Athene Holding Ltd

Results of Operations

The following summarizes the condensed consolidated results of operations:

Three Months Ended September 30, 2024 Compared to the Three Months Ended September 30, 2023

In this section, references to 2024 refer to the three months ended September 30, 2024 and references to 2023 refer to the three months ended September 30, 2023.

Net Income Available to Athene Holding Ltd. Common Stockholder

Net income available to Athene Holding Ltd. common stockholder increased by $138 million, or 31%, to $580 million in 2024 from $442 million in 2023. The increase in net income available to Athene Holding Ltd. common stockholder was primarily driven by a $5.1 billion increase in revenues, partially offset by a $3.9 billion increase in benefits and expenses, a $1.0 billion increase in net income attributable to noncontrolling interests and a $29 million increase in income tax expense.

Revenues

Revenues increased by $5.1 billion to $6.5 billion in 2024 from $1.4 billion in 2023. The increase was primarily driven by an increase in investment related gains (losses), an increase in net investment income, an increase in premiums and an increase in VIE investment related gains (losses), partially offset by a decrease in other revenues.

Investment related gains (losses) increased by $4.2 billion to $1.5 billion in 2024 from $(2.6) billion in 2023, primarily due to the favorable change in fair value of mortgage loans, FIA hedging derivatives, reinsurance assets and trading securities, partially offset by unfavorable net foreign exchange impacts. The change in fair value of mortgage loans increased $1.7 billion, the change in fair value of reinsurance assets increased $1.5 billion and the change in fair value of trading securities increased$144 million, primarily driven by a decrease in US Treasury rates in 2024 compared to an increase in 2023. The change in fair value of FIA hedging derivatives increased $1.6 billion, primarily driven by favorable performance of the equity indices upon which our call options are based. The largest percentage of our call options are based on the S&P 500 index, which increased 5.5% in 2024, compared to a decrease of 3.6% in 2023. The unfavorable net foreign exchange impacts were primarily related to the weakening of the US dollar against foreign currencies in 2024 compared to 2023.

Net investment income increased by $849 million to $3.8 billionin 2024 from $2.9 billion in 2023, primarily driven by significant growth in our investment portfolio attributable to strong net flows during the previous twelve months and higher rates on new deployment in comparison to our existing portfolio related to the higher interest rate environment. These increases were partially offset by higher investment management fees driven by the significant growth in our investment portfolio.

Premiums increased by $363 million to $389 million in 2024 from$26 million in 2023, primarily driven by a$294 million increase in pension group annuity premiums compared to 2023, as well as an increase in life premiums attributable to a block reinsurance transaction completed in the fourth quarter of 2023.

VIE investment related gains (losses) increased by $219 million to $469 million in 2024 from$250 million in 2023, primarily driven by unrealized gains on assets held by AAA and a favorable change in the fair value of mortgage loans held in VIEs related to a decrease in US Treasury rates in 2024 compared to an increase in 2023.

Other revenues decreased by $560 million to $4 million in 2024 from$564 million in 2023, primarily driven by the $555 million gain on the settlement of the VIAC recapture agreement in 2023.

Benefits and Expenses

Benefits and expenses increased by $3.9 billion to $4.8 billion in 2024 from $943 million in 2023. The increase was primarily driven by an increase in interest sensitive contract benefits, an increase in market risk benefits remeasurement (gains) losses, an increase in future policy and other policy benefits, an increase in policy and other operating expenses and an increase in DAC, DSI and VOBA amortization. Our annual unlocking of assumptions resulted in an increase in total benefits and expenses of $31 million compared to a decrease of $22 million in 2023. The 2024 unlocking was driven by an increase of $62 million in market risk benefits, an increase of $21 million related to DAC, DSI and VOBA and an increase of $8 million in interest sensitive contract benefits, partially offset by a decrease of $60 million in future policy and other policy benefits, compared to a decrease of $94 million in interest sensitive contract benefits and a decrease of $45 million in future policy and other policy benefits, partially offset by an increase of $81 million in market risk benefits and an increase of $36 million related to DAC, DSI and VOBA in 2023.

Interest sensitive contract benefits increased by$2.3 billion to $2.6 billion in 2024 from $333 million in 2023, primarily driven by an increase in the change in our fixed indexed annuity reserves, significant growth in our deferred annuity and funding agreement blocks of business, higher rates on new deferred annuity and funding agreement issuances in comparison to our existing blocks of business and an unfavorable change in unlocking. The change in our fixed indexed annuity reserves includes the impact from changes in the fair value of FIA embedded derivatives. The increase in the change in fair value of FIA embedded derivatives of $1.5 billion was primarily due to the performance of the equity indices to which our FIA policies are linked. The largest percentage of our FIA policies are linked to the S&P 500 index, which increased 5.5% in 2024, compared to a decrease of 3.6% in 2023. The change in fair value of FIA embedded derivatives was also driven by the unfavorable change in discount rates used in our embedded derivative calculations as 2024 experienced a decrease in discount rates compared to an increase in 2023. These impacts were partially offset by the favorable impact of rates on policyholder projected benefits. The fair value of FIA embedded derivatives unlocking in 2024 was $67 million unfavorable primarily due to changes to projected interest crediting, while 2023 unlocking was $20 million favorable primarily due to changes to projected interest crediting, partially offset by an increase in lapse and risk margin assumptions. The negative VOBA unlocking related to our interest sensitive contract liabilities in 2024 was $59 million favorable mainly due to updated economics and an increase in lapse assumptions, while 2023 unlocking was $74 million favorable mainly due to an increase in lapse assumptions.

Market risk benefits remeasurement (gains) losses increased by $965 million to $524 million in 2024 from $(441) million in 2023. The losses in 2024 compared to gains in 2023 were primarily driven by an unfavorable change in the fair value of market risk benefits, partially offset bya favorable change in unlocking. The change in fair value of market risk benefits was$1.0 billion unfavorable compared to 2023 due to a decrease in the risk-free discount rate across the curve, which is used in the fair value measurement of the liability for market risk benefits. This impact was partially offset by a favorable change in fair value of market risk benefits of $69 million related to the favorable equity market performance compared to 2023. The market risk benefits unlocking in 2024 was $62 million unfavorable primarily due to an increase in the income rider utilization assumption increasing projected claims, partially offset by favorable changes in lapse and enhanced income utilization assumptions, while 2023 unlocking was $81 million unfavorable primarily due to an increase in the income rider utilization assumption increasing projected claims, partially offset by favorable changes in lapse and income rider restart assumptions.

Future policy and other policy benefits increased by$425 million to $793 million in 2024 from $368 million in 2023, primarily driven bya$294 million increase in pension group annuity obligations compared to 2023 and an increase in the change in the AmerUs Closed Block fair value liability, partially offset by a favorable change in unlocking. The change in the AmerUs Closed Block fair value liability was primarily due to a decrease in US Treasury rates in 2024 compared to an increase in 2023. Unlocking in 2024 was $60 million favorable consisting of $104 million of favorable future policy benefit reserve unlocking, partially offset by $44 million of unfavorable negative VOBA and deferred profit liability unlocking. The favorable unlocking primarily related to favorable projected mortality lowering future benefit payments, partially offset by an increase in the lump sum payment utilization assumption. Unlocking in 2023 was $45 million favorable consisting of $297 million of favorable future policy benefit reserve unlocking, partially offset by $252 million of unfavorable negative VOBA and deferred profit liability unlocking. The favorable unlocking primarily related to higher interest rates and favorable mortality experience lowering future benefit payments.

Policy and other operating expenses increased by $215 million to$687 million in 2024 from$472 million in 2023, primarily driven by the recognition of $172 million of expense related to estimated guaranty association assessments we expect to be levied against us in connection with the Bankers Life Insurance Company and Colorado Bankers Life Insurance Company insolvencies, as well as an increase in general operating expenses attributable to growth in the business.

DAC, DSI and VOBA amortization increased by $33 million to $244 million in 2024 from $211 million in 2023, primarily due to growth in our retail channel, partially offset by lower VOBA amortization and a favorable change in unlocking. Unlocking in 2024 was$21 million unfavorable mainly related to changes to projected interest crediting and an increase in lapse assumptions, while unlocking in 2023 was $36 million unfavorable mainly related to an increase in lapse assumptions and changes to projected interest crediting.

Income Tax Expense

Income tax expense increased by $29 million to$191 million in 2024 from $162 million in 2023, primarily driven the favorable changes in the fair value of mortgage loans and reinsurance assets as well as the increase in net investment income, partially offset by an increase in income attributable to the noncontrolling interests, additional policyholder and other reserve liability costs and the gain on the settlement of the VIAC recapture agreement in 2023. Our effective tax rate in thethird quarter of 2024 was 11% compared to 33% in 2023. The income tax expense was calculated by applying the 21% US statutory rate to the income of our US and foreign subsidiaries, net of noncontrolling interests.

Net Income (Loss) Attributable to Noncontrolling Interests

Net income (loss) attributable to noncontrolling interests increased by $1.0 billion to $859 million in 2024 from $(155) million in 2023, primarily due to the favorable change in fair value of reinsurance assets related to a decrease in US Treasury rates in 2024 compared to an increase in 2023, an increase in income attributable to the ACRA 2 noncontrolling interest related to the 10% increase in ADIP II’s ownership of ACRA 2 effective December 31, 2023, and a higher allocation of income to the AAA noncontrolling interest driven by the continued increase in the noncontrolling interest ownership of AAA.

Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023

In this section, references to 2024 refer to the nine months ended September 30, 2024 and references to 2023 refer to the nine months ended September 30, 2023.

Net Income Available to Athene Holding Ltd. Common Stockholder

Net income available to Athene Holding Ltd. common stockholder increased by $751 million, or 48%, to $2.3 billion in 2024 from $1.6 billion in 2023. The increase in net income available to Athene Holding Ltd. common stockholder was primarily driven by a $3.3 billion decrease in benefits and expenses, partially offset by a $1.3 billion decrease in revenues, a $1.0 billion increase in net income attributable to noncontrolling interests and a $201 million increase in income tax expense.

Revenues

Revenues decreased by $1.3 billion to $16.9 billion in 2024 from $18.2 billion in 2023. The decrease was primarily driven by a decrease in premiums and a decrease in other revenues, partially offset by an increase in investment related gains (losses), an increase in net investment income and an increase in VIE investment related gains (losses).

Premiums decreased by $8.0 billion to $1.2 billion in 2024 from $9.2 billion in 2023, primarily driven by an $8.2 billion decrease in pension group annuity premiums compared to 2023, partially offset by an increase in life premiums attributable to a block reinsurance transaction completed in the fourth quarter of 2023.

Other revenues decreased by $575 million to $9 million in 2024 from $584 million in 2023, primarily driven by the $555 million gain on the settlement of the VIAC recapture agreement in 2023.

Investment related gains (losses) increased by $4.3 billion to $3.1 billion in 2024 from $(1.2) billion in 2023, primarily due to the change in fair value of FIA hedging derivatives, mortgage loans, reinsurance assets and trading securities, as well asa favorable change in the provision for credit losses, partially offset by unfavorable net foreign exchange impacts. The change in fair value of FIA hedging derivatives increased $2.0 billion, primarily driven by the favorable performance of the equity indices upon which our call options are based. The largest percentage of our call options are based on the S&P 500 index, which increased 20.8% in 2024, compared to an increase of 11.7% in 2023. The change in fair value of mortgage loans increased $1.6 billion, the change in fair value of reinsurance assets increased $1.0 billion and the change in fair value of trading securities increased $79 million primarily driven by a decrease in US Treasury rates in 2024 compared to an increase in 2023. The favorable change in the provision for credit losses of $123 million was primarily driven by intent-to-sell impairments in 2023 related to the timing of the recapture of certain business by VIAC and impacts from the Silicon Valley Bank failure. The unfavorable net foreign exchange impacts were primarily related to the weakening of the US dollar against foreign currencies in 2024 compared to 2023.

Net investment income increased by $2.5 billion to $10.6 billionin 2024 from $8.1 billion in 2023, primarily driven by significant growth in our investment portfolio attributable to strong net flows during the previous twelve months, higher rates on new deployment in comparison to our existing portfolio related to the higher interest rate environment and higher floating rate income. These increases were partially offset by higher investment management fees driven by the significant growth in our investment portfolio.

VIE investment related gains (losses) increased by $365 million to $1.1 billion in 2024 from $744 million in 2023, primarily driven by unrealized gains on assets held by AAA and a favorable change in the fair value of mortgage loans held in VIEs related to a decrease in US Treasury rates in 2024 compared to an increase in 2023.

Benefits and Expenses

Benefits and expenses decreased by $3.3 billion to $12.4 billion in 2024 from $15.7 billion in 2023. The decrease was primarily driven by a decrease in future policy and other policy benefits, partially offset by an increase in interest sensitive contract benefits, an increase in market risk benefits remeasurement (gains) losses, an increase in policy and other operating expenses and an increase in DAC, DSI and VOBA amortization. Our annual unlocking of assumptions resulted in an increase in total benefits and expenses of $31 million compared to a decrease of $22 million in 2023. The 2024 unlocking was driven by an increase of $62 million in market risk benefits, an increase of $21 million related to DAC, DSI and VOBA and an increase of $8 million in interest sensitive contract benefits, partially offset by a decrease of $60 million in future policy and other policy benefits, compared to a decrease of $94 million in interest sensitive contract benefits and a decrease of $45 million in future policy and other policy benefits, partially offset by an increase of $81 million in market risk benefits and an increase of $36 million related to DAC, DSI and VOBA in 2023.

Future policy and other policy benefits decreased by $7.9 billion to $2.4 billion in 2024 from $10.3 billion in 2023, primarily driven by an $8.2 billion decrease in pension group annuity obligations compared to 2023 and a favorable change in unlocking, partially offset by a $211 million increase in accrued interest and an increase in the change in the AmerUs Closed Block fair value liability. The increase in accrued interest was primarily attributable to a larger outstanding balance in 2024 compared to 2023. The change in the AmerUs Closed Block fair value liability was primarily due to a decrease in US Treasury rates in 2024 compared to an increase in 2023. Unlocking in 2024 was $60 million favorable consisting of $104 million of favorable future policy benefit reserve unlocking, partially offset by $44 million of unfavorable negative VOBA and deferred profit liability unlocking. The favorable unlocking primarily related to favorable projected mortality lowering future benefit payments, partially offset by an increase in the lump sum payment utilization assumption. Unlocking in 2023 was $45 million favorable consisting of $297 million of favorable future policy benefit reserve unlocking, partially offset by $252 million of unfavorable negative VOBA and deferred profit liability unlocking. The favorable unlocking primarily related to higher interest rates and favorable mortality experience lowering future benefit payments.

Interest sensitive contract benefits increased by $3.7 billion to $7.3 billion in 2024 from $3.6 billion in 2023, primarily driven by an increase in the change in our fixed indexed annuity reserves, significant growth in our deferred annuity and funding agreement blocks of business, higher rates on new deferred annuity and funding agreement issuances in comparison to our existing blocks of business, increased costs on floating rate funding agreements and an unfavorable change in unlocking. The change in our fixed indexed annuity reserves includes the impact from changes in the fair value of FIA embedded derivatives. The increase in the change in fair value of FIA embedded derivatives of $993 million was primarily due to the performance of the equity indices to which our FIA policies are linked. The largest percentage of our FIA policies are linked to the S&P 500 index, which increased 20.8% in 2024, compared to an increase of 11.7% in 2023. The change in fair value of FIA embedded derivatives was also driven by the unfavorable change in discount rates used in our embedded derivative calculations as 2024 experienced a decrease in discount rates compared to an increase in 2023. These impacts were partially offset by the favorable impact of rates on policyholder projected benefits. The fair value of FIA embedded derivatives unlocking in 2024 was $67 million unfavorable primarily due to changes to projected interest crediting, while 2023 unlocking was $20 million favorable primarily due to changes to projected interest crediting, partially offset by an increase in lapse and risk margin assumptions. The negative VOBA unlocking related to our interest sensitive contract liabilities in 2024 was $59 million favorable mainly due to updated economics and an increase in lapse assumptions, while 2023 unlocking was $74 million favorable mainly due to an increase in lapse assumptions.

Market risk benefits remeasurement (gains) losses increased by $520 million to $354 million in 2024 from $(166) million in 2023. The losses in 2024 compared to gains in 2023 were primarily driven by an unfavorable change in the fair value of market risk benefits, partially offset by a favorable change in unlocking. The change in fair value of market risk benefits was $573 million unfavorable compared to 2023 due to a decrease in the risk-free discount rate across the curve, which is used in the fair value measurement of the liability for market risk benefits. This impact was partially offset by a favorable change in the fair value of market risk benefits of $89 million related to the favorable equity market performance compared to 2023. The market risk benefits unlocking in 2024 was $62 million unfavorable primarily due to an increase in the income rider utilization assumption increasing projected claims, partially offset by favorable changes in lapse and enhanced income utilization assumptions, while 2023 unlocking was $81 million unfavorable primarily due to an increase in the income rider utilization assumption increasing projected claims, partially offset by favorable changes in lapse and income rider restart assumptions.

Policy and other operating expenses increased by $294 million to $1.7 billion in 2024 from $1.4 billion in 2023, primarily driven by the recognition of $172 million of expense related to estimated guaranty association assessments we expect to be levied against us in connection with the Bankers Life Insurance Company and Colorado Bankers Life Insurance Company insolvencies, as well as an increase in general operating expenses attributable to growth in the business.

DAC, DSI and VOBA amortization increased by $176 million to $678 million in 2024 from $502 million in 2023, primarily due to growth in our retail channel, partially offset by a favorable change in unlocking. Unlocking in 2024 was$21 million unfavorable mainly related to changes to projected interest crediting and an increase in lapse assumptions, while unlocking in 2023 was $36 million unfavorable mainly related to an increase in lapse assumptions and changes to projected interest crediting.

Income Tax Expense

Income tax expense increased by $201 million to $659 million in 2024 from $458 million in 2023, primarily driven by the favorable change in fair value of reinsurance assets and mortgage loans as well as an increase in net investment income, partially offset by an increase in income attributable to the noncontrolling interests, additional policyholder and other reserve liability costs and the gain on the settlement of the VIAC recapture agreement in 2023. Our effective tax rate in 2024 was 15% compared to 18% in 2023. The income tax expense was calculated by applying the 21% US statutory rate to the income of our US and foreign subsidiaries, net of noncontrolling interests.

Net Income (Loss) Attributable to Noncontrolling Interests

Net income (loss) attributable to noncontrolling interests increased by $1.0 billion to $1.4 billion in 2024 from $354 million in 2023, primarily due to the favorable change in fair value of reinsurance assets related to a decrease in US Treasury rates in 2024 compared to an increase in 2023, an increase in income attributable to the ACRA 2 noncontrolling interest, which was established in the third quarter of 2023, with ADIP II increasing its ownership stake in ACRA 2 to 60% effective December 31, 2023, and a higher allocation of income to the AAA noncontrolling interest driven by the continued increase in the noncontrolling interest ownership of AAA.

Summary of Non-GAAP Earnings

The following summarizes our spread related earnings:

Three Months Ended September 30, 2024 Compared to the Three Months Ended September 30, 2023

In this section, references to 2024 refer to the three months ended September 30, 2024 and references to 2023 refer to the three months ended September 30, 2023.

Spread Related Earnings

SRE decreased by $17 million, or 2%, to $855 million in 2024 from $872 million in 2023. The decrease in SRE was primarily driven by higher cost of funds and interest and other financing costs, partially offset by higher net investment earnings and strategic capital management fees.

Cost of funds increased $599 million, primarily driven by growth in and higher rates on new deferred annuity issuances, growth in and higher rates on new institutional business, including the additional costs of swapping to or issuing funding agreements as floating rate to mitigate SRE sensitivity to floating rate assets, an increase in business mix to institutional business at higher crediting rates and the $114 million operating gain on the settlement of the VIAC recapture agreement in 2023. These impacts were partially offset by a favorable change in unlocking as well as a favorable impact to pension group annuity balances related to a refinement in methodology. Unlocking, net of the noncontrolling interests, was favorable $16 million primarily related to favorable projected mortality lowering future benefit payments, updated economics and favorable changes in lapse and enhanced income utilization assumptions. These impacts were largely offset by an increase in the income rider utilization assumption increasing projected claims, an increase in the lump sum payment utilization assumption and changes to projected interest crediting. Unlocking, net of the noncontrolling interests, in 2023 was unfavorable $24 million primarily related to an increase in the income rider utilization assumption increasing projected claims. This impact was partially offset by favorable changes in lapse and income rider restart assumptions, as well as higher interest rates and favorable mortality experience lowering future benefit payments.

Interest and other financing costs increased $12 million related to interest expense on our debt issuances in the fourth quarter of 2023 and the first quarter of 2024, partially offset by lower interest expense resulting from a decrease in short-term repurchase agreements outstanding in 2024 compared to 2023.

Net investment earnings increased $577 million, primarily driven by $30.5 billion of growth in our average net invested assets, higher rates on new deployment compared to our existing portfolio related to the higher interest rate environment and an increase in alternative net investment income. The increase in alternative net investment income compared to 2023 was primarily driven by favorable performance within strategic origination platforms and credit, largely offset by less favorable performance within equity and retirement services platforms. The increase in income from strategic origination platforms was mainly attributable to a Wheels valuation increase in 2024, unfavorable performance from Aqua Finance, Inc. (Aqua Finance) in 2023 related to macroeconomic headwinds for consumer loan origination and favorable performance from other strategic origination platforms related to the funding of recent investments. The decrease in income from equity was largely driven by underperformance within private equity and real assets compared to 2023, while the decrease in income from retirement services platforms was primarily related to continued inflationary and regulatory pressures impacting the valuation of Athora.

Strategic capital management fees increased $8 million due to additional fees received from ADIP II related to new business ceded to ACRA 2 over the previous twelve months as well as the 10% increase in ADIP II’s ownership of ACRA 2 effective December 31, 2023.

Net investment spread decreased 30 basis points to 1.83% in 2024 from 2.13% in 2023, primarily driven by higher cost of funds, partially offset by a higher net investment earned rate.

Cost of funds increased 67 basis points to 3.34% in 2024 from 2.67% in 2023, primarily driven by higher rates on new deferred annuity issuances, higher rates on new institutional business, including the additional costs of swapping to or issuing funding agreements as floating rate to mitigate SRE sensitivity to floating rate assets, an increase in business mix to institutional business at higher crediting rates and the $114 million operating gain on the settlement of the VIAC recapture agreement in 2023. These impacts were partially offset by a favorable change in unlocking, as well as a favorable impact to pension group annuity balances related to a refinement in methodology.

Net investment earned rate increased 36 basis points to 5.12% in 2024 from 4.76% in 2023, primarily due to higher returns in both our fixed income and alternative investment portfolios. Fixed income and other net investment earned rate was 4.96% in 2024, an increase from 4.58% in 2023, primarily driven byhigher rates on new deployment compared to our existing portfolio related to the higher interest rate environment. Alternative net investment earned rate was 8.19% in 2024, an increase from 7.75% in 2023, primarily driven byfavorable performance within strategic origination platforms and credit, largely offset by less favorable performance within equity and retirement services platforms. The higher return on strategic origination platforms was mainly attributable to a Wheels valuation increase in 2024, unfavorable performance from Aqua Finance in 2023 related to macroeconomic headwinds for consumer loan origination and favorable performance from other strategic origination platforms related to the funding of recent investments. The lower return on equity was largely driven by underperformance within private equity and real assets compared to 2023, while the lower return on retirement services platforms was primarily related to continued inflationary and regulatory pressures impacting the valuation of Athora.

Adjustments to Net Income Available to Athene Holding Ltd. Common Stockholder

The adjustments tonet income available to Athene Holding Ltd. common stockholder are comprised of investment gains (losses), net of offsets; non-operating change in insurance liabilities and related derivatives; inte gration, restructuring and other non-operating expenses; stock compensation expense and the non-operating income tax expense (benefit) related to these adjustments. The increase in adjustments tonet income available to Athene Holding Ltd. common stockholder in 2024 compared to 2023 was primarily driven by an increase in investment gains (losses), net of offsets, partially offset by a decrease in non-operating change in insurance liabilities and related derivatives and anincrease in integration, restructuring and other non-operating expenses. Our annual unlocking of assumptions, net of the noncontrolling interests, resulted ina decrease in our adjustments to net income (loss) available to AHL common stockholder of $11 million compared to an increase of $71 million in 2023. The 2024 unlocking was driven by $26 million unfavorable FIA embedded derivative unlocking, partially offset by $14 million favorable market risk benefits unlocking and $1 million favorable liability for future policy benefits unlocking, compared to $71 million favorable FIA embedded derivative unlocking in 2023.

Investment gains (losses), net of offsets, increased $1.3 billion, primarily due to the favorable changes in fair value of mortgage loans, reinsurance assets and trading securities, partially offset by the $441 million non-operating gain on the settlement of the VIAC recapture agreement in 2023, unfavorable net foreign exchange impacts and higher realized losses related to the sale of mortgage loans and corporate securities. The favorable changes in fair value of mortgage loans of $1.5 billion, reinsurance assets of $828 million and trading securities were primarily driven by a decrease in US Treasury rates in 2024 compared to an increase in 2023. The unfavorable net foreign exchange impacts were primarily related to the weakening of the US dollar against foreign currencies in comparison to 2023.

Non-operating change in insurance liabilities and related derivatives decreased $944 million, primarily due to the unfavorable change in fair value of market risk benefits and a decrease in net FIA derivatives. The $929 million unfavorable change in fair value of market risk benefits was primarily driven by a decrease in the risk-free discount rate across the curve, which is used in the fair value measurement of the liability for market risk benefits, partially offset by favorable equity market performance compared to 2023 and a favorable change in unlocking. The fair value of market risk benefits unlocking, net of the noncontrolling interests, in 2024 was $14 million favorable primarily due to updated economics, while 2023 unlocking resulted in no market risk benefit impacts. The $55 million unfavorable change in net FIA derivatives was primarily driven by the change in discount rates used in our embedded derivative calculations as 2024 experienced a decrease in discount rates compared to an increase in 2023, and an unfavorable change in unlocking, largely offset bythe performance of the equity indices to which our FIA policies are linked and the favorable impact of rates on policyholder projected benefits. The largest percentage of our FIA policies are linked to the S&P 500 index, which increased 5.5% in 2024, compared to a decrease of 3.6% in 2023. The fair value of FIA embedded derivative unlocking, net of the noncontrolling interests, in 2024 was $26 million unfavorable primarily due to changes to projected interest crediting, while 2023 unlocking was $71 million favorable primarily due to changes to projected interest crediting, partially offset by an increase in lapse and risk margin assumptions.

Integration, restructuring and other non-operating expenses increased $163 million, primarily due to the recognition of $172 million of expense related to estimated guaranty association assessments we expect to be levied against us in connection with the Bankers Life Insurance Company and Colorado Bankers Life Insurance Company insolvencies.

Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023

In this section, references to 2024 refer to the nine months ended September 30, 2024 and references to 2023 refer to the nine months ended September 30, 2023.

Spread Related Earnings

SRE increased by $25 million, or 1%, to $2.4 billion in 2024 from $2.4 billion in 2023. The increase in SRE was primarily driven by higher net investment earnings, higher strategic capital management fees and lower interest and other financing costs, partially offset by higher cost of funds.

Net investment earnings increased $1.5 billion, primarily driven by $23.9 billion of growth in our average net invested assets, higher rates on new deployment compared to our existing portfolio related to the higher interest rate environment and higher floating rate income, partially offset by an increase in income attributable to the ACRA noncontrolling interests following the sale of a 50% interest in ACRA 2 to ADIP II effective July 1, 2023 and the subsequent increase in the ADIP II ownership of ACRA 2 to 60% effective December 31, 2023, as well as slightly lower alternative net investment income. The decrease in alternative net investment income compared to 2023 was primarily driven by less favorable performance within retirement services platforms and equity, largely offset by favorable performance within strategic origination platforms and credit. The decrease in income from retirement services platforms was primarily related to continued inflationary and regulatory pressures impacting the valuation of Athora, while the decrease in income from equity was largely driven by underperformance within private equity compared to 2023. The increase in income from strategic origination platforms was mainly attributable to a Wheels valuation increase in 2024, as well as unfavorable performance from Aqua Finance in 2023 related to macroeconomic headwinds for consumer loan origination, partially offset by outsized performance from MidCap Financial in 2023.

Strategic capital management fees increased $27 million due to additional fees received from ADIP II as a result of the sale of a 50% interest in ACRA 2 to ADIP II effective July 1, 2023 and the subsequent increase in the ADIP II ownership of ACRA 2 to 60% effective December 31, 2023, as well as new business ceded to ACRA 2 over the previous twelve months.

Interest and other financing costs decreased $16 million related to lower interest expense resulting from a decrease in short-term repurchase agreements outstanding in 2024 compared to 2023, partially offset by interest expense related to our debt issuances in the fourth quarter of 2023 and the first quarter of 2024.

Cost of funds increased $1.5 billion, primarily driven by growth in and higher rates on new deferred annuity issuances, growth in and higher rates on new institutional business, including the additional costs of swapping to or issuing funding agreements as floating rate to mitigate SRE sensitivity to floating rate assets, an increase in business mix to institutional business at higher crediting rates and the $114 million operating gain on the settlement of the VIAC recapture agreement in 2023. These impacts were partially offset by an increase in costs attributable to the ACRA noncontrolling interests following the sale of a 50% interest in ACRA 2 to ADIP II effective July 1, 2023 and the subsequent increase in the ADIP II ownership of ACRA 2 to 60% effective December 31, 2023, as well as a favorable change in unlocking and a favorable impact to pension group annuity balances related to a refinement in methodology. Unlocking, net of the noncontrolling interests, was favorable $16 million primarily related to favorable projected mortality lowering future benefit payments, updated economics and favorable changes in lapse and enhanced income utilization assumptions. These impacts were largely offset by an increase in the income rider utilization assumption increasing projected claims, an increase in the lump sum payment utilization assumption and changes to projected interest crediting. Unlocking, net of the noncontrolling interests, in 2023 was unfavorable $24 million primarily related to an increase in the income rider utilization assumption increasing projected claims. This impact was partially offset by favorable changes in lapse and income rider restart assumptions, as well as higher interest rates and favorable mortality experience lowering future benefit payments.

Net investment spread decreased 22 basis points to 1.76% in 2024 from 1.98% in 2023, primarily driven by higher cost of funds, partially offset by a higher net investment earned rate.

Cost of funds increased by 62 basis points to 3.24% in 2024, from 2.62% in 2023, primarily driven by higher rates on new deferred annuity issuances, higher rates on new institutional business, including the additional costs of swapping to or issuing funding agreements as floating rate to mitigate SRE sensitivity to floating rate assets, an increase in business mix to institutional business at higher crediting rates and the $114 million operating gain on the settlement of the VIAC recapture agreement in 2023. These impacts were partially offset by an increase in costs attributable to the ACRA noncontrolling interests following the sale of a 50% interest in ACRA 2 to ADIP II effective July 1, 2023 and the subsequent increase in the ADIP II ownership of ACRA 2 to 60% effective December 31, 2023, as well as a favorable change in unlocking and a favorable impact to pension group annuity balances related to a refinement in methodology.

Net investment earned rate increased 39 basis points to 4.96% in 2024 from 4.57% in 2023, primarily due to higher returns in our fixed income portfolio and slightly favorable performance within our alternative investment portfolio, partially offset by an increase in income attributable to the ACRA noncontrolling interests following the sale of a 50% interest in ACRA 2 to ADIP II effective July 1, 2023 and the subsequent increase in the ADIP II ownership of ACRA 2 to 60% effective December 31, 2023. Fixed income and other net investment earned rate was 4.82% in 2024, an increase from 4.40% in 2023, primarily driven byhigher rates on new deployment compared to our existing portfolio related to the higher interest rate environment and higher floating rate income. Alternative net investment earned rate was 7.69% in 2024, an increase from 7.46% in 2023, as slightly lower income was earned on average alternative net invested assets that decreased$432 million compared to 2023. The slightly lower alternative net investment income compared to 2023 was primarily driven by less favorable performance within retirement services platforms and equity, largely offset by favorable performance within strategic origination platforms and credit. The lower return on retirement services platforms was primarily related to continued inflationary and regulatory pressures impacting the valuation of Athora, while the lower return on equity was largely driven by underperformance within private equity compared to 2023. The higher return on strategic origination platforms was mainly attributable to a Wheels valuation increase in 2024, as well as unfavorable performance from Aqua Finance in 2023 related to macroeconomic headwinds for consumer loan origination, partially offset by outsized performance from MidCap Financial in 2023.

Adjustments to Net Income Available to Athene Holding Ltd. Common Stockholder

The increase in adjustments tonet income available to Athene Holding Ltd. common stockholder in 2024 compared to 2023 was primarily driven by anincrease in investment gains (losses), net of offsets, partially offset by adecrease in non-operating change in insurance liabilities and related derivatives and anincrease in integration, restructuring and other non-operating expenses. Our annual unlocking of assumptions, net of the noncontrolling interests, resulted ina decrease in our adjustments to net income (loss) available to AHL common stockholder of $11 million compared to an increase of $71 million in 2023. The 2024 unlocking was driven by $26 million unfavorable FIA embedded derivative unlocking, partially offset by $14 million favorable market risk benefits unlocking and $1 million favorable liability for future policy benefits unlocking, compared to $71 million favorable FIA embedded derivative unlocking in 2023.

Investment gains (losses), net of offsets, increased $1.3 billion, primarily due to thefavorable changes in fair value of mortgage loans, reinsurance assets and trading securities as well as a favorable change in the provision for credit losses, partially offset by the $441 million non-operating gain on the settlement of the VIAC recapture agreement in 2023, unfavorable net foreign exchange impacts and higher realized losses related to the sale of mortgage loans and corporate securities. The favorable changes in fair value of mortgage loans of $1.4 billion, reinsurance assets of $557 million and trading securities were primarily due to a decrease in US Treasury rates in 2024 compared to an increase in 2023. The favorable change in the provision for credit losses of $135 million was primarily driven by intent-to-sell impairments in 2023 related to the timing of the recapture of certain business by VIAC and impacts from the Silicon Valley Bank failure. The unfavorable net foreign exchange impacts were primarily related to the weakening of the US dollar against foreign currencies in comparison to 2023.

Non-operating change in insurance liabilities and related derivatives decreased $237 million, primarily due to the unfavorable change in fair value of market risk benefits, partially offset by the increase in net FIA derivatives. The $523 million unfavorable change in fair value of market risk benefits was primarily driven by a decrease in the risk-free discount rate across the curve, which is used in the fair value measurement of the liability for market risk benefits, partially offset by favorable equity market performance compared to 2023 and a favorable change in unlocking. The fair value of market risk benefits unlocking, net of the noncontrolling interests, in 2024 was $14 million favorable primarily due to updated economics, while 2023 unlocking resulted in no market risk benefit impacts. The $206 million favorable change in net FIA derivatives was primarily driven by the performance of the equity indices to which our FIA policies are linked. The largest percentage of our FIA policies are linked to the S&P 500 index, which increased 20.8% in 2024, compared to an increase of 11.7% in 2023. The change in net FIA derivatives was also driven by the favorable impact of rates on policyholder projected benefits, partially offset by the unfavorable change in discount rates used in our embedded derivative calculations as 2024 experienced a decrease in discount rates compared to an increase in 2023, and unfavorable unlocking. The fair value of FIA embedded derivative unlocking, net of the noncontrolling interests, in 2024 was $26 million unfavorable primarily due to changes to projected interest crediting, while 2023 unlocking was $71 million favorable primarily due to changes to projected interest crediting, partially offset by an increase in lapse and risk margin assumptions.

Integration, restructuring and other non-operating expenses increased $167 million, primarily due to the recognition of $172 million of expense related to estimated guaranty association assessments we expect to be levied against us in connection with the Bankers Life Insurance Company and Colorado Bankers Life Insurance Company insolvencies.