Exhibit 99.1
Presentation to AAA Investors on Athene February 2013
Athene – December 31, 2012 Summary Valuation 2 Athene GAAP Athene GAAP Athene
Book Value Book Value Athene Statutory ($ in millions) Fair Value (3) Incl. AOCI
(3) Excl. AOCI (3) Book Value (2) Total Athene Value $2,046 $1,943 $1,658 $1,859
Fair Value / Book Value 1.05x 1.23x 1.10x Athene Valuation At Multiples of GAAP
Book Value Excl. AOCI Total Athene Value AAA Share 1.00x $1,658 $1,282 1.15x
1,907 1,474 1.23x 2,046 1,582 1.50x 2,487 1,922 1.75x 2,902 2,243 2.00x 3,316
2,563 Footnotes Note: Athene numbers are unaudited. AAA shares include
outstanding 2 investments still at AAA level and exclude additional shares
related to unfunded commitments from other Athene shareholders. 1.) Excludes
dilution from management incentive shares. 2.) Includes $40 million surplus
note. 3.) Under the existing agreements with its shareholders Athene called
$81.7 million in capital from Other Shareholders. As a result on a proforma
basis for 12/31/12, AAA’s ownership in Athene would be diluted to 72.5% and
Other Shareholders to 27% and both Athene GAAP Book Value (incl and excl AOCI)
and Athene Fair Value would increase by the amount of new capital contributed.
Athene Athene ($ and shares in millions) Shares Ownership (3) AAA 83.4 77% Other
Shareholders 23.8 22% Athene Management (1) 0.4 0% Total Athene 107.7 100%
3 The Business Model Athene is effectively a spread business Athene earns the
difference between its investment return on assets and the rate on its
liabilitiesReturn on equity (ROE) benefits from targeted leverage of
approximately 10x-14x (using a non GAAP Management View measure)Because fixed
annuities provide stable, long-term funding, Athene’s objective is to capture
today’s historically high spreads for the life of the liabilitiesAs of September
30, 2012, 80% of the liabilities are subject to surrender charges and 44% of the
liabilities also have Market Value Adjustments. Surrender charges and Market
Value Adjustments discourage withdrawal, but cannot prevent them. The
Opportunity Athene was formed in July 2009 to capitalize on favorable market
conditions in the dislocated annuity insurancesector Upheaval / volatility in
financial markets increased the demand for guaranteed savings products by retail
investorsLife insurers withdrew from the fixed annuity market and are writing
less new business and looking to divest blocks of existing liabilities due to
capital needs that were impacted negatively by the financial crisisRegulatory
environment encourages many insurance companies to explore
reinsuranceDemographics point to a long-term opportunity, driven by dramatically
increased need for tax-efficient savings vehicles to support aging baby-boomers
The Partnership Athene and Apollo bring together a unique combination of
insurance industry experience, investment and risk management expertise and
access to capital Athene was envisioned by Jim Belardi and Chip Gillis, two
executives with extensive experience in both insurance and asset managementThey
are supported by a team with significant actuarial, risk management, and product
design expertiseApollo Global Management LLC’s (“Apollo” or “AGM”) early
involvement represented a vote of confidence, and provided invaluable exposure
to risk management, investment capabilities and client relationships The Vision
Athene is positioned to become a global leader in the fixed annuity business
Athene has successfully executed a number of acquisitions (Liberty Life
Insurance Company (“LLIC”), Investors Insurance Corporation (“IIC”),
Presidential Life Insurance Company (“PLIC”)), and currently in the process of
closing the Aviva USA acquisition, to build scaleThe next stage is to
consolidate and expand Athene from a strong base, with a focus on policyholder
protection, disciplined production of quality business and market-leading risk
management Athene – Who We Are
Onshore Life Insurance Platform (Athene Annuity) Wholesale Distribution (Athene
Life Insurance Co) Offshore Reinsurance (Athene Life Re) Core of Athene’s
offshore reinsurance platform because of tax neutral status Reinsures products
generated by Athene’s U.S. businesses as well as directly by third party life
insurance companies Products reinsured include MYGAs (multi -year guaranteed
annuity), EIAs (equity-indexed annuities), payout annuities, and institutional
products like GIC-backed notes (guaranteed investment contracts) and funding
agreements from ALIC Strong relationship with primary regulator, the Bermuda
Monetary Authority Total assets under management (“AUM”) as of December 31, 2012
estimated to be $10.5 billon of which approximately $2.5 billion are from third
parties directly ceding to ALRe Onshore Insurance Platform (Athene Annuity)
Wholesale Distribution (Athene Life Insurance Co.) Retail Distribution (Athene
Annuity) With Athene Annuity, Athene has a B++ (financial strength rating from
AM Best) U.S. reinsurance platform, licenses in 50 states and strong
distribution capability Ability to structure reinsurance treaties with U.S.
based life insurance companies Total AUM from U.S. business as of December 31,
2012 estimated to be $10.0 billion Delaware domiciled company focused on
selling funding agreement backed notes to institutional investors Products are
scalable without any ability to surrender prior to maturity Became a member of
the FHLBI 1 in late 2010, and issued its first funding agreement ($100mm) to the
FHLBI in January 2011 In discussions with S&P to obtain a rating Total AUM of
ALIC as of December 31, 2012 estimated to be $171 million Through Athene
Annuity, launched a retail / distribution business Annuity products are designed
to be capital efficient Provides infrastructure and distribution relationships
Limited start-up costs Projected run-rate product split: mix of MYGAs and EIAs
Athene Annuity developing its own MYGA & EIA products Total 2012 retail flow
estimated to be $268 million (EIA of $134 million and MYGA of $124 million) 1
Federal Home Loan Bank of Indianapolis. The Federal Home Loan Banks are a system
of 12 banks owned by over 8,100 regulated financial institutions from all 50
states. 4 Athene Has the Flexibility to Deploy Capital Across Multiple Business
Lines
5 | | Athene Holding Company Information: Athene Holding Ltd. Chesney House, First |
Floor 96 Pitts Bay Road Pembroke, HM08, Bermuda As of December 31, 2012, Athene
Holding had approximately 255 employees As of December 31, 2012, Athene Asset
Management LLC1 (“AAM”) had approximately 40 employees Athene’s and AAM’s major
office locations are as follows: Athene Asset Management LLC1 Manhattan
Beach , California Athene Life Re & Athene Holding Ltd Hamilton, Bermuda
Athene Annuity Retail Wilmington, Delaware Athene Life Insurance Company New
Albany, Indiana Presidential Life Corporation Nyack, New York Athene Annuity
& Life Assurance Company Greenville, South Carolina Athene Asset Management
LLC1 IT and Operations Pasadena, California 1 See page 8 for AAM description and
relationship to Athene Holding. Athene Holding Ltd.
6 | | Athene—Building a Leading Annuity Franchise 2009 6/29/09: Licensing of |
Athene Life Re Ltd. (“ALRe”) 2010 2011 2012 2013 4/29/11: Acquisition of Liberty
Life Insurance Company (“LLIC”) $2.8bn block of fixed and indexed annuities
Insurance licenses in 49 states and Washington D.C. SC domiciled 7/18/11:
Acquisition of IIC $1.4bn block of fixed and indexed annuities DE domiciled
2/1/12: LLIC renamed Athene Annuity & Life Assurance Company (“Athene Annuity”)
Rated B++ by AM Best Retail sales & marketing office in DE Significant business
growth 12/21/12: Announced planned acquisition of Aviva USA Corporation and its
subsidiaries (“Aviva”) 4/29/11: Reinsured all of LLIC life and health business
to Protective $~2bn of assets transferred 12/17/11: Reinsured $3.1bn of fixed
annuities and funding agreements from Transamerica 12/28/12: Completed
acquisition of Presidential Life Corporation and life subsidiary PLIC Expanded
Athene’s retail sales and reinsurance capabilities 9/30/10: De novo licensing of
Athene Life Insurance Company (“ALIC”) 7/1/09: Reinsured fixed annuities from
American Equity Investment Life Insurance Company (currently $1.6bn)
Jim BelardiChairman and Chief Executive Officer of Athene Holding Ltd., Chief
Executive Officer and Chief Investment Officer of Athene Asset Management LLC
Prior to founding AHL and AAM Jim was President of SunAmerica Life Insurance
Company and was also Chief Investment Officer of AIG Retirement Services, Inc.,
responsible for a $250bn invested asset portfolio. In 1994, Jim created the
GIC-backed note (GICBN), which has developed into a $300bn market. Grant
KvalheimPresident and Chief Financial Officer of Athene Holding Ltd. Grant
was Co-President of Barclays Capital from September 2005 until the end of 2007.
Having joined Barclays in 2001 as Global Head of Credit Products, Grant
converted a European cash investment grade business into a leading global cash
and derivatives business across both securitized and non-securitized credit
products. Assuming responsibility for Investment Banking in late 2001, he
similarly expanded the Investment Banking platform. Chip GillisChief Executive
Officer of Athene Life Re Ltd. Prior to founding Athene, Chip was a Senior
Managing Director of Bear, Stearns & Co. Inc. (“BSC”) and Head of BSC’s
Insurance Solutions Group that provided advice and solutions to Life and Annuity
companies. He led BSC’s entry into the GICBN business (which subsequently ranked
consistently in the top 6 dealers in the market) and created the turn-key
Premium Asset Trust Series program. It was recognized by S&P as the only
non-issuer insurance-only program. Chip also serves on the Board of Directors of
the Bermuda International Long-Term Insurers and Reinsurers, an association
representing the long-term insurer and reinsurer groups in Bermuda of which
Athene is a founding member. Chip SmithPresident of Athene Annuity & Life
Assurance Company Prior to joining Athene Annuity, Chip was President and CEO
of Liberty Life Insurance Company (now, Athene Annuity) from April 2010 until
the acquisition by AHL in April 2011. Before becoming President of Athene
Annuity, he served as Vice President, Treasurer, and Chief Financial Officer,
with oversight of all finance and related areas of the U.S. insurance
operations. Steve CernichExecutive Vice President of Corporate Development,
Athene Annuity & Life Assurance Company Prior to joining Athene Annuity,
Steve was Chief Risk Management Officer and EVP for Capital Assurance
Corporation. He had responsibility for all product development, pricing
valuation and asset/liability management and oversaw the company’s institutional
line of business and managed the relationship with the firm’s external asset
manager. Steve built and managed the funding agreement line of business for XL
Life & Annuity, and built and managed the funding agreement business for Zurich
Kemper Life, with responsibility for its $9bn bank-owned life insurance (BOLI)
business. Chris GradyHead of Retail Distribution, Athene Annuity & Life
Assurance Company Former President, Distribution and Marketing of
GenworthFinancial’s U.S. Life Insurance Companies where he oversaw a diverse
multi-channel sales and marketing organization. Prior to joining Genworth, Chris
spent 14 years in senior leadership roles at Merrill Lynch ultimately serving as
Managing Director and National Sales Manager for Merrill’s Consumer Finance
Group. Years Experience 25 30 30 24 28 33 7 Leadership and Experience
Athene Asset Management – Strategy & Philosophy AAM1 is a buy and hold, total
return focused asset manager. As a result of the focus on asset allocation and
the need to adjust allocations as markets change, management views realized
gains as an important part of Athene’s earnings. Primarily manages diversified
fixed income portfolios, including allocations to Alternative Investments (hedge
funds, private equity) AAM is able to capture excess spread and generate
investment alpha through opportunistic portfolio allocation and by taking
complexity and illiquidity risk as well as credit risk Because Athene is a
patient, long-term investor that is comfortable with difficult to understand
products and situations, AAM is able to take advantage of opportunities often
overlooked by others AAM was formed shortly after the 2008 credit crisis, and
took advantage of opportunities to purchase high quality assets at depressed
prices Experienced in the nuances of insurance regulatory regimes and structures
efficient portfolios to optimize regulatory capital requirements Employs
sophisticated risk management practices to measure, manage, and shape the risk
in its portfolios Utilizes proprietary models to value, trade, and manage assets
Individual security selection is driven by fundamental credit analysis Generally
seeks investments that are cash flowing, exhibit mispricing or asset
dislocation, avoid binary outcomes, and are pull to par over the investment
horizon AAM manages all Athene assets. Of the total Athene AUM as of December
31, 2012, 63% is internally managed, 33% is sub- advised by Apollo and 4% is
sub-advised by other managers 8 1 AAM is owned by Apollo Global Management LLC
(“AGM” or “Apollo”) and certain members of Athene’s management team
Athene Asset Management – Risk Management AAM also provides asset risk
management services, utilizing a suite of systems, models, and methodologies in
measuring, managing, and monitoring the various risks in the asset portfolios
managed by AAM. AAM employs individuals with extensive risk management
experience across a variety of fixed income assets and trading environments. AAM
prepares weekly and monthly Risk Reports used by management, the Board, and
portfolio managers in tracking various risk metrics (durations, convexity,
weighted average life, deltas, cash flow mismatches, etc.) and investment risk
limits in the asset portfolios and relative to the liabilities. AAM measures
liquidity in the asset portfolio, hedges non-USD FX risk, and performs
credit-related and other macroeconomic stress tests to the portfolios. AAM
reports to the Risk Committee of Athene’s Board of Directors that convenes
quarterly to discuss risks and opportunities in Athene’s various portfolios and
to decide on changes in risk management focus or strategy, if any. 9
Athene Asset Management – Portfolio Snapshot $13.6bn book value under management
with an overall portfolio book yield of 6.77%1 as of December 31, 2012 Assets2
by Yield (CHART) 10 1 Targeted book yield after sub-advisory fees but before AAM
management fees 2Assets include non-rated assets 3 Non-rated assets include
CMLs, Partnership interests and other Alternative assets Assets3 by NAIC Rating
Assets2 by Asset Class
Athene Asset Management – Key Personnel Jim Belardi, CEO and CIO, formerly
President of SunAmerica Life Insurance Company and was also Chief Investment
Officer of AIG Retirement Services, Inc., responsible for a $250bn invested
asset portfolio Jim Hassett, EVP, formerly Managing Director and Senior
Portfolio Manager for the High Yield corporate bond strategy at Trust Company of
the West overseeing a $4bn portfolio Rob Graham, EVP, formerly co-head of
Non-Agency adjustable rate mortgage desk at Countrywide Financial Nancy DeLiban,
EVP, formerly Managing Director of Countrywide Financial overseeing all
Non-Agency MBS trading, whole loan conduit, and diligence operations Jeffrey
Boland, EVP, formerly Director of Credit Risk Management at a $13bn
multi-strategy asset manager 11
Athene—High-Level Business Model Overview 12 Athene is effectively a spread
business – it earns the difference between its investment return on assets and
the rate on its liabilities – whose return on equity benefits from targeted
leverage of approximately 10x-14x Athene generates its earnings by capturing
today’s spread based on low-cost, stable long term funding matched by an
outperforming asset management portfolio This spread can be leveraged due to a
business model that requires a 7 – 10% Capital / Reserve ratio (which translates
to ~10-14x leverage) (1) The difference between the 6.77% current book yield and
the 6% asset yield is represented by reduction for lower on the run new
investment yields and asset management costs
Business Model to Management View Financials 13 Athene’s overall spread business
framework forms the foundation for its strong overall economic performance to
date Athene includes certain accounting and insurance-specific items to its
financials, which add some complexity, as well as take account of certain other
developments in the business (most notably significant realized gains on its
investments) However, general financial performance is still ultimately driven
by Athene’s spread model: Athene earns the difference between its investment
return on assets and the rate on its liabilities – whose return on equity
benefits from targeted leverage of approximately 10x-14x Key High Level Model to
2012 Management view Financials1 Adjustment Items: Capital / Reserves Level: Due
to the AAA transaction, strong earnings generation, and still being in the
process of closing the Aviva transaction, Athene is at ~15%—significantly
above target 7-10% of high level framework, resulting in substantial current
excess capital Investment Income: Actual 2012 yield performance was slightly
above the high end of targeted range of 6-7% driven by higher than expected
asset redeployment than was projected (but also includes investment management
fees) Cost of Funds / Reserves: Slightly increased versus high-level economic
model driven by actual financials (i) including various accounting adjustments
and (ii) excluding positive effect of economic capital generated from discounted
acquisition purchases that can be used to further pay down future liability
costs (please see cost of fund pages for further detail on adjustments between
cash and management view cost of funds) G&A & Taxes: Slightly above high level
framework due to scaling of platform and one-time costs associated with the
Presidential & Aviva transactions in 2012 Other: Significant benefit in 2012
actual performance versus high level framework from over $100 million of
realized gains in investment portfolio (as well as additional unrealized
investment gains), driven by outperformance and alpha generation in Athene’s
investment strategies 1 Full year estimate inclusive of the de minimis impact of
the Presidential transaction as it has come in end of the year.
Business Model to Management View Financials (Cont’d) 14 1 Management view (see
Appendix for further detail and reconciliation to GAAP); full year estimate
inclusive of the de minimis impact of the Presidential transaction as it has
come in end of the year. 2 Please see cost of funds pages for further detail on
adjustments between economic and management view cost of funds. 3 Removes
accumulated other comprehensive income (“AOCI”) – which is primarily composed of
unrealized gains in investments. 4 Includes excess capital and removes
accumulated other comprehensive income (“AOCI”) – which is primarily composed of
unrealized gains in investments.
Athene – Cost of funds 15 Projections of MYGA Policy with credited rate of 2.30%
1) Cash COF with 2.3% crediting rate Cash COF is defined as the IRR of the Total
Liability Cash Flows over the entire life of the policy, starting with the
initial premium. As such it is an inception to date calculation. Cash COF will
change period to period only if actual results deviate from expected. For
example, a Company’s decision to lower the crediting rate below 2.3% would lower
the Cash COF, while a higher lapses than expected would increase the COF. Below
are the projected cash flows of a newly issued policy with a crediting rate of
2.3%. This is not indicative of the company’s current crediting rate, but rather
is an illustration on the methodology of the Cash COF. The policy’s Cash COF is
3.49%, which is the IRR of the quarterly cash flows. Cash flows have been
suppressed to annual for ease of presentation. This COF example above assumes a
new policy issued at current rates; however, in certain acquisition scenarios,
Athene will use another means of getting at the same cash COF. For example, in
certain acquisitions, Athene will purchase businesses with elevated costs of
funds, but purchase these assets at a discount and then use this discount to pay
down the cost of funds to an economically attractive level (analogous to a bond
bought at a premium, the discount creates additional capital (the premium) that
reduces the cost of funds on an economic basis)
Athene – Cost of funds (Cont’d) 16 2) Management View COF1 Athene’s management
view financials include certain accounting-based items that create differences
with cash (i.e. economic) COF First, management view COF applies some
insurance-based accounting concepts (most notably DAC) that add non-cash
expenses to the cost of liabilities Second, in the case of acquisitions,
management view COF excludes any additional capital created from purchases made
at a discount – capital that from an economic basis can be used to further pay
down the cost of liabilities Management view COF differs in approach from cash
COF as the former incorporates certain GAAP accounting concepts without
purporting to be in accordance with GAAP1 However, from an underwriting and
economic point of view, Athene follows the approach of Cash COF 1 Management
View accounting; please see Appendix for bridge between Management View and
GAAP.
17 Athene Holding Ltd. Financial Information – Definitions
18 Athene Holding Ltd. Financial Information 1 Full year estimate inclusive of
the Presidential transaction Note: To understand the difference between
Management view and GAAP financial statements, see Appendix I.
19 Athene Holding Ltd. Financial Information (Cont’d) Note: To understand the
difference between Management view and GAAP financial statements, see Appendix
I. 1 Full year estimate inclusive of the de minimis impact of the Presidential
transaction as it has come in end of the year. 2 Consists of index credits with
associated call option payoffs and GLWB expense for EIA policies, interest
credited on MYGA policies and total earnings on AEGON short term portfolio net
of associated DAC amortizations 3 Included in the G&A expenses are compensation
for management services payable to Apollo. The compensation is based on a
percentage of capital and surplus and will be expensed to mid 2019. However,
upon the sale of the company or a QIPO event, the remainder of the unamortized
compensation that would have been expensed to 2019 will be immediately
recognized 4 Realized capital gains and losses on securities, net of incentive
fees and any impairments 5 Market Value Adjustments 6 Unrealized gains or losses
from securities held within third party funds withheld accounts 7 Consists of
option income in excess of option payoffs and change in VED reserves in excess
of index credits for EIA policies 8 Consists of amortization of DAC, URR, SIA,
VOBA, associated with non operating earnings. Also includes bargain purchase
gain and change in GLWB reserves associated with non operating earnings 9
Unrealized gains or losses on derivative instruments (interest rate swaps, etc.)
10 The 2011 earnings were impacted by the hedging of the Liberty transaction 11
Based on Investible Assets
Overview of Presidential Life Acquisition 20 On July 13, 2012, Athene’s Delaware
subsidiary, Athene Annuity & Life Assurance Company (“AA”), announced the
acquisition of Presidential Life Corporation (“Presidential Life”), a Delaware
corporation headquartered in Nyack, NY AA agreed to acquire Presidential Life
for $14.00 per share in cash, representing an aggregate purchase price of
approximately $415 million On December 28, 2012, following full regulatory
approval, AA closed on its acquisition of Presidential Life The Presidential
Life acquisition is consistent with Athene’s overall strategy of taking
advantage of a dislocated and undervalued life insurance sector to acquire fixed
annuity liabilities– with low-cost funding to invest assets against and earn a
large economic net spread Key Transaction Highlights Attractive fixed annuity
business at material discount to book value Capital accretive to Athene balance
sheet and shareholders (no additional funds used beyond Athene’s pre-transaction
capital base) Gives Athene presence in New York market, one of the largest
markets in the U.S. With this acquisition, Athene have licenses in all 50 states
Retail distribution platform to further grow Athene’s retail franchise
GAAP Basis in millions Pro forma September 30, 2012(unaudited) Invested Assets $
3,960 Other Assets 365 Total Assets $ 4,325 Reserves $ 3,715 Other Liabilities
195 Total Equity 415 Total Liabilities and Equity $ 4,325 21 Further information
on the acquisition of Presidential Life on December 28, 2012 and about
Presidential prior to such acquisition can be found in Presidential Life’s
public filings with the U.S. Securities & Exchange Commission. Presidential Life
Forecasted Capital Overview 1 Differences in statutory and GAAP numbers driven
by Purchase GAAP (“PGAAP”) adjustments and different valuation methods for
reserves acquired. PGAAP represents the day one adjustments that are made to the
U.S. GAAP balance sheet of a company when the acquisition deal closes. These
adjustments are intended to mark the balance sheet to market for any assets and
liabilities not already at market such as certain liabilities. From a statutory1
perspective (the accounting framework that insurance regulators focus on for
capital adequacy), the acquisition will add ~$3.5 billion of assets to Athene –
a portion of which Athene plans to use to help further pay down the cost of
liabilities on the annuities acquired (and thereby further increase the
projected economic net spread of the business) Athene’s acquisition of
Presidential Life will add $4.3 billion of GAAP assets to Athene’s balance sheet
as of December 31, 2012 The $415 million purchase price implies a discount to
Presidential Life’s GAAP book value of 52% Had we owned Presidential for 2012,
the acquisition would have added $26 million of estimated GAAP earnings (post
PGAAP1 effects) and increased estimated ROE by 1.4%
22 On December 21, 2012, Athene announced that it will acquire Aviva plc’s U.S.
annuity and life insurance operations, including Aviva Life and Annuity Company,
based in Iowa, and Aviva Life and Annuity Company of New York. The closing is
subject to numerous regulatory and other closing conditions; hence no assurance
can be made that closing will occur. Athene will acquire Aviva for a purchase
price of $1.55 billion compared to a statutory book value of $2.7 billion,
implying a 43% discount – this discount can be used to further pay down Aviva’s
cost of liabilities Athene expects the transaction to close in the next 6-9
months The Aviva acquisition is a transformative transaction for Athene that
significantly enhances its scale and franchise value and makes Athene a leader
in the fixed annuity space Key Transaction Highlights Large scale business with
significant franchise value and is currently expected to add over $35 billion in
fixed annuity product to Athene’s balance sheet Capital accretive to Athene
balance sheet and shareholders (no additional funds used beyond Athene’s
pre-transaction capital base) Second largest fixed annuity writer by sales1 in
the US with $4-5 billion in annual sales over the last few years Expansive
retail, sales & marketing, and distribution network that further develops
Athene’s franchise value Forecasted Capital Overview Athene’s acquisition of
Aviva will add a significant amount of new assets to Athene’s balance sheet
Aviva is expected to be funded with internal means and it is projected that
additional capital will not be needed – and therefore the transaction should be
capital accretive 1 Source: LIMRA Overview of Aviva Acquisition
23 This presentation does not constitute an offer to sell, or the solicitation
of an offer to buy, any security of Athene Holding Ltd. (“Athene”). Certain
information contained herein maybe “forward – looking” in nature. These
statements include, but are not limited to, discussions related to Athene’s
expectations regarding the performance of its business, its liquidity and
capital resources and the other non^historical statements. These forward^looking
statements are based on management’s beliefs, as well as assumptions made by,
and information currently available to, management. When used in this
presentation, the words “believe,” “anticipate,” “estimate,” “expect,” “intend”
and similar expressions are intended to identify forward^looking statements.
Although management believes that the expectations reflected in these
forward^looking statements are reasonable, it can give no assurance that these
expectations will prove to have been correct. These statements are subject to
certain risks, uncertainties and assumptions. Due to these various risks,
uncertainties and assumptions, actual events or results or the actual
performance of Athene may differ materially from those reflected or contemplated
in such forward-looking statements. We undertake no obligation to publicly
update or review any forward^looking statements, whether as a result of new
information, future developments or otherwise. Information contained herein
may include information respecting prior performance of Athene. Information
respecting prior performance, while a useful tool, is not necessarily indicative
of actual results to be achieved in the future, which is dependent upon many
factors, many of which are beyond the control of Athene. The information
contained herein is not a guarantee of future performance by Athene, and actual
outcomes and results may differ materially from any historic, pro forma or
projected financial results indicated herein. Certain of the financial
information contained herein is unaudited or based on the application of
non-GAAP financial measures. These non^GAAP financial measures should be
considered in addition to and not as a substitute for, or superior to, financial
measures presented in accordance with GAAP. Furthermore, certain financial
information is based on estimates of management. These estimates, which are
based on the reasonable expectations of management, are subject to change and
there can be no assurance that they will prove to be correct. The information
that an evaluator may require in order to properly evaluate the business,
prospects or value of Athene. AAA or Athene does not have any obligation to
update this presentation and the information may change at any time without
notice. Certain of the information used in preparing this presentation was
obtained from third parties or public sources. No representation or warranty,
express or implied, is made or given by or on behalf of Athene or any other
person as to the accuracy, completeness or fairness of such information, and no
responsibility or liability is accepted for any such information. The
information on page 2 was prepared by AAA. This document is not intended to be,
nor should it be construed or used as, financial, legal, tax, insurance or
investment advice. There can be no assurance that Athene will achieve its
objectives. Past performance is not indicative of future success. All
information is as of the dates indicated herein. Disclaimer
24 Appendix I – Unaudited GAAP financial statements 9.30.12
25 Appendix I – Unaudited GAAP financial statements 9.30.12
26 Appendix I – Management View Financials Management’s view of the financial
statements differs from the Audited Financial Statements view Management balance
sheets are presented without the assets and liabilities relating to the effects
of reinsurance to Protective Life and the AEGON short portfolio1 It excludes the
impact of grossing up the assets and liabilities from the consolidation effect
from the CMBS Partnerships2. Other adjustments include reclassifications of
negative liability balances to the assets section, such as VOBA and other
liabilities, including accruals for expenses Management income statements
present results by re-categorizing transactions into operating and non-operating
based on management’s view of what constitutes as operating income 1 AEGON short
portfolio represents a group of assets for which the credit risk has been
reinsured out of the company via total return swap 2 CMBS partnerships
represents a partnership investment that is consolidated for GAAP and is
composed of highly rated CMBS assets backing a fixed credit facility
27 Appendix I – Financial report bridges * Please see page 19 for further
information on these items
