Athene Holding Ltd.

Previous wording

We have established a significant base of earnings and, as of March 31, 2025, have an expected annual net investment spread, which measures our investment performance plus strategic capital management fees less the total cost of our liabilities, of 1–2% over the estimated 7.6 year weighted-average life of our net reserve liabilities. The weighted-average life includes deferred annuities, pension group annuities, funding agreements, payout annuities, life insurance contracts and other products.

Current wording

We have established a significant base of earnings and, as of June 30, 2025, have an expected annual net investment spread, which measures our investment performance plus strategic capital management fees less the total cost of our liabilities, of 1–2% over the estimated 7.4 year weighted-average life of our net reserve liabilities. The weighted-average life includes deferred annuities, pension group annuities, funding agreements, payout annuities, life insurance contracts and other products.

Previous wording

Our total assets have grown to $381.5 billion as of March 31, 2025. For the three months ended March 31, 2025, we generated an annualized net investment spread of 1.65%.

Current wording

Our total assets have grown to $405.3 billion as of June 30, 2025. For the six months ended June 30, 2025, we generated an annualized net investment spread of 1.62%.

Previous wording

Our organic channels, including retail, flow reinsurance and institutional products, provided gross inflows of $25.6 billion and $20.1 billion for the three months ended March 31, 2025 and 2024, respectively, which were underwritten to attractive returns. Gross organic inflows increased $5.5 billion, or 27% from the prior year, reflecting the strength of our multi-channel distribution platform and our ability to quickly pivot into optimal and profitable channels as opportunities arise. Withdrawals on our deferred annuities, death benefits, pension group annuity benefit payments, payments on payout annuities, payments related to interest, maturities and repurchases of funding agreements and block reinsurance outflows (collectively, gross outflows), in the aggregate were $8.4 billion and $8.0 billion for the three months ended March 31, 2025 and 2024, respectively. The increase in gross outflows of $357 million was primarily driven by an increase in funding agreement maturities in 2025, partially offset by a decrease in outflows related to policies underlying certain reinsurance blocks compared to 2024. We believe that our credit profile, current product offerings and product design capabilities, as well as our growing reputation as both a seasoned funding agreement issuer and a reliable pension group annuity counterparty, will continue to enable us to grow our existing organic channels and source additional volumes of profitably underwritten liabilities in various market environments. We intend to continue to grow organically by expanding each of our retail, flow reinsurance and institutional distribution channels. We believe that we have the right people, infrastructure, scale and capital discipline to position us for continued growth.

Current wording

Our organic channels, including retail, flow reinsurance, institutional and other products, provided gross inflows of $46.8 billion and $36.8 billion for the six months ended June 30, 2025 and 2024, respectively, which were underwritten to attractive returns. Gross organic inflows increased $10.0 billion, or 27% from the prior year, reflecting the strength of our multi-channel distribution platform and our ability to quickly pivot into optimal and profitable channels as opportunities arise. Withdrawals on our deferred annuities, death benefits, pension group annuity benefit payments, payments on payout annuities, payments related to interest, maturities and repurchases of funding agreements and block reinsurance outflows (collectively, gross outflows), in the aggregate were $15.6 billion and $18.2 billion for the six months ended June 30, 2025 and 2024, respectively. The decrease in gross outflows of $2.6 billion was primarily driven by a decrease in funding agreement maturities in 2025 and a decrease in outflows related to policies underlying certain reinsurance blocks compared to 2024, partially offset by an increase in retail annuity policies which have reached the end of the surrender charge period in a higher rate environment. We believe that our credit profile, current product offerings and product design capabilities, as well as our reputation as both a seasoned funding agreement issuer and a reliable pension group annuity counterparty, will continue to enable us to grow our existing organic channels and source additional volumes of profitably underwritten liabilities in various market environments. We intend to continue to grow organically by expanding each of our retail, flow reinsurance, institutional and other distribution channels. We believe that we have the right people, infrastructure, scale and capital discipline to position us for continued growth.

Previous wording

Within our retail channel, we had fixed annuity sales of $9.5 billion and $9.7 billion for the three months ended March 31, 2025 and 2024, respectively. The decrease in our retail channel was driven by a decrease in sales of our fixed indexed annuity (FIA) products in comparison to a record quarter in 2024, largely offset by an increase in multi-year guaranteed annuity (MYGA) sales and record sales of our registered index-linked annuity (RILA) products. Overall sales were strong across our bank, broker-dealer and independent marketing organization (IMO) channels, exhibiting strong sales execution, the current rate environment, growing product offerings and our continued expansion into large financial institutions. We have maintained our disciplined approach to pricing and our targeted underwritten returns. We aim to continue to grow our retail channel by deepening our relationships with our approximately 40 IMOs and with our network of 17 banks and 156 broker-dealers, collectively representing approximately 144,000 independent agents. Our strong financial position and diverse, capital-efficient products allow us to be dependable partners with IMOs, banks and broker-dealers as well as to consistently write new business. We expect our retail channel to continue to benefit from our credit profile, product launches and continuous product enhancements as we look to capture new potential distribution opportunities. We believe this can support sales growth at our targeted returns from increased volumes via existing IMO relationships and allow continued expansion of our bank and broker-dealer channels.

Current wording

Within our retail channel, we had fixed annuity sales of $16.7 billion and $18.6 billion for the six months ended June 30, 2025 and 2024, respectively. The decrease in our retail channel was primarily driven by a decrease in the sales of our multi-year guaranteed annuity (MYGA) products. Overall sales were strong across our bank, broker-dealer and independent marketing organization (IMO) channels, exhibiting strong sales execution, the current rate environment, growing product offerings and our continued expansion into large financial institutions. We have maintained our disciplined approach to pricing and our targeted underwritten returns. We aim to continue to grow our retail channel by deepening our relationships with our approximately 41 IMOs and with our network of 17 banks and 158 broker-dealers, collectively representing approximately 146,000 independent agents. Our strong financial position and diverse, capital-efficient products allow us to be dependable partners with IMOs, banks and broker-dealers, as well as to consistently write new business. We expect our retail channel to continue to benefit from our credit profile, product launches and continuous product enhancements as we look to capture new potential distribution opportunities. We believe this can support sales growth at our targeted returns from increased volumes via existing IMO relationships and allow continued expansion of our bank and broker-dealer channels.

Previous wording

Within our flow reinsurance channel, we target reinsurance business consistent with our preferred liability characteristics, which provides us another opportunistic channel to source liabilities with attractive crediting rates. We generated inflows through our flow reinsurance channel of $4.9 billion and $2.4 billion for the three months ended March 31, 2025 and 2024, respectively. The increase in our flow reinsurance channel from 2024 was driven by record volumes primarily attributable to a strategic opportunity with a US partner at attractive returns as well as strong volume from our Asia Pacific partners. We continue to expand our presence in Asia with increased partnerships and growing product offerings. We expect that our credit profile and our reputation as a solutions provider will help us continue to source additional reinsurance partners, which will further diversify our flow reinsurance channel.

Current wording

Within our flow reinsurance channel, we target reinsurance business consistent with our preferred liability characteristics, which provides us another channel to source liabilities with attractive crediting rates. We generated inflows through our flow reinsurance channel of $7.0 billion and $3.6 billion for the six months ended June 30, 2025 and 2024, respectively. The increase in our flow reinsurance channel from 2024 was driven by record volumes primarily attributable to a strategic opportunity with a US partner at attractive returns, as well as strong volume from our Asia Pacific partners. We continue to expand our presence in Asia with increased partnerships and growing product offerings. We expect that our credit profile and our reputation as a solutions provider will help us continue to source additional reinsurance partners, which will further diversify our flow reinsurance channel.

Previous wording

Within our institutional channel, we generated inflows of $11.1 billion and $8.0 billion for the three months ended March 31, 2025 and 2024, respectively. The increase in our institutional channel was driven by higher funding agreement inflows. We issued funding agreements in the aggregate principal amount of $11.1 billion and $8.0 billion for the three months ended March 31, 2025 and 2024, respectively. The increase in our funding agreement channel from 2024 was driven by record inflows with diversified activity across sub-channels, including record quarterly FABN issuance. Funding agreement inflows for the three months ended March 31, 2025 consisted of $5.8 billion of FABN issuances, $3.1 billion of secured and other funding agreement issuances, $1.8 billion of FHLB issuances and $400 million long-term repurchase agreement issuances. As of March 31, 2025, we had funding agreements outstanding of $28.3 billion under our FABN program, $18.0 billion of secured and other funding agreements, $17.2 billion with the FHLB and $3.1 billion of long-term repurchase agreements. We issued no pension group annuity contracts during the three months ended March 31, 2025 and 2024. The pension group annuity channel continues to be impacted by the competitive environment and litigation against certain of our pension group annuity clients. Since entering the pension group annuity market in 2017, we have closed 49 deals resulting in the issuance or reinsurance of group annuities of $52.7 billion with more than 545,000 plan participants as of March 31, 2025. We expect to grow our institutional channel by continuing to engage in pension group annuity transactions and programmatic issuances of funding agreements.

Current wording

Within our institutional channel, we generated inflows of $22.9 billion and $14.6 billion for the six months ended June 30, 2025 and 2024, respectively. The increase in our institutional channel was driven by higher funding agreement inflows, partially offset by lower pension group annuity inflows. We issued funding agreements in the aggregate principal amount of $22.9 billion and $14.0 billion for the six months ended June 30, 2025 and 2024, respectively. The increase in our funding agreement channel from 2024 was driven by record inflows with diversified activity across sub-channels. Funding agreement inflows for the six months ended June 30, 2025 consisted of $7.6 billion of FABN issuances, $6.0 billion of FABR issuances, $2.4 billion of direct funding agreements, $5.7 billion of FHLB issuances and $1.2 billion of long-term repurchase agreement issuances. As of June 30, 2025, we had funding agreements outstanding of $30.4 billion under our FABN program, $18.0 billion under our FABR program, $5.2 billion of direct funding agreements, $21.0 billion with the FHLB and $2.7 billion of long-term repurchase agreements. We issued group annuity contracts in the aggregate principal amount of $5 million and $577 million during the six months ended June 30, 2025 and 2024. The pension group annuity channel continues to be impacted by the competitive environment and litigation against certain of our pension group annuity clients. Since entering the pension group annuity market in 2017, we have closed 49 deals resulting in the issuance or reinsurance of group annuities of $52.7 billion with more than 535,000 plan participants as of June 30, 2025. We expect to grow our institutional channel by continuing to engage in pension group annuity transactions and programmatic issuances of funding agreements.

Previous wording

To support growth strategies and capital deployment opportunities, we established ACRA 1 as a long-duration, on-demand capital vehicle. ALRe directly owns 37% of the economic interests in ACRA 1 and all of ACRA 1’s voting interests, with ADIP I, a series of funds managed by Apollo, owning the remaining 63% of the economic interests. During the commitment period, ACRA 1 participated in certain transactions by drawing a portion of the required capital for such transactions from third-party investors equal to ADIP I’s proportionate economic interests in ACRA 1. The commitment period for ACRA 1 expired in August 2023.

Current wording

Apollo, owning the remaining 63% of the economic interests. During the commitment period, ACRA 1 participated in certain transactions by drawing a portion of the required capital for such transactions from third-party investors equal to ADIP I’s proportionate economic interests in ACRA 1. The commitment period for ACRA 1 expired in August 2023.

Previous wording

Executing our growth strategy requires that we have sufficient capital available to deploy. We believe that we have significant capital available to support our growth aspirations. As of March 31, 2025, we estimate that we had approximately $8.2 billion in capital available to deploy, consisting of approximately $1.6 billion in excess equity capital, $3.2 billion in untapped leverage capacity (assuming an adjusted leverage ratio of not more than 30%, subject to maintaining a sufficient level of capital required to maintain our desired financial strength ratings from rating agencies), and $3.4 billion in available undrawn capital at ACRA.

Current wording

Executing our growth strategy requires that we have sufficient capital available to deploy. We believe that we have significant capital available to support our growth aspirations. As of June 30, 2025, we estimate that we had approximately $8.7 billion in capital available to deploy, consisting of approximately $3.1 billion in excess equity capital, $2.4 billion in untapped leverage capacity (assuming an adjusted leverage ratio of not more than 30%, subject to maintaining a sufficient level of capital required to maintain our desired financial strength ratings from rating agencies), and $3.2 billion in available undrawn capital at ACRA.

Previous wording

The ongoing uncertainty regarding trade policy poses a significant downside risk to the current economic outlook. Tariffs, which are inflationary in nature, remain in place and may have a negative impact on Gross Domestic Product (GDP) growth. The potential impact of tariffs on corporate earnings remains uncertain and will depend on the duration and outcome of related trade negotiations.

Current wording

The ongoing uncertainty regarding trade policy poses a downside risk to the current economic outlook, with lower growth and higher inflationary pressures increasing the risk of a stagflationary environment. Tariffs, which are inflationary in nature, remain in place and may have a negative impact on Gross Domestic Product (GDP) growth. The potential impact of tariffs on corporate earnings remains uncertain and will depend on the duration and outcome of related trade negotiations.

Previous wording

We carefully monitor economic and market conditions that could potentially give rise to global market volatility and affect our business operations, investment portfolios and derivatives, which include global inflation. US inflation remains elevated with the US Bureau of Labor Statistics reporting the annual US inflation rate at 2.4% as of March 31, 2025, compared to 2.9% as of December 31, 2024. The US Federal Reserve finished the quarter with a benchmark interest rate target range of 4.25% to 4.50%, unchanged from its December 2024 meeting.

Current wording

We carefully monitor economic and market conditions that could potentially give rise to global market volatility and affect our business operations, investment portfolios and derivatives, which include global inflation. US inflation remains elevated with the US Bureau of Labor Statistics reporting the annual US inflation rate at 2.7% as of June 30, 2025, compared to 2.4% as of March 31, 2025. The US Federal Reserve finished the quarter with a benchmark interest rate target range of 4.25% to 4.50%, unchanged from its December 2024 meeting.

Previous wording

Equity market performance was mixed during the first quarter of 2025. In the US, the S&P 500 Index decreased by 4.6% during the quarter, following an increase of 2.1% in the fourth quarter of 2024. In terms of economic conditions in the US, the Bureau of Economic Analysis reported real GDP contracted at an annual rate of 0.3% in the first quarter of 2025, following an increase of 2.4% in the fourth quarter of 2024. As of April 2025, the International Monetary Fund estimated that the US economy will expand by 1.8% in 2025 and 1.7% in 2026. The US Bureau of Labor Statistics reported the US unemployment rate increased to 4.2% as of March 31, 2025, compared to 4.1% as of December 31, 2024. Oil finished the first quarter of 2025 relatively flat, decreasing only 0.3% from the fourth quarter of 2024.

Current wording

Equity market performance was strong during the second quarter of 2025. In the US, the S&P 500 Index increased by 10.6% during the second quarter, following a decrease of 4.6% in the first quarter of 2025. In terms of economic conditions in the US, the Bureau of Economic Analysis reported real GDP increased at an annual rate of 3.0% in the second quarter of 2025, following a contraction of 0.5% in the first quarter of 2025. As of July 2025, the International Monetary Fund estimated the US economy will expand by 1.9% in 2025 and 2.0% in 2026. The US Bureau of Labor Statistics reported the US unemployment rate decreased to 4.1% as of June 30, 2025, compared to 4.2% as of March 31, 2025. Oil finished the second quarter of 2025 down 8.9% from the first quarter of 2025.

Previous wording

Foreign exchange rates can materially impact the valuations of our investments and liabilities that are denominated in currencies other than the US dollar. The US dollar weakened in the first quarter of 2025 compared to the euro and Japanese yen. Relative to the US dollar, the euro appreciated 4.5% in the first quarter of 2025, after depreciating 7.0% in the fourth quarter of 2024. Relative to the US dollar, the Japanese yen appreciated 4.8% in the first quarter of 2025, after depreciating 8.6% in the fourth quarter of 2024. We generally undertake hedging activities to eliminate or mitigate foreign exchange currency risk.

Current wording

Foreign exchange rates can materially impact the valuations of our investments and liabilities that are denominated in currencies other than the US dollar. The US dollar weakened in the second quarter of 2025 compared to the euro and Japanese yen. Relative to the US dollar, the euro appreciated 9.0% in the second quarter of 2025, after appreciating 4.5% in the first quarter of 2025. Relative to the US dollar, the Japanese yen appreciated 4.1% in the second quarter of 2025, after appreciating 4.8% in the first quarter of 2025. We generally undertake hedging activities to eliminate or mitigate foreign exchange currency risk.

Previous wording

Medium and long-term rates decreased during the first quarter of 2025 with the US 10-year Treasury yield at 4.23% as of March 31, 2025 compared to 4.58% as of December 31, 2024. Short-term rates decreased during the first quarter of 2025 with the 3-month secured overnight financing rate at 4.29% as of March 31, 2025 compared to 4.31% as of December 31, 2024.

Current wording

Medium and long-term rates experienced some volatility during the second quarter of 2025 before ending the quarter relatively flat, with the US 10-year Treasury yield at 4.24% as of June 30, 2025 compared to 4.23% as of March 31, 2025. Short-term rates were generally flat during the second quarter of 2025 with the 3-month secured overnight financing rate at 4.29% as of each of June 30, 2025 and March 31, 2025, respectively.

Previous wording

We address interest rate risk through managing the duration of the liabilities we source with assets we acquire through asset liability management (ALM) modeling. As part of our investment strategy, we purchase floating rate investments, which we expect would perform well in a rising interest rate environment and which we expect would underperform in a declining rate environment. We manage our interest rate risk in a declining rate environment through hedging activity or the issuance of additional floating rate liabilities to lower our overall net floating rate position. As of March 31, 2025, our net invested asset portfolio included $52.9 billion of floating rate investments, or 20% of our net invested assets, and our net reserve liabilities included $35.7 billion of floating rate liabilities at notional, or 13% of our net invested assets, resulting in $17.2 billion of net floating rate assets, or 7% of our net invested assets.

Current wording

We address interest rate risk through managing the duration of the liabilities we source with assets we acquire through asset liability management (ALM) modeling. As part of our investment strategy, we purchase floating rate investments, which we expect would perform well in a rising interest rate environment and which we expect would underperform in a declining rate environment. We manage our interest rate risk in a declining rate environment through hedging activity or the issuance of additional floating rate liabilities to lower our overall net floating rate position. As of June 30, 2025, our net invested asset portfolio included $55.9 billion of floating rate investments, or 20% of our net invested assets, and our net reserve liabilities included $40.8 billion of floating rate liabilities at notional, or 15% of our net invested assets, resulting in $15.1 billion of net floating rate assets, or 5% of our net invested assets.

Previous wording

If prevailing interest rates were to rise, we believe our products would be more attractive to consumers and our sales would likely increase. If prevailing interest rates were to decline, it is likely that our products would be less attractive to consumers and our sales would likely decrease. In periods of prolonged low interest rates, the net investment spread may be negatively impacted by reduced investment income to the extent that we are unable to adequately reduce policyholder crediting rates due to policyholder guarantees in the form of minimum crediting rates or otherwise due to market conditions. Our policyholder account balances include deferred annuities, indexed annuities, funding agreements and other investment-type contracts, the latter of which is comprised of immediate annuities without significant mortality risk (including pension group annuities without life contingencies) and assumed endowments without significant mortality risks. Our funding agreements and other investment-type products provide us little to no discretionary ability to change the rates of interest that determine the amounts payable to the respective policyholder or institution. A significant majority of our deferred annuity products have crediting rates that we may reset annually upon renewal, following the expiration of the current guaranteed period. While we have the contractual ability to lower these crediting rates to the guaranteed minimum levels at renewal, our willingness to do so may be limited by competitive pressures. See Note 7 – Long-duration Contracts to the condensed consolidated financial statements for our deferred and indexed annuity policyholder account balances by range of guaranteed minimum crediting rates and the related distance to those respective guaranteed minimums.

Current wording

If prevailing interest rates were to rise, we believe our products would be more attractive to consumers and our sales would likely increase. If prevailing interest rates were to decline, it is likely that our products would be less attractive to consumers and our sales would likely decrease. In periods of prolonged low interest rates, the net investment spread may be negatively impacted by reduced investment income to the extent that we are unable to adequately reduce policyholder crediting rates due to policyholder guarantees in the form of minimum crediting rates or otherwise due to market conditions. Our policyholder account balances include deferred annuities, indexed annuities, funding agreements and other investment-type contracts, the latter of which is comprised of immediate annuities without significant mortality risk (including pension group annuities without life contingencies) and assumed endowments without significant mortality risks. A significant majority of our deferred annuity products have crediting rates that we may reset annually upon renewal, following the expiration of the current guaranteed period. While we have the contractual ability to lower these crediting rates to the guaranteed minimum levels at renewal, our willingness to do so may be limited by competitive pressures. See Note 7 – Long-duration Contracts to the condensed consolidated financial statements for our deferred and indexed annuity policyholder account balances by range of guaranteed minimum crediting rates and the related distance to those respective guaranteed minimums. Our funding agreements and other investment-type products provide us little to no discretionary ability to change the rates of interest that determine the amounts payable to the respective policyholder or institution.

Previous wording

According to the Life Insurance and Market Research Association (LIMRA), total annuity market sales in the US were $432.6 billion for the year ended December 31, 2024, a 12.2% increase from the same time period in 2023. In the total annuity market, for the year ended December 31, 2024 (the most recent period for which specific market share data is available), we were the largest provider of annuities based on sales of $36.0 billion, translating to an 8.3% market share. For the year ended December 31, 2023, we were the largest provider of annuities based on sales of $35.5 billion, translating to a 9.2% market share.

Current wording

According to the Life Insurance and Market Research Association (LIMRA), total annuity market sales in the US were $106.4 billion for the three months ended March 31, 2025, a 0.3% decrease from the same time period in 2024. In the total annuity market, for the three months ended March 31, 2025 (the most recent period for which specific market share data is available), we were the largest provider of annuities based on sales of $9.5 billion, translating to an 8.9% market share. For the three months ended March 31, 2024, we were the largest provider of annuities based on sales of $9.7 billion, translating to a 9.1% market share.

Previous wording

According to LIMRA, total fixed annuity market sales in the US were $306.4 billion for the year ended December 31, 2024, a 6.9% increase from the same time period in 2023. In the total fixed annuity market, for the year ended December 31, 2024 (the most recent period for which specific market share data is available), we were the largest provider of fixed annuities based on sales of $34.8 billion, translating to an 11.4% market share. For the year ended December 31, 2023, we were the largest provider of fixed annuities based on sales of $34.7 billion, translating to a 12.1% market share.

Current wording

According to LIMRA, total fixed annuity market sales in the US were $73.7 billion for the three months ended March 31, 2025, a 6.1% decrease from the same time period in 2024. In the total fixed annuity market, for the three months ended March 31, 2025 (the most recent period for which specific market share data is available), we were the largest provider of fixed annuities based on sales of $9.2 billion, translating to a 12.4% market share. For the three months ended March 31, 2024, we were the largest provider of fixed annuities based on sales of $9.4 billion, translating to a 12.0% market share.

Previous wording

According to LIMRA, total fixed indexed annuity market sales in the US were $126.9 billion for the year ended December 31, 2024, a 32.3% increase from the same time period in 2023. For the year ended December 31, 2024 (the most recent period for which specific market share data is available), we were the largest provider of FIAs based on sales of $13.6 billion, translating to a 10.7% market share. For the year ended December 31, 2023, we were the second largest provider of FIAs based on sales of $10.8 billion, translating to an 11.2% market share.

Current wording

According to LIMRA, total fixed indexed annuity (FIA) market sales in the US were $27.8 billion for the three months ended March 31, 2025, a 2.8% decrease from the same time period in 2024. For the three months ended March 31, 2025 (the most recent period for which specific market share data is available), we were the largest provider of FIAs based on sales of $3.4 billion, translating to a 12.1% market share. For the three months ended March 31, 2024, we were the largest provider of FIAs based on sales of $4.2 billion, translating to a 14.5% market share.

Previous wording

According to LIMRA, RILA market sales in the US were $65.4 billion for the year ended December 31, 2024, a 38.3% increase from the same time period in 2023. For the year ended December 31, 2024 (the most recent period for which specific market share data is available), we were the twelfth largest provider of RILAs based on sales of $1.2 billion, translating to a 1.8% market share. For the year ended December 31, 2023, we were the eleventh largest provider of RILAs based on sales of $851 million, translating to a 1.8% market share. We believe RILAs represent a significant growth opportunity for Athene.

Current wording

According to LIMRA, total registered index-linked annuity (RILA) market sales in the US were $17.4 billion for the three months ended March 31, 2025, a 20.6% increase from the same time period in 2024. For the three months ended March 31, 2025 (the most recent period for which specific market share data is available), we were the eleventh largest provider of RILAs based on sales of $353 million, translating to a 2.0% market share. For the three months ended March 31, 2024, we were the tenth largest provider of RILAs based on sales of $291 million, translating to a 2.0% market share. We believe RILAs represent a significant growth opportunity for Athene.

Previous wording

In addition to our results presented in accordance with 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

Current wording

In addition to our results presented in accordance with 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. See–Non-GAAP Measure Reconciliations for the appropriate reconciliations to the most directly comparable US GAAP measures.

Previous wording

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 on business related to 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.

Current wording

Cost of funds includes liability costs related to cost of crediting on 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 on business related to 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.

Previous wording

Adjusted leverage 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 leverage ratio is calculated as total debt at notional value adjusted to exclude 50% of the notional value of subordinated debt as an equity credit plus 50% of preferred stock divided by adjusted capitalization. Adjusted capitalization includes our adjusted AHL common stockholder’s equity, preferred stock and the notional value of our total debt. Adjusted AHL common stockholder’s equity is calculated as the ending AHL stockholders’ 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 leverage ratio should not be used as a substitute for the leverage ratio. However, we believe the adjustments to stockholders’ equity and debt are significant to gaining an understanding of our capitalization, debt and preferred stock utilization and overall leverage capacity, because they provide insight into how rating agencies measure our capitalization, which is a consideration in how we manage our leverage capacity.

Current wording

Adjusted leverage 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 leverage ratio is calculated as total debt at notional value adjusted to exclude 50% of the notional value of subordinated debt as an equity credit plus 50% of the notional value of our preferred stock divided by adjusted capitalization. Adjusted capitalization includes our adjusted AHL common stockholder’s equity and the notional value of our preferred stock and total debt. Adjusted AHL common stockholder’s equity is calculated as the ending AHL stockholders’ 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 leverage ratio should not be used as a substitute for the leverage ratio. However, we believe the adjustments to stockholders’ equity and debt are significant to gaining an understanding of our capitalization, debt and preferred stock utilization and overall leverage capacity, because they provide insight into how rating agencies measure our capitalization, which is a consideration in how we manage our leverage capacity.