudited (in millions, except percentages)
Quarterly Trends Year-to-Date
3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 2022 2023
RECONCILIATION OF NET INCOME (LOSS) AVAILABLE TO AHL COMMON SHAREHOLDER TO NORMALIZED SPREAD RELATED EARNINGS
Net income (loss) available to Athene Holding Ltd. common shareholder $ (622) $ 361 $ 721 $ 396 $ 442 $ (3,412) $ 1,559
Preferred stock dividends 35 36 47 45 44 105 136
Net income (loss) attributable to noncontrolling interests (465) 329 455 54 (155) (2,435) 354
Net income (loss) (1,052) 726 1,223 495 331 (5,742) 2,049
Income tax expense (benefit) (121) 137 163 133 162 (783) 458
Income (loss) before income taxes (1,173) 863 1,386 628 493 (6,525) 2,507
Less: Total adjustments to income (loss) before income taxes (1,813) 166 699 (171) (379) (8,294) 149
Spread related earnings 640 697 687 799 872 1,769 2,358
Normalization of alternative investment income to 11% 82 14 148 75 96 66 319
Other notable items (42) 35 (25) - (90) (3) (115)
Normalized spread related earnings $ 680 $ 746 $ 810 $ 874 $ 878 $ 1,832 $ 2,562
RECONCILIATION OF NET INVESTMENT INCOME TO NET INVESTMENT EARNINGS
US GAAP net investment income $ 1,843 $ 2,319 $ 2,407 $ 2,717 $ 2,928 $ 5,252 $ 8,052
Change in fair value of reinsurance assets 11 52 70 37 (42) 281 65
VIE earnings and noncontrolling interest 219 197 200 279 264 389 743
Alternative gains (losses) 10 41 (9) 2 1 - (6)
Reinsurance impacts - (41) (64) (69) (66) - (199)
Apollo investment gain - - - - - (33) -
ACRA noncontrolling interests (407) (446) (448) (504) (676) (1,059) (1,628)
Held for trading amortization and other 45 (73) (13) 5 57 34 49
Total adjustments to arrive at net investment earnings
 (122) (270) (264) (250) (462) (388) (976)
Total net investment earnings
 $ 1,721 $ 2,049 $ 2,143 $ 2,467 $ 2,466 $ 4,864 $ 7,076
RECONCILIATION OF NET INVESTMENT INCOME RATE TO NET INVESTMENT EARNED RATE
US GAAP net investment income 3.83 % 4.74 % 4.78 % 5.17 % 5.65 % 3.75 % 5.21 %
Change in fair value of reinsurance assets 0.02 % 0.11 % 0.14 % 0.07 % (0.08) % 0.20 % 0.04 %
VIE earnings and noncontrolling interest 0.46 % 0.40 % 0.40 % 0.53 % 0.51 % 0.28 % 0.48 %
Alternative gains (losses) 0.02 % 0.08 % (0.02) % - % - % - % (0.01) %
Reinsurance impacts - % (0.08) % (0.13) % (0.13) % (0.13) % - % (0.13) %
Apollo investment gain - % - % - % - % - % (0.02) % - %
ACRA noncontrolling interests (0.85) % (0.91) % (0.89) % (0.96) % (1.30) % (0.76) % (1.05) %
Held for trading amortization and other 0.10 % (0.15) % (0.03) % 0.01 % 0.11 % 0.02 % 0.03 %
Total adjustments to arrive at net investment earned rate
 (0.25) % (0.55) % (0.53) % (0.48) % (0.89) % (0.28) % (0.64) %
Net investment earned rate 3.58 % 4.19 % 4.25 % 4.69 % 4.76 % 3.47 % 4.57 %
Average net invested assets $ 192,231 $ 195,804 $ 201,600 $ 210,209 $ 207,312 $ 186,815 $ 206,241
23
Non-GAAP Reconciliations
Unaudited (in millions, except percentages)
Quarterly Trends Year-to-Date
3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 2022 2023
RECONCILIATION OF BENEFITS AND EXPENSES TO COST OF FUNDS
US GAAP benefits and expenses $ 3,483 $ 2,924 $ 2,674 $ 12,058 $ 943 $ 10,361 $ 15,675
Premiums (3,045) (869) (96) (9,041) (26) (10,769) (9,163)
Product charges (184) (193) (198) (207) (217) (525) (622)
Other revenues 26 (10) (13) (7) (123) 38 (143)
FIA option costs 322 342 365 385 374 922 1,124
Reinsurance impacts 12 (19) (37) (38) (41) 36 (116)
Non-operating change in insurance liabilities and embedded derivatives 652 (481) (873) (1,113) 969 3,306 (1,017)
Policy and other operating expenses, excluding policy acquisition expenses (294) (309) (310) (323) (335) (801) (968)
AmerUs Closed Block fair value liability 77 (27) (42) 17 52 318 27
ACRA noncontrolling interests (157) (258) (287) (379) (311) (291) (977)
Other 10 58 52 85 99 2 236
Total adjustments to arrive at cost of funds (2,581) (1,766) (1,439) (10,621) 441 (7,764) (11,619)
Total cost of funds $ 902 $ 1,158 $ 1,235 $ 1,437 $ 1,384 $ 2,597 $ 4,056
RECONCILIATION OF TOTAL BENEFITS AND EXPENSES RATE TO COST OF FUNDS RATE
US GAAP benefits and expenses 7.25 % 5.97 % 5.31 % 22.94 % 1.83 % 7.40 % 10.12 %
Premiums (6.34) % (1.78) % (0.19) % (17.20) % (0.05) % (7.69) % (5.92) %
Product charges (0.38) % (0.39) % (0.39) % (0.39) % (0.42) % (0.38) % (0.40) %
Other revenues 0.06 % (0.02) % (0.03) % (0.01) % (0.24) % 0.03 % (0.09) %
FIA option costs 0.67 % 0.70 % 0.72 % 0.73 % 0.72 % 0.66 % 0.73 %
Reinsurance impacts 0.02 % (0.04) % (0.07) % (0.07) % (0.08) % 0.02 % (0.07) %
Non-operating change in insurance liabilities and embedded derivatives 1.36 % (0.98) % (1.73) % (2.12) % 1.87 % 2.36 % (0.66) %
Policy and other operating expenses, excluding policy acquisition expenses (0.61) % (0.63) % (0.62) % (0.61) % (0.65) % (0.57) % (0.63) %
AmerUs Closed Block fair value liability 0.16 % (0.05) % (0.08) % 0.03 % 0.10 % 0.23 % 0.02 %
ACRA noncontrolling interests (0.33) % (0.53) % (0.57) % (0.72) % (0.60) % (0.21) % (0.63) %
Other 0.02 % 0.12 % 0.10 % 0.15 % 0.19 % - % 0.15 %
Total adjustments to arrive at cost of funds (5.37) % (3.60) % (2.86) % (20.21) % 0.84 % (5.55) % (7.50) %
Total cost of funds 1.88 % 2.37 % 2.45 % 2.73 % 2.67 % 1.85 % 2.62 %
Average net invested assets $ 192,231 $ 195,804 $ 201,600 $ 210,209 $ 207,312 $ 186,815 $ 206,241
24
Non-GAAP Reconciliations
Unaudited (in millions)
Quarterly Trends Year-to-Date
3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 2022 2023
RECONCILIATION OF POLICY AND OTHER OPERATING EXPENSES TO OTHER OPERATING EXPENSES
US GAAP policy and other operating expenses $ 388 $ 412 $ 435 $ 452 $ 472 $ 1,083 $ 1,359
Interest expense (68) (85) (115) (132) (113) (142) (360)
Policy acquisition expenses, net of deferrals (94) (103) (125) (129) (137) (282) (391)
Integration, restructuring and other non-operating expenses (37) (29) (29) (28) (41) (104) (98)
Stock compensation expenses (15) (16) (16) (13) (13) (40) (42)
ACRA noncontrolling interests (73) (48) (17) (31) (30) (183) (78)
Other 19 (3) (7) (1) (15) 6 (23)
Total adjustments to arrive at other operating expenses (268) (284) (309) (334) (349) (745) (992)
Other operating expenses $ 120 $ 128 $ 126 $ 118 $ 123 $ 338 $ 367
December 31, 2022 September 30, 2023
RECONCILIATION OF INVESTMENT FUNDS, INCLUDING RELATED PARTIES AND VIES, TO NET ALTERNATIVE INVESTMENTS
Investment funds, including related parties and VIEs $ 14,128 $ 16,818
Equity securities 509 472
Certain equity securities included in AFS or trading securities 225 197
Investment funds within funds withheld at interest 1,126 802
Royalties 15 14
Net assets of the VIE, excluding investment funds (2,041) (4,006)
Unrealized (gains) losses 44 73
ACRA noncontrolling interests (1,836) (2,391)
Other assets (91) (186)
Total adjustments to arrive at net alternative investments
 (2,049) (5,025)
Net alternative investments
 $ 12,079 $ 11,793
25
Non-GAAP Reconciliations
Unaudited (in millions)
Quarterly Trends
3Q'22 4Q'22 1Q'23 2Q'23 3Q'23
RECONCILIATION OF TOTAL INVESTMENTS, INCLUDING RELATED PARTIES, TO NET INVESTED ASSETS
Total investments, including related parties $ 185,376 $ 196,448 $ 203,230 $ 215,322 $ 214,953
Derivative assets (4,065) (3,309) (3,956) (5,114) (4,571)
Cash and cash equivalents (including restricted cash) 10,847 8,407 14,992 12,804 11,214
Accrued investment income 1,226 1,328 1,458 1,646 1,792
Net receivable (payable) for collateral on derivatives (1,940) (1,486) (1,909) (2,940) (2,485)
Reinsurance funds withheld and modified coinsurance 7,156 1,423 942 1,046 882
VIE assets, liabilities and noncontrolling interest 13,105 12,747 12,799 13,693 14,340
Unrealized (gains) losses 25,098 22,284 19,782 20,676 25,078
Ceded policy loans (180) (179) (175) (174) (174)
Net investment receivables (payables) (349) 186 39 (217) (375)
Allowance for credit losses 446 471 521 536 592
Other investments - (10) (50) (43) (37)
Total adjustments to arrive at gross invested assets
 51,344 41,862 44,443 41,913 46,256
Gross invested assets
 236,720 238,310 247,673 257,235 261,209
ACRA noncontrolling interests (41,563) (41,859) (40,924) (43,565) (53,114)
Net invested assets
 $ 195,157 $ 196,451 $ 206,749 $ 213,670 $ 208,095
RECONCILIATION OF TOTAL LIABILITIES TO NET RESERVE LIABILITIES
Total liabilities $ 227,917 $ 233,382 $ 244,604 $ 256,203 $ 255,734
Debt (3,271) (3,658) (3,650) (3,642) (3,634)
Derivative liabilities (2,222) (1,646) (1,518) (1,753) (1,892)
Payables for collateral on derivatives and securities to repurchase (4,149) (3,841) (7,331) (6,979) (4,786)
Other liabilities (2,824) (1,635) (1,381) (1,712) (2,324)
Liabilities of consolidated VIEs (1,401) (815) (847) (1,189) (1,255)
Reinsurance impacts (4,357) (9,176) (9,090) (9,115) (8,918)
Policy loans ceded (180) (179) (175) (174) (174)
Market risk benefit asset (511) (481) (440) (433) (431)
ACRA noncontrolling interests (35,463) (35,981) (35,281) (37,775) (46,576)
Total adjustments to arrive at net reserve liabilities
 (54,378) (57,412) (59,713) (62,772) (69,990)
Net reserve liabilities
 $ 173,539 $ 175,970 $ 184,891 $ 193,431 $ 185,744
26

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Athene Holding Ltd. published this content on 07 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 November 2023 22:05:20 UTC.

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