Athene Holding (ATH-PA) 8-K Athene Holding LTD. Reports

Table of Contents
FINANCIAL RESULTS
Financial Highlights	3
Condensed Consolidated Statements of Income (GAAP view)	4
Segment Results of Operations (Management view)	5
Reconciliation of Earnings Measures	6
Retirement Services Segment Highlights	7
Condensed Consolidated Balance Sheets	8
ASSETS
Investments (GAAP view)	10
Invested Assets (Management view)	11
Investment Funds (GAAP view)	12
Alternative Investments (Management view)	13
Funds Withheld at Interest (GAAP view)	14
Net Investment Earned Rates	15
Credit Quality of Securities & Invested Assets	17
LIABILITIES
Reserve Liabilities & Rollforwards	20
Deferred Annuity Liability Characteristics	21
CAPITAL
Capitalization & Regulatory Capital Ratios	22
Financial Strength, Credit Ratings & Share Data	23
ADDITIONAL INFORMATION
Notes to the Financial Supplement	24
Non-GAAP Reconciliations	26

Financial Highlights Unaudited (in millions, except percentages and per share data)
	Quarterly Trends															Δ					Year-to-Date						Δ
	1Q’18			2Q’18			3Q’18			4Q’18			1Q’19			Q/Q		Y/Y			2018			2019			Y/Y
SELECTED INCOME STATEMENT DATA
Net income (loss)	$	277		$	257		$	623		$	(104	)	$	708		781	%	156	%		$	277		$	708		156	%
Adjusted operating income	241			288			371			240			287			20	%	19	%		241			287			19	%
FINANCIAL RATIOS
Return on assets (ROA)	1.14		%	0.98		%	2.14		%	(0.34		)%	2.19		%	253bps		105bps			1.14		%	2.19		%	105bps
Adjusted operating ROA	1.24		%	1.34		%	1.49		%	0.88		%	1.02		%	14bps		(22)bps			1.24		%	1.02		%	(22)bps
Net investment spread – Retirement Services	1.79		%	1.90		%	1.78		%	1.43		%	1.36		%	(7)bps		(43)bps			1.79		%	1.36		%	(43)bps
Return on equity (ROE)	12.4		%	12.0		%	28.6		%	(4.8		)%	30.8		%	3,560bps		1,840bps			12.4		%	30.8		%	1,840bps
Adjusted operating ROE	12.4		%	14.2		%	17.2		%	10.8		%	12.8		%	200bps		40bps			12.4		%	12.8		%	40bps
Adjusted operating ROE – Retirement Services	17.8		%	19.8		%	23.2		%	16.0		%	14.4		%	(160)bps		(340)bps			17.8		%	14.4		%	(340)bps
EARNINGS AND BOOK VALUE PER SHARE
Basic1	$	1.40		$	1.30		$	3.16		$	(0.53	)	$	3.65		789	%	161	%		$	1.40		$	3.65		161	%
Diluted – Class A2	1.40			1.30			3.15			(0.53		)	3.64			787	%	160	%		1.40			3.64			160	%
Adjusted operating earnings per share3	1.23			1.47			1.90			1.23			1.50			22	%	22	%		1.23			1.50			22	%
Book value per share	44.05			42.89			45.51			42.45			52.12			23	%	18	%		44.05			52.12			18	%
Adjusted book value per share3	40.37			42.27			45.53			45.59			47.30			4	%	17	%		40.37			47.30			17	%
SELECTED BALANCE SHEET DATA
Total assets	$	94,001		$	115,191		$	118,250		$	125,505		$	132,857		6	%	41	%		$	94,001		$	132,857		41	%
Invested assets	78,723			98,609			100,596			111,034			113,771			2	%	45	%		78,723			113,771			45	%
Total liabilities	85,314			106,729			109,272			117,229			122,740			5	%	44	%		85,314			122,740			44	%
Reserve liabilities	75,823			96,248			98,553			107,732			111,791			4	%	47	%		75,823			111,791			47	%
Debt	992			1,174			991			991			991			—	%	—	%		992			991			—	%
Total shareholders’ equity	8,687			8,462			8,978			8,276			10,117			22	%	16	%		8,687			10,117			16	%
Adjusted shareholders’ equity	7,946			8,303			8,976			8,823			9,102			3	%	15	%		7,946			9,102			15	%
DEPOSITS
Retail	$	1,286		$	2,038		$	2,200		$	2,018		$	1,816		(10	)%	41	%		$	1,286		$	1,816		41	%
Flow reinsurance	204			473			610			1,136			1,020			(10	)%	400	%		204			1,020			400	%
Funding agreements	300			125			—			225			—			(100	)%	(100	)%		300			—			(100	)%
Pension risk transfer	266			54			476			1,785			1,923			8	%	623	%		266			1,923			623	%
Total organic deposits	2,056			2,690			3,286			5,164			4,759			(8	)%	131	%		2,056			4,759			131	%
Inorganic deposits	—			19,104			—			7,878			—			(100	)%	—	%		—			—			—	%
Total deposits	$	2,056		$	21,794		$	3,286		$	13,042		$	4,759		(64	)%	131	%		$	2,056		$	4,759		131	%
Note: Please refer to Notes to the Financial Supplement section and the Non-GAAP Measure Reconciliations for discussion on adjusted operating income, adjusted operating ROE, adjusted operating ROA, net investment spread, adjusted book value per share, invested assets, reserve liabilities, and adjusted equity. 1 Basic earnings per share, including basic weighted average shares outstanding, includes all classes eligible to participate in dividends for each period presented. 2 Diluted earnings per shareona GAAP basis forClassA commonshares,includingdilutedClassAweightedaveragesharesoutstanding,includesthedilutiveimpacts,if any,ofClassB commonshares,ClassMcommonsharesandanyotherstock-basedawards. 3 Represents Class A common shares outstanding or weighted average common shares outstanding assuming conversion or settlement of all outstanding items that are able to be converted to or settled in Class A common shares, including the impacts of Class B common shares, Class M common shares and any other stock-based awards, but excluding any awards for which the exercise or conversion price exceeds the market value of our Class A common shares on the applicable measurement date.

3

Condensed Consolidated Statements of Income (GAAP view) Unaudited (in millions, except percentages)
	Quarterly Trends															Δ					Year-to-Date						Δ
	1Q’18			2Q’18			3Q’18			4Q’18			1Q’19			Q/Q		Y/Y			2018			2019			Y/Y
REVENUE
Premiums	$	278		$	731		$	526		$	1,833		$	1,966		7	%	607	%		$	278		$	1,966		607	%
Product charges	96			106			119			128			125			(2	)%	30	%		96			125			30	%
Net investment income	855			958			1,070			1,121			1,066			(5	)%	25	%		855			1,066			25	%
Investment related gains (losses)	(236		)	(2		)	816			(1,902		)	1,772			193	%	851	%		(236		)	1,772			851	%
Other-than-temporary impairment investment losses
Other-than-temporary impairment losses	(3		)	—			(7		)	(14		)	(2		)	86	%	33	%		(3		)	(2		)	33	%
Other-than-temporary impairment losses reclassified to (from) other comprehensive income	—			—			4			2			1			(50	)%	100	%		—			1			100	%
Net other-than-temporary impairment losses	(3		)	—			(3		)	(12		)	(1		)	92	%	67	%		(3		)	(1		)	67	%
Other revenues	6			6			10			4			12			200	%	100	%		6			12			100	%
Revenues related to consolidated variable interest entities
Net investment income	10			14			15			17			16			(6	)%	60	%		10			16			60	%
Investment related gains (losses)	5			(11		)	23			(35		)	5			114	%	—	%		5			5			—	%
Total revenues	$	1,011		$	1,802		$	2,576		$	1,154		$	4,961		330	%	391	%		$	1,011		$	4,961		391	%
BENEFITS AND EXPENSES
Interest sensitive contract benefits	$	31		$	342		$	742		$	(825	)	$	1,516		284	%	4,790	%		$	31		$	1,516		4,790	%
Amortization of deferred sales inducements	20			23			23			(12		)	5			142	%	(75	)%		20			5			(75	)%
Future policy and other policy benefits	401			864			928			1,994			2,295			15	%	472	%		401			2,295			472	%
Amortization of deferred acquisition costs and value of business acquired	82			89			36			(33		)	231			800	%	182	%		82			231			182	%
Dividends to policyholders	13			9			10			5			9			80	%	(31	)%		13			9			(31	)%
Policy and other operating expenses	142			153			158			172			165			(4	)%	16	%		142			165			16	%
Operating expenses of consolidated variable interest entities	—			1			—			—			—			—	%	—	%		—			—			—	%
Total benefits and expenses	689			1,481			1,897			1,301			4,221			224	%	513	%		689			4,221			513	%
Income (loss) before income taxes	322			321			679			(147		)	740			603	%	130	%		322			740			130	%
Income tax expense (benefit)	45			64			56			(43		)	32			174	%	(29	)%		45			32			(29	)%
Net income (loss)	$	277		$	257		$	623		$	(104	)	$	708		781	%	156	%		$	277		$	708		156	%

4

Segment Results of Operations (Management view) Unaudited (in millions, except percentages and per share data)
	Quarterly Trends																Δ				Year-to-Date						Δ
	1Q’18			2Q’18			3Q’18			4Q’18			1Q’19				Q/Q		Y/Y		2018			2019			Y/Y
ADJUSTED OPERATING INCOME – CONSOLIDATED
Fixed income and other investment income	$	798		$	921		$	1,036		$	1,142		$	1,154			1	%	45	%	$	798		$	1,154		45	%
Alternative investment income	95			88			90			62			49				(21	)%	(48	)%	95			49			(48	)%
Net investment earnings	893			1,009			1,126			1,204			1,203				—	%	35	%	893			1,203			35	%
Cost of crediting	(322		)	(368		)	(453		)	(516		)	(535		)		(4	)%	(66	)%	(322		)	(535		)	(66	)%
Other liability costs1	(208		)	(220		)	(221		)	(332		)	(260		)		22	%	(25	)%	(208		)	(260		)	(25	)%
Cost of funds	(530		)	(588		)	(674		)	(848		)	(795		)		6	%	(50	)%	(530		)	(795		)	(50	)%
Operating expenses	(73		)	(70		)	(78		)	(82		)	(82		)		—	%	(12	)%	(73		)	(82		)	(12	)%
Interest expense	(10		)	(14		)	(13		)	(12		)	(13		)		(8	)%	(30	)%	(10		)	(13		)	(30	)%
Pre-tax adjusted operating income	280			337			361			262			313				19	%	12	%	280			313			12	%
Income tax (expense) benefit – operating	(39		)	(49		)	10			(22		)	(26		)		(18	)%	33	%	(39		)	(26		)	33	%
Adjusted operating income	$	241		$	288		$	371		$	240		$	287			20	%	19	%	$	241		$	287		19	%
Adjusted operating earnings per share	$	1.23		$	1.47		$	1.90		$	1.23		$	1.50			22	%	22	%	$	1.23		$	1.50		22	%
ADJUSTED OPERATING INCOME – RETIREMENT SERVICES
Fixed income and other investment income	$	775		$	897		$	1,021		$	1,132		$	1,151			2	%	49	%	$	775		$	1,151		49	%
Alternative investment income	91			86			87			99			20				(80	)%	(78	)%	91			20			(78	)%
Net investment earnings	866			983			1,108			1,231			1,171				(5	)%	35	%	866			1,171			35	%
Cost of crediting	(322		)	(368		)	(453		)	(516		)	(535		)		(4	)%	(66	)%	(322		)	(535		)	(66	)%
Other liability costs1	(208		)	(220		)	(221		)	(332		)	(260		)		22	%	(25	)%	(208		)	(260		)	(25	)%
Cost of funds	(530		)	(588		)	(674		)	(848		)	(795		)		6	%	(50	)%	(530		)	(795		)	(50	)%
Operating expenses	(58		)	(56		)	(63		)	(65		)	(62		)		5	%	(7	)%	(58		)	(62		)	(7	)%
Interest expense	—			(3		)	(2		)	—			(2		)		(100	)%	(100	)%	—			(2		)	(100	)%
Pre-tax adjusted operating income	278			336			369			318			312				(2	)%	12	%	278			312			12	%
Income tax (expense) benefit – operating	(39		)	(49		)	10			(22		)	(26		)		(18	)%	33	%	(39		)	(26		)	33	%
Adjusted operating income	$	239		$	287		$	379		$	296		$	286			(3	)%	20	%	$	239		$	286		20	%
ADJUSTED OPERATING INCOME (LOSS) – CORPORATE & OTHER
Fixed income and other investment income	$	23		$	24		$	15		$	10		$	3			(70	)%	(87	)%	$	23		$	3		(87	)%
Alternative investment income	4			2			3			(37		)	29				178	%	625	%	4			29			625	%
Net investment earnings	27			26			18			(27		)	32				219	%	19	%	27			32			19	%
Operating expenses	(15		)	(14		)	(15		)	(17		)	(20		)		(18	)%	(33	)%	(15		)	(20		)	(33	)%
Interest expense	(10		)	(11		)	(11		)	(12		)	(11		)		8	%	(10	)%	(10		)	(11		)	(10	)%
Pre-tax adjusted operating income	2			1			(8		)	(56		)	1				102	%	(50	)%	2			1			(50	)%
Income tax (expense) benefit – operating	—			—			—			—			—				—	%	—	%	—			—			—	%
Adjusted operating income (loss)	$	2		$	1		$	(8	)	$	(56	)	$	1			102	%	(50	)%	$	2		$	1		(50	)%
Note: Please refer to Notes to the Financial Supplement section and the Non-GAAP Measure Reconciliations for discussion on adjusted operating income and adjusted operating earnings per share. 1 Other liability costs primarily includes DAC, DSI and VOBA amortization and rider reserve changes for all products, the cost of liabilities on products other than deferred annuities and institutional costs including offsets for premiums, product charges and other revenues.

5

Reconciliation of Earnings Measures Unaudited (in millions, except percentages and per share data)
	Quarterly Trends																Δ				Year-to-Date						Δ
	1Q’18			2Q’18			3Q’18			4Q’18			1Q’19				Q/Q		Y/Y		2018			2019			Y/Y
RECONCILIATION OF NET INCOME TO ADJUSTED OPERATING INCOME
Net income (loss)	$	277		$	257		$	623		$	(104	)	$	708			781	%	156	%	$	277		$	708		156	%
Non-operating adjustments
Realized gains (losses) on sale of AFS securities	17			11			5			(20		)	12				160	%	(29	)%	17			12			(29	)%
Unrealized, impairmentsand other investment gains (losses)	6			10			6			(40		)	29				173	%	383	%	6			29			383	%
Change in fair value of reinsurance assets	(78		)	(129		)	(95		)	(100		)	616				716	%	890	%	(78		)	616			890	%
Offsets to investment gains (losses)	22			34			31			46			(199		)		(533	)%	(1,005	)%	22			(199		)	(1,005	)%
Investment gains (losses), net of offsets	(33		)	(74		)	(53		)	(114		)	458				502	%	1,488	%	(33		)	458			1,488	%
Change in fair values of derivatives and embedded derivatives – FIAs, net of offsets	86			68			376			(288		)	(27		)		91	%	(131	)%	86			(27		)	(131	)%
Integration, restructuring and other non-operating expenses	(8		)	(8		)	(2		)	(4		)	(1		)		75	%	88	%	(8		)	(1		)	88	%
Stock compensation expense	(3		)	(2		)	(3		)	(3		)	(3		)		—	%	—	%	(3		)	(3		)	—	%
Income tax (expense) benefit – non-operating	(6		)	(15		)	(66		)	65			(6		)		(109	)%	—	%	(6		)	(6		)	—	%
Less: Total non-operating adjustments	36			(31		)	252			(344		)	421				222	%	1,069	%	36			421			1,069	%
Adjusted operating income	$	241		$	288		$	371		$	240		$	287			20	%	19	%	$	241		$	287		19	%
RECONCILIATION OF BASIC EARNINGS PER CLASS A SHARES TO ADJUSTED OPERATING EARNINGS PER SHARE
Basic earnings per share – Class A common shares	$	1.40		$	1.30		$	3.16		$	(0.53	)	$	3.65			789	%	161	%	$	1.40		$	3.65		161	%
Non-operating adjustments
Realized gains (losses) on sale of AFS securities	0.09			0.05			0.02			(0.11		)	0.06				155	%	(33	)%	0.09			0.06			(33	)%
Unrealized, impairmentsand other investment gains (losses)	0.03			0.05			0.03			(0.20		)	0.16				180	%	433	%	0.03			0.16			433	%
Change in fair value of reinsurance assets	(0.40		)	(0.66		)	(0.49		)	(0.51		)	3.20				727	%	900	%	(0.40		)	3.20			900	%
Offsets to investment gains (losses)	0.11			0.18			0.15			0.23			(1.04		)		(552	)%	(1,045	)%	0.11			(1.04		)	(1,045	)%
Investment gains (losses), net of offsets	(0.17		)	(0.38		)	(0.29		)	(0.59		)	2.38				503	%	1,500	%	(0.17		)	2.38			1,500	%
Change in fair values of derivatives and embedded derivatives – FIAs, net of offsets	0.44			0.35			1.91			(1.47		)	(0.14		)		90	%	(132	)%	0.44			(0.14		)	(132	)%
Integration, restructuring and other non-operating expenses	(0.04		)	(0.05		)	(0.02		)	(0.02		)	(0.01		)	��	50	%	75	%	(0.04		)	(0.01		)	75	%
Stock compensation expense	(0.01		)	(0.02		)	(0.01		)	(0.01		)	(0.01		)		—	%	—	%	(0.01		)	(0.01		)	—	%
Income tax (expense) benefit – non-operating	(0.03		)	(0.08		)	(0.34		)	0.33			(0.03		)		(109	)%	—	%	(0.03		)	(0.03		)	—	%
Less: Total non-operating adjustments	0.19			(0.18		)	1.25			(1.76		)	2.19				224	%	1,053	%	0.19			2.19			1,053	%
Effect of items convertible to or settled in Class A common shares	(0.02		)	0.01			0.01			—			(0.04		)		(100	)%	(100	)%	(0.02		)	(0.04		)	(100	)%
Adjusted operating earnings per share	$	1.23		$	1.47		$	1.90		$	1.23		$	1.50			22	%	22	%	$	1.23		$	1.50		22	%
Note: Please refer to Notes to the Financial Supplement section for discussion on adjusted operating income.

6

Retirement Services Segment Highlights Unaudited (in millions, except percentages)
	Quarterly Trends															Δ				Year-to-Date						Δ
	1Q’18			2Q’18			3Q’18			4Q’18			1Q’19			Q/Q		Y/Y		2018			2019			Y/Y
NET INVESTMENT SPREAD – RETIREMENT SERVICES
Net investment earned rate	4.63		%	4.74		%	4.55		%	4.57		%	4.21		%	(36)bps		(42)bps		4.63		%	4.21		%	(42)bps
Cost of crediting	1.72		%	1.78		%	1.86		%	1.91		%	1.92		%	1bps		20bps		1.72		%	1.92		%	20bps
Other liability costs	1.12		%	1.06		%	0.91		%	1.23		%	0.93		%	(30)bps		(19)bps		1.12		%	0.93		%	(19)bps
Cost of funds	2.84		%	2.84		%	2.77		%	3.14		%	2.85		%	(29)bps		1bps		2.84		%	2.85		%	1bps
Net investment spread	1.79		%	1.90		%	1.78		%	1.43		%	1.36		%	(7)bps		(43)bps		1.79		%	1.36		%	(43)bps
Average invested assets	$	74,735		$	82,879		$	97,500		$	107,939		$	111,443		3	%	49	%	$	74,735		$	111,443		49	%
COST OF CREDITING – RETIREMENT SERVICES
FIA option costs	$	155		$	186		$	235		$	261		$	265		2	%	71	%	$	155		$	265		71	%
Fixed interest credited to policyholders	120			132			160			182			179			(2	)%	49	%	120			179			49	%
Cost of crediting on deferred annuities	275			318			395			443			444			—	%	61	%	275			444			61	%
Average account value on deferred annuities	58,993			66,241			79,673			88,874			89,809			1	%	52	%	58,993			89,809			52	%
Cost of crediting on deferred annuities rate	1.87		%	1.92		%	1.98		%	2.00		%	1.98		%	(2)bps		11bps		1.87		%	1.98		%	11bps
Cost of crediting on institutional products	$	47		$	50		$	58		$	73		$	91		25	%	94	%	$	47		$	91		94	%
Average institutional reserve liabilities	5,955			6,341			6,608			7,827			9,809			25	%	65	%	5,955			9,809			65	%
Cost of crediting on institutional products rate	3.14		%	3.16		%	3.54		%	3.74		%	3.69		%	(5)bps		55bps		3.14		%	3.69		%	55bps
Cost of crediting	$	322		$	368		$	453		$	516		$	535		4	%	66	%	$	322		$	535		66	%
OTHER LIABILITY COSTS – RETIREMENT SERVICES
Change in rider reserve	$	110		$	84		$	248		$	173		$	154		(11	)%	40	%	$	110		$	154		40	%
DAC, DSI and VOBA amortization	85			101			(44		)	130			91			(30	)%	7	%	85			91			7	%
Other1	13			35			17			29			15			(48	)%	15	%	13			15			15	%
Other liability costs	$	208		$	220		$	221		$	332		$	260		(22	)%	25	%	$	208		$	260		25	%
INVESTMENT MARGIN ON DEFERRED ANNUITIES – RETIREMENT SERVICES
Net investment earned rate	4.63		%	4.74		%	4.55		%	4.57		%	4.21		%	(36)bps		(42)bps		4.63		%	4.21		%	(42)bps
Cost of crediting on deferred annuities	1.87		%	1.92		%	1.98		%	2.00		%	1.98		%	(2)bps		11bps		1.87		%	1.98		%	11bps
Investment margin on deferred annuities	2.76		%	2.82		%	2.57		%	2.57		%	2.23		%	(34)bps		(53)bps		2.76		%	2.23		%	(53)bps
Note: Please refer to Notes to the Financial Supplement section and the Non-GAAP Reconciliations for discussion on net investment spread, investment margin on deferred annuities, net investment earned rate, and cost of crediting on deferred annuities. 1 Other primarily includes payout annuities, policy maintenance costs, reinsurance expense allowances, excise taxes and non-deferred acquisition costs, net of product charges.

7

Condensed Consolidated Balance Sheets Unaudited (in millions, except percentages)
	December 31, 2018		March 31, 2019		Δ
ASSETS
Investments
Available-for-sale securities, at fair value	$	59,265	$	64,655	9	%
Trading securities, at fair value	1,949		2,256		16	%
Equity securities, at fair value	216		252		17	%
Mortgage loans, net of allowances	10,340		11,042		7	%
Investment funds	703		683		(3	)%
Policy loans	488		487		—	%
Funds withheld at interest	15,023		15,241		1	%
Derivative assets	1,043		1,920		84	%
Short-term investments, at fair value	191		155		(19	)%
Other investments	122		121		(1	)%
Total investments	89,340		96,812		8	%
Cash and cash equivalents	2,911		3,021		4	%
Restricted cash	492		497		1	%
Investments in related parties
Available-for-sale securities, at fair value	1,437		1,684		17	%
Trading securities, at fair value	249		239		(4	)%
Equity securities, at fair value	120		301		151	%
Mortgage loans	291		291		—	%
Investment funds	2,232		2,290		3	%
Funds withheld at interest	13,577		13,683		1	%
Other investments	386		387		—	%
Accrued investment income	682		751		10	%
Reinsurance recoverable	5,534		5,647		2	%
Deferred acquisition costs, deferred sales inducements and value of business acquired	5,907		5,619		(5	)%
Other assets	1,635		962		(41	)%
Assets of consolidated variable interest entities
Investments
Trading securities, at fair value – related party	35		34		(3	)%
Equity securities, at fair value – related party	50		6		(88	)%
Investment funds	624		619		(1	)%
Cash and cash equivalents	2		2		—	%
Other assets	1		12		1,100	%
Total assets	$	125,505	$	132,857	6	%

8

Condensed Consolidated Balance Sheets, continued Unaudited (in millions, except percentages)
	December 31, 2018			March 31, 2019		Δ
LIABILITIES
Interest sensitive contract liabilities	$	96,610		$	98,452	2	%
Future policy benefits	16,704			19,016		14	%
Other policy claims and benefits	142			162		14	%
Dividends payable to policyholders	118			118		—	%
Long-term debt	991			991		—	%
Derivative liabilities	85			85		—	%
Payables for collateral on derivatives	969			1,781		84	%
Funds withheld liability	721			724		—	%
Other liabilities	888			1,410		59	%
Liabilities of consolidated variable interest entities	1			1		—	%
Total liabilities	$	117,229		$	122,740	5	%
EQUITY
Common stock	$	—		$	—	—	%
Additional paid-in-capital	3,462			3,448		—	%
Retained earnings	5,286			5,963		13	%
Accumulated other comprehensive income (loss)	(472		)	706		250	%
Total shareholders’ equity	8,276			10,117		22	%
Total liabilities and equity	$	125,505		$	132,857	6	%

9

Investments (GAAP view) Unaudited (in millions, except percentages)
	December 31, 2018				March 31, 2019
	Carrying Value		Percent of Total		Carrying Value		Percent of Total
INVESTMENTS AND INVESTMENTS IN RELATED PARTIES SUMMARY
Investments
Available-for-sale securities, at fair value
U.S. government and agencies	$	57	0.1	%	$	50	0.0	%
U.S. state, municipal and political subdivisions	1,293		1.2	%	1,365		1.2	%
Foreign governments	161		0.1	%	271		0.2	%
Corporate	37,097		34.4	%	41,411		35.8	%
CLO	5,361		5.0	%	6,142		5.3	%
ABS	4,920		4.6	%	5,075		4.4	%
CMBS	2,357		2.2	%	2,424		2.1	%
RMBS	8,019		7.5	%	7,917		6.9	%
Total available-for-sale securities, at fair value	59,265		55.1	%	64,655		55.9	%
Trading securities, at fair value	1,949		1.8	%	2,256		2.0	%
Equity securities, at fair value	216		0.2	%	252		0.2	%
Mortgage loans, net of allowances	10,340		9.6	%	11,042		9.5	%
Investment funds	703		0.6	%	683		0.6	%
Policy loans	488		0.4	%	487		0.4	%
Funds withheld at interest	15,023		14.0	%	15,241		13.2	%
Derivative assets	1,043		1.0	%	1,920		1.7	%
Short-term investments, at fair value	191		0.2	%	155		0.1	%
Other investments	122		0.1	%	121		0.1	%
Total investments	89,340		83.0	%	96,812		83.7	%
Investment in related parties
Available-for-sale securities, at fair value	1,437		1.3	%	1,684		1.5	%
Trading securities, at fair value	249		0.2	%	239		0.2	%
Equity securities, at fair value	120		0.1	%	301		0.3	%
Mortgage loans	291		0.3	%	291		0.2	%
Investment funds	2,232		2.1	%	2,290		2.0	%
Funds withheld at interest	13,577		12.6	%	13,683		11.8	%
Other investments	386		0.4	%	387		0.3	%
Total investments in related parties	18,292		17.0	%	18,875		16.3	%
Total investments including related parties	$	107,632	100.0	%	$	115,687	100.0	%

10

Invested Assets (Management view) Unaudited (in millions, except percentages)
	December 31, 2018				March 31, 2019
	Invested Asset Value1		Percent of Total		Invested Asset Value1		Percent of Total
INVESTED ASSETS
Corporate	$	55,772	50.2	%	$	57,142	50.2	%
CLO	8,275		7.5	%	9,192		8.1	%
Credit	64,047		57.7	%	66,334		58.3	%
RMBS	9,814		8.9	%	9,636		8.5	%
Mortgage loans	14,423		13.0	%	15,207		13.3	%
CMBS	3,018		2.7	%	3,046		2.7	%
Real estate	27,255		24.6	%	27,889		24.5	%
ABS	7,706		6.9	%	8,294		7.3	%
Alternative investments	4,492		4.1	%	4,390		3.9	%
State, municipal, political subdivisions and foreign government	2,122		1.9	%	2,256		2.0	%
Equity securities	467		0.4	%	832		0.7	%
Short-term investments	765		0.7	%	613		0.5	%
U.S. government and agencies	134		0.1	%	102		0.1	%
Other investments	15,686		14.1	%	16,487		14.5	%
Cash and equivalents	2,881		2.6	%	1,853		1.6	%
Policy loans and other	1,165		1.0	%	1,208		1.1	%
Total invested assets	$	111,034	100.0	%	$	113,771	100.0	%
1 Please refer to Notes to the Financial Supplement for discussion on invested assets including alternative investments and Non-GAAP Measure Reconciliations for the reconciliation of investments including related parties to invested assets.

11

Investment Funds (GAAP view) Unaudited (in millions, except percentages)
	December 31, 2018				March 31, 2019
	Carrying Value		Percent of Total		Carrying Value		Percent of Total
INVESTMENT FUNDS INCLUDING RELATED PARTIES1
Investment funds
Real estate	$	215	6.0	%	$	224	6.2	%
Credit funds	172		4.8	%	155		4.3	%
Private equity	253		7.1	%	239		6.7	%
Real assets	56		1.6	%	64		1.8	%
Natural resources	4		0.1	%	1		0.0	%
Other	3		0.1	%	—		—	%
Total investment funds	703		19.7	%	683		19.0	%
Investment funds – related parties
Differentiated investments
AmeriHome	463		13.0	%	436		12.1	%
Catalina	233		6.5	%	232		6.5	%
Athora	105		3.0	%	124		3.5	%
Venerable	92		2.6	%	87		2.4	%
Other	162		4.6	%	171		4.8	%
Total differentiated investments	1,055		29.7	%	1,050		29.3	%
Real estate	506		14.2	%	498		13.9	%
Credit funds	341		9.6	%	340		9.5	%
Private equity	18		0.5	%	52		1.4	%
Real assets	145		4.1	%	144		4.0	%
Natural resources	104		2.9	%	123		3.4	%
Public equities	63		1.8	%	83		2.3	%
Total investment funds – related parties	2,232		62.8	%	2,290		63.8	%
Investment funds – assets of consolidated VIEs
Private equity – MidCap	552		15.5	%	550		15.3	%
Credit funds	1		0.0	%	1		0.0	%
Real estate	30		0.8	%	29		0.8	%
Real assets	41		1.2	%	39		1.1	%
Total investment funds – assets of consolidated VIEs	624		17.5	%	619		17.2	%
Total investment funds including related parties and funds owned by consolidated VIEs	$	3,559	100.0	%	$	3,592	100.0	%
1 Investment funds, including related parties and investment funds of consolidated VIE’s, is the GAAP measure which does not include investments that we view as alternative investments. Alternative investments include CLO equity tranche securities that are included in trading securities in the GAAP view, investment funds included in our funds withheld at interest reinsurance portfolios, net assets of VIEs other than investment funds as well as royalties and other investments. Please refer to Notes to the Financial Supplement section for discussion on invested assets including alternative investments and the Non-GAAP Measure Reconciliations section for the reconciliation of investment funds to alternative investments.

12

Alternative Investments (Management view) Unaudited (in millions, except percentages)
	December 31, 2018				March 31, 2019
	Invested Asset Value1		Percent of Total		Invested Asset Value1		Percent of Total
ALTERNATIVE INVESTMENTS
Retirement Services
Differentiated investments
AmeriHome	$	568	12.6	%	$	535	12.2	%
MidCap	552		12.3	%	550		12.5	%
Catalina	232		5.2	%	232		5.3	%
Venerable	92		2.1	%	87		2.0	%
Other	195		4.3	%	207		4.7	%
Total differentiated investments	1,639		36.5	%	1,611		36.7	%
Real estate	1,024		22.8	%	955		21.8	%
Credit	563		12.5	%	550		12.5	%
Private equity	279		6.2	%	309		7.0	%
Real assets	276		6.2	%	283		6.4	%
Natural resources	55		1.2	%	55		1.3	%
Other	4		0.1	%	2		0.0	%
Total Retirement Services	3,840		85.5	%	3,765		85.7	%
Corporate & Other
Athora	130		2.9	%	131		3.0	%
Credit	203		4.5	%	194		4.4	%
Natural resources	213		4.8	%	215		4.9	%
Public equities2	100		2.2	%	83		1.9	%
Other	6		0.1	%	2		0.1	%
Total Corporate & Other	652		14.5	%	625		14.3	%
Total alternative investments1	$	4,492	100.0	%	$	4,390	100.0	%
1 Alternative investments does not correspond to the total investment funds, including related parties and VIEs, on our condensed consolidated balance sheets. Alternative investments adjusts the GAAP presentation to include CLO equity tranche securities that are included in trading securities in the GAAP view, investment funds included in our funds withheld at interest reinsurance portfolios, net assets of VIEs other than investment funds, as well as royalties and other investments. Please refer to Notes to the Financial Supplement section for discussion on invested assets including alternative investments and the Non-GAAP Measure Reconciliations section for the reconciliation of investment funds, including related parties and VIEs to alternative investments.
2 Public Equities include: Caesars Entertainment (Ticker: CZR) - 0.0 million and 5.5 million of shares as of March 31, 2019 and December 31, 2018; OneMain Financial (OMF) - 2.8 million and 2.8 million of shares, respectively, as of March 31, 2019 and December 31, 2018.

13

Funds Withheld at Interest (GAAP view) Unaudited (in millions, except percentages)
	December 31, 2018					March 31, 2019
	Carrying Value			Percent of Total		Carrying Value			Percent of Total
FUNDS WITHHELD AT INTEREST INCLUDING RELATED PARTIES
Fixed maturity securities
U.S. government and agencies	$	77		0.3	%	$	55		0.2	%
U.S. state, municipal and political subdivisions	563			2.0	%	556			1.9	%
Foreign governments	145			0.5	%	179			0.6	%
Corporate	16,267			56.9	%	15,787			54.6	%
CLO	1,990			7.0	%	2,420			8.4	%
ABS	1,601			5.6	%	2,023			7.0	%
CMBS	575			2.0	%	615			2.1	%
RMBS	1,876			6.6	%	1,924			6.7	%
Total fixed maturity securities	23,094			80.9	%	23,559			81.5	%
Equity securities	66			0.2	%	242			0.8	%
Mortgage loans	3,815			13.3	%	3,929			13.6	%
Investment funds	660			2.3	%	591			2.0	%
Derivative assets	77			0.3	%	174			0.6	%
Short-term investments	641			2.2	%	514			1.8	%
Cash and cash equivalents	455			1.6	%	373			1.3	%
Other assets and liabilities	(208		)	(0.8	)%	(458		)	(1.6	)%
Total funds withheld at interest including related parties1	$	28,600		100.0	%	$	28,924		100.0	%
1 Funds withheld at interest represents a receivable for amounts contractually withheld by ceding companies in accordance with modco and funds withheld reinsurance agreements in which we act as the reinsurer. In managing our business we utilize invested assets, were we adjust the presentation for funds withheld and modco transactions to include or exclude the underlying investments based upon the contractual transfer of economic exposure to such underlying investments.

14

Net Investment Earned Rates (NIER) Unaudited (In millions, except percentages)
	Quarterly Trends																Δ				Year-to-Date						Δ
	1Q’18			2Q’18				3Q’18			4Q’18			1Q’19			Q/Q		Y/Y		2018			2019			Y/Y
NIER – CONSOLIDATED
Fixed income and other investments	4.32		%	4.49		%		4.33		%	4.35		%	4.28		%	(7)bps		(4)bps		4.32		%	4.28		%	(4)bps
Alternative investments	10.38		%	9.37		%		9.13		%	5.81		%	4.36		%	(145)bps		(602)bps		10.38		%	4.36		%	(602)bps
Total net investment earned rate	4.60		%	4.71		%		4.52		%	4.40		%	4.28		%	(12)bps		(32)bps		4.60		%	4.28		%	(32)bps
NIER SUMMARY – RETIREMENT SERVICES
Fixed income and other investments	4.32		%	4.49		%		4.33		%	4.35		%	4.28		%	(7)bps		(4)bps		4.32		%	4.28		%	(4)bps
Alternative investments	12.34		%	11.28		%		10.65		%	11.00		%	2.13		%	(887)bps		(1,021)bps		12.34		%	2.13		%	(1,021)bps
Total net investment earned rate	4.63		%	4.74		%		4.55		%	4.57		%	4.21		%	(36)bps		(42)bps		4.63		%	4.21		%	(42)bps
Fixed income and other investment income	$	775		$	897			$	1,021		$	1,132		$	1,151		2	%	49	%	$	775		$	1,151		49	%
Alternatives investment income	91			86				87			99			20			(80	)%	(78	)%	91			20			(78	)%
Total net investment earnings	$	866		$	983			$	1,108		$	1,231		$	1,171		(5	)%	35	%	$	866		$	1,171		35	%
Fixed income and other investments	$	71,778		$	79,847			$	94,227		$	104,342		$	107,641		3	%	50	%	$	71,778		$	107,641		50	%
Alternatives investments	2,957			3,032				3,273			3,597			3,802			6	%	29	%	2,957			3,802			29	%
Total average invested assets	$	74,735		$	82,879			$	97,500		$	107,939		$	111,443		3	%	49	%	$	74,735		$	111,443		49	%
NIER SUMMARY – CORPORATE & OTHER
Fixed income and other investments	4.32		%	4.51		%		4.33		%	4.34		%	4.28		%	(6)bps		(4)bps		4.32		%	4.28		%	(4)bps
Alternative investments	2.02		%	1.34		%		1.81		%	(22.46		)%	17.66		%	4,012bps		1,564bps		2.02		%	17.66		%	1,564bps
Total net investment earned rate	3.76		%	3.71		%		3.51		%	(7.57		)%	13.19		%	2,076bps		943bps		3.76		%	13.19		%	943bps
Fixed income and other investment income	$	23		$	24			$	15		$	10		$	3		(70	)%	(87	)%	$	23		$	3		(87	)%
Alternatives investment income	4			2				3			(37		)	29			178	%	625	%	4			29			625	%
Total net investment earnings	$	27		$	26			$	18		$	(27	)	$	32		219	%	19	%	$	27		$	32		19	%
Fixed income and other investments	$	2,148		$	2,130			$	1,422		$	824		$	320		(61	)%	(85	)%	$	2,148		$	320		(85	)%
Alternatives investments	696			718				681			660			639			(3	)%	(8	)%	696			639			(8	)%
Total average invested assets	$	2,844		$	2,848			$	2,103		$	1,484		$	959		(35	)%	(66	)%	$	2,844		$	959		(66	)%
Note: Please refer to Note to the Financial Supplement section and the Non-GAAP Measure Reconciliations for discussion on net investment earned rate. The investment results above are presented net of investment management fees.

15

Net Investment Earned Rates (NIER), continued Unaudited (in millions, except percentages)
	Quarterly Trends											Δ		Year-to-Date				Δ
	1Q’18		2Q’18			3Q’18		4Q’18		1Q’19		Q/Q	Y/Y	2018		2019		Y/Y
NIER BY ASSET CLASS
Corporate securities	3.90	%	3.97	%		3.88	%	3.99	%	3.93	%	(6)bps	3bps	3.90	%	3.93	%	3bps
Structured securities
RMBS	5.42	%	5.87	%		6.04	%	6.03	%	6.03	%	0bps	61bps	5.42	%	6.03	%	61bps
CLO	5.09	%	5.09	%		4.95	%	4.69	%	4.76	%	7bps	(33)bps	5.09	%	4.76	%	(33)bps
ABS	4.03	%	4.95	%		4.59	%	4.55	%	3.95	%	(60)bps	(8)bps	4.03	%	3.95	%	(8)bps
CMBS	4.16	%	4.64	%		4.24	%	4.18	%	4.16	%	(2)bps	0bps	4.16	%	4.16	%	0bps
Total structured securities	4.91	%	5.33	%		5.19	%	5.07	%	4.90	%	(17)bps	(1)bps	4.91	%	4.90	%	(1)bps
State, municipal, political subdivisions and U.S. and foreign government	4.72	%	4.63	%		4.02	%	4.19	%	4.27	%	8bps	(45)bps	4.72	%	4.27	%	(45)bps
Mortgage loans	5.57	%	5.63	%		4.97	%	4.99	%	4.91	%	(8)bps	(66)bps	5.57	%	4.91	%	(66)bps
Alternative investments	10.38	%	9.37	%		9.13	%	5.81	%	4.36	%	(145)bps	(602)bps	10.38	%	4.36	%	(602)bps
Other U.S. and Bermuda invested assets	2.14	%	2.27	%		2.55	%	2.45	%	2.70	%	25bps	56bps	2.14	%	2.70	%	56bps
Consolidated net investment earned rate	4.60	%	4.71	%		4.52	%	4.40	%	4.28	%	(12)bps	(32)bps	4.60	%	4.28	%	(32)bps
Note: Please refer to Note to the Financial Supplement section and the Non-GAAP Measure Reconciliations for discussion on net investment earned rate. The investment results above are presented net of investment management fees.

16

Credit Quality of Securities Unaudited (in millions, except percentages)
	December 31, 2018				March 31, 2019
CREDIT QUALITY OF AFS SECURITIES (GAAP VIEW)	Fair Value		Percent of Total		Fair Value		Percent of Total
NAIC designation
1	$	31,311	51.6	%	$	34,021	51.3	%
2	25,871		42.6	%	28,659		43.2	%
Total investment grade	57,182		94.2	%	62,680		94.5	%
3	2,746		4.5	%	2,711		4.1	%
4	533		0.9	%	689		1.0	%
5	232		0.4	%	248		0.4	%
6	9		0.0	%	11		0.0	%
Total below investment grade	3,520		5.8	%	3,659		5.5	%
Total AFS securities including related parties	$	60,702	100.0	%	$	66,339	100.0	%
NRSRO designation
AAA/AA/A	$	19,690	32.4	%	$	22,804	34.3	%
BBB	23,326		38.4	%	25,773		38.9	%
Non-rated1	9,624		15.9	%	9,723		14.7	%
Total investment grade2	52,640		86.7	%	58,300		87.9	%
BB	2,670		4.4	%	2,729		4.1	%
B	875		1.4	%	888		1.3	%
CCC	2,340		3.9	%	2,253		3.4	%
CC and lower	1,296		2.1	%	1,320		2.0	%
Non-rated1	881		1.5	%	849		1.3	%
Total below investment grade	8,062		13.3	%	8,039		12.1	%
Total AFS securities including related parties	$	60,702	100.0	%	$	66,339	100.0	%
	Invested Asset Value3		% NAIC 1 or 2		Invested Asset Value3		% NAIC 1 or 2
SUMMARY OF NAIC 1 & 2 DESIGNATIONS BY ASSET CLASS (MANAGEMENT VIEW)
Corporate securities	$	52,496	93.8	%	$	53,761	93.1	%
RMBS	9,410		96.0	%	9,210		95.6	%
CLO	7,823		94.5	%	9,007		98.0	%
ABS	7,146		92.8	%	7,542		90.9	%
CMBS	2,797		92.7	%	2,828		92.8	%
Total structured securities	27,176		94.3	%	28,587		93.8	%
State, municipal, political subdivisions and U.S. and foreign government	2,233		99.0	%	2,334		99.0	%
Short-term investments	775		100.0	%	613		100.0	%
Total NAIC 1 & 2 Designations	$	82,680			$	85,295
1 Securities denoted as non-rated by the NRSRO were classified as investment or non-investment grade according to the security’s respective NAIC designation. 2 We view the NAIC designation methodology as the most appropriate way to view our AFS portfolio when evaluating credit risk since a large portion of our holdings were purchased at a significant discount to par. NRSRO ratings methodology is focused on the likelihood of recovery of all contractual payments, including principal at par regardless of entry price, while the NAIC designation methodology considers our investment and amortized cost, and the likelihood of recovery of that book value as opposed to the likelihood of the recovery of all contractual payments. 3 Please refer to Notes to the Financial Supplement section for discussion on invested assets and Non-GAAP Measure Reconciliations section for the reconciliation of AFS to invested assets.

17

Credit Quality of Invested Assets (Management view) Unaudited (In millions, except percentages)
	December 31, 2018				March 31, 2019					December 31, 2018				March 31, 2019
	Inv. Asset Value1		% of Total		Inv. Asset Value1		% of Total			Inv. Asset Value1		% of Total		Inv. Asset Value1		% of Total
CREDIT QUALITY OF INVESTED ASSETS									CREDIT QUALITY OF INVESTED ASSETS
NAIC designation									NRSRO designation
1	$	45,287	51.7	%	$	46,658	51.7	%	AAA/AA/A	$	30,630	35.0	%	$	32,717	36.2	%
2	37,393		42.7	%	38,637		42.8	%	BBB	33,289		38.0	%	34,530		38.2	%
Non-rated3	—		—	%	—		—	%	Non-rated3	13,522		15.4	%	13,148		14.6	%
Total investment grade	82,680		94.4	%	85,295		94.5	%	Total investment grade	77,441		88.4	%	80,395		89.0	%
3	3,659		4.2	%	3,537		3.9	%	BB	3,587		4.1	%	3,507		3.9	%
4	930		1.1	%	1,082		1.2	%	B	1,316		1.5	%	1,308		1.4	%
5	315		0.3	%	342		0.4	%	CCC	2,610		3.0	%	2,509		2.8	%
6	22		0.0	%	25		0.0	%	CC and lower	1,412		1.6	%	1,414		1.6	%
Non-rated3	—		—	%	—		—	%	Non-rated3	1,240		1.4	%	1,148		1.3	%
Total below investment grade	4,926		5.6	%	4,986		5.5	%	Total below investment grade	10,165		11.6	%	9,886		11.0	%
Total NAIC designated assets2	87,606		100.0	%	90,281		100.0	%	Total NRSRO designated assets2	87,606		100.0	%	90,281		100.0	%
Assets without NAIC designation									Assets without NRSRO designation
Commercial mortgage loans									Commercial mortgage loans
CM1	4,276		39.3	%	4,172		36.0	%	CM1	4,276		39.3	%	4,172		36.0	%
CM2	4,184		38.4	%	4,575		39.5	%	CM2	4,184		38.4	%	4,575		39.5	%
CM3	1,894		17.4	%	2,264		19.6	%	CM3	1,894		17.4	%	2,264		19.6	%
CM4	393		3.6	%	433		3.7	%	CM4	393		3.6	%	433		3.7	%
CM5	138		1.3	%	138		1.2	%	CM5	138		1.3	%	138		1.2	%
CM6	—		—	%	—		—	%	CM6	—		—	%	—		—	%
CM7	—		—	%	—		—	%	CM7	—		—	%	—		—	%
Total CMLs	10,885		100.0	%	11,582		100.0	%	Total CMLs	10,885		100.0	%	11,582		100.0	%
Residential mortgage loans									Residential mortgage loans
In good standing	3,490		98.7	%	3,569		98.5	%	In good standing	3,490		98.7	%	3,569		98.5	%
90 days late	33		0.9	%	36		1.0	%	90 days late	33		0.9	%	36		1.0	%
In foreclosure	15		0.4	%	20		0.5	%	In foreclosure	15		0.4	%	20		0.5	%
Total RMLs	3,538		100.0	%	3,625		100.0	%	Total RMLs	3,538		100.0	%	3,625		100.0	%
Alternative investments	4,492				4,390				Alternative investments	4,492				4,390
Cash and equivalents	2,881				1,853				Cash and equivalents	2,881				1,853
Equity securities	467				832				Equity securities	467				832
Other4	1,165				1,208				Other4	1,165				1,208
Total invested assets	$	111,034			$	113,771			Total invested assets	$	111,034			$	113,771
1 Please refer to Notes to the Financial Supplement section for discussion on invested assets and Non-GAAP Measure Reconciliations section for the reconciliation of AFS to invested assets. 2  NAIC and NRSRO designations include corporates, CLO, RMBS, CMBS, ABS, state, municipal, political subdivisions and foreign government securities, short-term investments and U.S. government and agencies securities. 3 Securities denoted as non-rated by the NRSRO were classified as investment or non-investment grade according to the security’s respective NAIC designation. 4 Other includes equity securities, policy loans, accrued interest, and other invested assets.

18

Credit Quality of Invested Assets – RMBS, CLOs, ABS (Management view) Unaudited (In millions, except percentages)
	December 31, 2018				March 31, 2019					December 31, 2018				March 31, 2019
	Inv. Asset Value1		% of Total		Inv. Asset Value1		% of Total			Inv. Asset Value1		% of Total		Inv. Asset Value1		% of Total
CREDIT QUALITY OF RMBS – NAIC DESIGNATION									CREDIT QUALITY OF RMBS – NRSRO DESIGNATION
1	$	9,097	92.8	%	$	8,820	91.5	%	AAA/AA/A	$	1,129	11.5	%	$	1,109	11.5	%
2	313		3.2	%	390		4.1	%	BBB	314		3.2	%	462		4.8	%
Non-rated2	—		—	%	—		—	%	Non-rated2	3,337		34.0	%	3,273		34.0	%
Total investment grade	9,410		96.0	%	9,210		95.6	%	Total investment grade	4,780		48.7	%	4,844		50.3	%
3	248		2.5	%	252		2.6	%	BB	507		5.1	%	435		4.5	%
4	112		1.1	%	130		1.3	%	B	372		3.8	%	312		3.2	%
5	28		0.3	%	28		0.3	%	CCC	2,521		25.7	%	2,416		25.1	%
6	16		0.1	%	16		0.2	%	CC and lower	1,410		14.4	%	1,409		14.6	%
Non-rated2	—		—	%	—		—	%	Non-rated2	224		2.3	%	220		2.3	%
Total below investment grade	404		4.0	%	426		4.4	%	Total below investment grade	5,034		51.3	%	4,792		49.7	%
Total invested assets RMBS	$	9,814	100.0	%	$	9,636	100.0	%	Total invested assets RMBS	$	9,814	100.0	%	$	9,636	100.0	%
CREDIT QUALITY OF CLOs – NAIC DESIGNATION									CREDIT QUALITY OF CLOs – NRSRO DESIGNATION
1	$	4,666	56.4	%	$	5,132	55.8	%	AAA/AA/A	$	4,530	54.7	%	$	5,120	55.7	%
2	3,157		38.1	%	3,875		42.2	%	BBB	3,555		43.0	%	3,887		42.3	%
Total investment grade	7,823		94.5	%	9,007		98.0	%	Total investment grade	8,085		97.7	%	9,007		98.0	%
3	423		5.1	%	156		1.7	%	BB	161		1.9	%	156		1.7	%
4	22		0.3	%	22		0.2	%	B	29		0.4	%	22		0.2	%
5	7		0.1	%	7		0.1	%	CCC	—		—	%	7		0.1	%
6	—		—	%	—		—	%	CC and lower	—		—	%	—		—	%
Total below investment grade	452		5.5	%	185		2.0	%	Total below investment grade	190		2.3	%	185		2.0	%
Total invested assets CLOs	$	8,275	100.0	%	9,192		100.0	%	Total invested assets CLOs	$	8,275	100.0	%	9,192		100.0	%
CREDIT QUALITY OF ABS – NAIC DESIGNATION									CREDIT QUALITY OF ABS – NRSRO DESIGNATION
1	$	4,720	61.3	%	$	4,978	60.0	%	AAA/AA/A	$	3,319	43.1	%	$	3,838	46.3	%
2	2,426		31.5	%	2,564		30.9	%	BBB	1,948		25.3	%	1,939		23.4	%
Non-rated2	—		—	%	—		—	%	Non-rated2	1,661		21.5	%	1,764		21.2	%
Total investment grade	7,146		92.8	%	7,542		90.9	%	Total investment grade	6,928		89.9	%	7,541		90.9	%
3	369		4.8	%	485		5.9	%	BB	436		5.7	%	465		5.6	%
4	43		0.5	%	121		1.5	%	B	89		1.1	%	90		1.1	%
5	148		1.9	%	145		1.7	%	CCC	—		—	%	—		—	%
6	—		—	%	1		0.0	%	CC and lower	—		—	%	—		—	%
Non-rated2	—		—	%	—		—	%	Non-rated2	253		3.3	%	198		2.4	%
Total below investment grade	560		7.2	%	752		9.1	%	Total below investment grade	778		10.1	%	753		9.1	%
Total invested assets ABS	$	7,706	100.0	%	8,294		100.0	%	Total invested assets ABS	$	7,706	100.0	%	8,294		100.0	%
1 Please refer to Notes to the Financial Supplement section for discussion on invested assets and Non-GAAP Measure Reconciliations section for the reconciliation of investments including related parties to invested assets. 2 Securities denoted as non-rated by the NRSRO were classified as investment or non-investment grade according to the security’s respective NAIC designation.

19

Reserve Liabilities & Rollforwards Unaudited (in millions, except percentages)
	December 31, 2018					March 31, 2019
	Dollars		Percent of Total			Dollars		Percent of Total
RESERVE LIABILITIES
Fixed indexed annuities	$	73,224	68.0	%		$	74,950	67.0	%
Fixed rate annuities	17,802		16.5	%		18,267		16.4	%
Total deferred annuities	91,026		84.5	%		93,217		83.4	%
Payout annuities	6,009		5.6	%		5,976		5.3	%
Pension risk transfer annuities	4,710		4.4	%		6,589		5.9	%
Funding agreements	3,826		3.5	%		3,815		3.4	%
Life and other	2,161		2.0	%		2,194		2.0	%
Total reserve liabilities	$	107,732	100.0	%		$	111,791	100.0	%

	Quarterly Trends															Δ				Year-to-Date						Δ
	1Q’18			2Q’18			3Q’18			4Q’18			1Q’19			Q/Q		Y/Y		2018			2019			Y/Y
RESERVE LIABILITY ROLLFORWARD
Reserve liabilities – beginning	$	75,447		$	75,823		$	96,248		$	98,553		$	107,732		9	%	43	%	$	75,447		$	107,732		43	%
Deposits1	2,135			2,794			3,407			5,269			4,860			(8	)%	128	%	2,135			4,860			128	%
Acquisition and block reinsurance2	—			19,104			—			7,878			—			(100	)%	—	%	—			—			—	%
Withdrawals	(1,755		)	(1,812		)	(2,167		)	(3,125		)	(2,780		)	(11	)%	58	%	(1,755		)	(2,780		)	58	%
Other reserve changes	(4		)	339			1,065			(843		)	1,979			335	%	49,575	%	(4		)	1,979			49,575	%
Reserve liabilities – ending	$	75,823		$	96,248		$	98,553		$	107,732		$	111,791		4	%	47	%	$	75,823		$	111,791		47	%
DEFERRED ANNUITY ACCOUNT VALUE ROLLFORWARD3
Account value – beginning	$	58,539		$	59,447		$	78,848		$	80,499		$	89,435		11	%	53	%	$	58,539		$	89,435		53	%
Deposits1	1,516			2,529			2,783			3,110			2,800			(10	)%	85	%	1,516			2,800			85	%
Acquisition and block reinsurance2	—			17,721			—			7,815			—			(100	)%	—	%	—			—			—	%
Premium and interest bonuses	47			73			77			68			58			(15	)%	23	%	47			58			23	%
Fixed and index credits to policyholders	659			672			754			559			423			(24	)%	(36	)%	659			423			(36	)%
Surrenders and benefits paid	(1,238		)	(1,511		)	(1,867		)	(2,513		)	(2,431		)	(3	)%	96	%	(1,238		)	(2,431		)	96	%
Fee and product charges	(76		)	(83		)	(96		)	(103		)	(101		)	(2	)%	33	%	(76		)	(101		)	33	%
Account value – ending	$	59,447		$	78,848		$	80,499		$	89,435		$	90,184		1	%	52	%	$	59,447		$	90,184		52	%
INSTITUTIONAL RESERVE LIABILITY ROLLFORWARD (PENSION RISK TRANSFER AND FUNDING AGREEMENTS)
Reserve liabilities – beginning	$	6,038		$	6,311		$	6,426		$	6,862		$	8,536		24	%	41	%	$	6,038		$	8,536		41	%
Deposits	566			184			472			2,010			1,922			(4	)%	240	%	566			1,922			240	%
Withdrawals	(337		)	(111		)	(93		)	(405		)	(143		)	(65	)%	(58	)%	(337		)	(143		)	(58	)%
Other reserve changes	44			42			57			69			89			29	%	102	%	44			89			102	%
Reserve liabilities – ending	$	6,311		$	6,426		$	6,862		$	8,536		$	10,404		22	%	65	%	$	6,311		$	10,404		65	%
Note: Please refer to Notes to the Financial Supplement section and the Non-GAAP Measure Reconciliations for discussion on reserve liabilities. 1 Deposits equal deposits from our retail, flow reinsurance and institutional channels as well as premiums and deposits for life and products other than deferred annuities or our institutional products, renewal deposits on older blocks of business and annuitizations. 2 Acquisition and block reinsurance includes total reserves at inception. Q2 and Q4 2018 includes Voya and Lincoln block reinsurance, respectively. 3 The account value rollforwards on deferred annuities include our fixed rate and fixed indexed annuities and are net of ceded reinsurance activity.

20

Deferred Annuity Liability Characteristics Unaudited (in millions, except percentages)
	Surrender charge (gross)		Percent of total		Surrender charge (net of MVA)			Percent of total
SURRENDER CHARGE PERCENTAGES ON DEFERRED ANNUITIES ACCOUNT VALUE
No Surrender Charge	$	20,224	22.4	%	$	20,224		22.4	%
0.0% < 2.0%	786		0.9	%	1,156			1.3	%
2.0% < 4.0%	2,898		3.2	%	4,885			5.4	%
4.0% < 6.0%	8,056		8.9	%	8,942			9.9	%
6.0% or greater	58,220		64.6	%	54,977			61.0	%
	$	90,184	100.0	%	$	90,184		100.0	%
			Surrender charge (gross)		MVA benefit			Surrender charge (net)
Aggregate surrender charge protection			6.4	%	0.4		%	6.8	%

	Deferred annuities		Percent of total		Average surrender charge (gross)
YEARS OF SURRENDER CHARGE REMAINING ON DEFERRED ANNUITIES ACCOUNT VALUE
No Surrender Charge	$	20,224	22.4	%	—	%
Less than 2	14,121		15.7	%	5.0	%
2 to less than 4	17,627		19.5	%	7.0	%
4 to less than 6	13,758		15.3	%	8.3	%
6 to less than 8	9,685		10.7	%	9.8	%
8 to less than 10	11,042		12.3	%	10.8	%
10 or greater	3,727		4.1	%	14.3	%
	$	90,184	100.0	%

	At minimum guarantees		Total account value		Percent of total account value at minimum guarantees
MINIMUM GUARANTEES ON DEFERRED ANNUITIES
Fixed indexed annuities	$	17,432	$	72,173	24	%
Fixed rate annuities	8,096		18,011		45	%
Total deferred annuities	$	25,528	$	90,184	28	%
					March 31, 2019
Distance to guarantees1					100 – 110
1 The distance to guarantee reflects the average distance in option costs between the current and guaranteed rates for indexed strategies and between current and guaranteed fixed rates for fixed strategies. The option costs used reflects an estimate of option cost in the market.

	December 31, 2018			March 31, 2019			Δ
DEFERRED ANNUITY RIDER RESERVE SUMMARY
Rider reserve	$	3,025		$	3,407		13	%
Account value with rider reserves	36,445			36,633			1	%
Rider reserve as a percentage of account value with rider reserves	8.3		%	9.3		%	100bps

21

Capitalization & Regulatory Capital Ratios Unaudited (in millions, except percentages)
	Quarterly Trends															Δ
	1Q’18			2Q’18			3Q’18			4Q’18			1Q’19			Q/Q		Y/Y
CAPITALIZATION
Total debt	$	992		$	1,174		$	991		$	991		$	991		—	%	—	%
Total shareholders’ equity	8,687			8,462			8,978			8,276			10,117			22	%	16	%
Total capitalization	9,679			9,636			9,969			9,267			11,108			20	%	15	%
Less: Accumulated other comprehensive income (loss) (AOCI)	634			147			33			(472		)	706			250	%	11	%
Less: Accumulated change in fair value of reinsurance assets	107			12			(31		)	(75		)	309			512	%	189	%
Total adjusted capitalization	$	8,938		$	9,477		$	9,967		$	9,814		$	10,093		3	%	13	%
EQUITY CAPITALIZATION
Total shareholders’ equity	$	8,687		$	8,462		$	8,978		$	8,276		$	10,117		22	%	16	%
Less: AOCI	634			147			33			(472		)	706			250	%	11	%
Less: Accumulated change in fair value of reinsurance assets	107			12			(31		)	(75		)	309			512	%	189	%
Total adjusted shareholders’ equity	$	7,946		$	8,303		$	8,976		$	8,823		$	9,102		3	%	15	%
EQUITY CAPITALIZATION BY SEGMENT
Retirement Services	$	5,495		$	6,050		$	7,024		$	7,807		$	8,201		5	%	49	%
Corporate and Other	2,451			2,253			1,952			1,016			901			(11	)%	(63	)%
Total adjusted shareholders’ equity	$	7,946		$	8,303		$	8,976		$	8,823		$	9,102		3	%	15	%
FINANCIAL LEVERAGE
Debt to capital ratio	10.2		%	12.2		%	9.9		%	10.7		%	8.9		%	(177)bps		(128)bps
AOCI	0.8		%	0.2		%	0.0		%	(0.5		)%	0.6		%	114bps		(14)bps
Accumulated change in fair value of reinsurance assets	0.1		%	0.0		%	0.0		%	(0.1		)%	0.3		%	35bps		14bps
Adjusted debt to capital ratio1	11.1		%	12.4		%	9.9		%	10.1		%	9.8		%	(28)bps		(128)bps
1 Total debt in Q2 2018 includes a short-term borrowing of $183 million that was repaid in Q3 2018.

	December 31, 2017		December 31, 2018		Δ
REGULATORY CAPITAL RATIOS
U.S. RBC ratio – Athene Annuity & Life Assurance Company	490	%	421	%	(6,900)bps
BSCR – Athene Life Re Ltd.	354	%	340	%	(1,400)bps
Athene Life Re Ltd. RBC ratio1	562	%	405	%	(15,700)bps
1 ALRe RBC ratio, which is used in evaluating our capital position and the amount of capital needed to support our segment, is calculated by applying the NAIC RBC factors.

22

Financial Strength, Credit Ratings & Share Data Unaudited (in millions, except percentages)
	A.M. Best	Standard & Poor’s	Fitch
FINANCIAL STRENGTH RATINGS
Athene Annuity & Life Assurance Company	A	A	A
Athene Annuity and Life Company	A	A	A
Athene Annuity & Life Assurance Company of New York	A	A	A
Athene Life Insurance Company of New York	A	Not Rated	Not Rated
Athene Life Re Ltd.	A	A	A
CREDIT RATINGS
Athene Holding Ltd.	bbb	BBB+	BBB+
Senior notes	bbb	BBB+	BBB

	Quarterly Trends					Δ				Year-to-Date		Δ
	1Q’18	2Q’18	3Q’18	4Q’18	1Q’19	Q/Q		Y/Y		2018	2019	Y/Y
SHARE DATA
Weighted average shares outstanding – basic1	197.1	197.3	197.3	197.1	194.0	(2	)%	(2	)%	197.1	194.0	(2	)%
Weighted average shares outstanding – diluted – Class A common shares2	149.0	164.8	165.1	164.2	161.7	(2	)%	9	%	149.0	161.7	9	%
Weighted average shares outstanding – adjusted operating3	196.0	195.1	196.1	195.5	192.2	(2	)%	(2	)%	196.0	192.2	(2	)%
Common shares outstanding4	197.2	197.3	197.3	195.0	194.1	0	%	(2	)%	197.2	194.1	(2	)%
Adjusted operating common shares outstanding3	196.8	196.4	197.2	193.5	192.4	(1	)%	(2	)%	196.8	192.4	(2	)%
1 Basic earnings per share, including basic weighted average shares outstanding, includes all classes eligible to participate in dividends for each period presented. 2 Diluted earnings per share on a GAAP basis for Class A common shares, including diluted Class A weighted average shares outstanding, includes the dilutive impacts, if any, of Class B common shares, Class M common shares and any other stock-based awards. 3 Represents Class A common shares outstanding or weighted average common shares outstanding assuming conversion or settlement of all outstanding items that are able to be converted to or settled in Class A common shares, including the impacts of Class B common shares, Class M common shares and any other stock-based awards, but excluding any awards for which the exercise or conversion price exceeds the market value of our Class A common shares on the applicable measurement date. 4 Represents common shares outstanding for all classes eligible to participate in dividends for each period presented.

23

Notes to the Financial Supplement

KEY OPERATING AND NON-GAAP MEASURES

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

ADJUSTED OPERATING INCOME AND ADJUSTED OPERATING RETURN ON ASSETS (ROA)

Adjusted operating income is a non-GAAP measure used to evaluate our financial performance excluding market volatility and expenses related to integration, restructuring, stock compensation, and other expenses. Our adjusted operating income equals net income adjusted to eliminate the impact of the following (collectively, the “non-operating adjustments”):

• Investment Gains (Losses), Net of Offsets—Investment gains (losses), net of offsets, consist of the realized gains and losses on the sale of AFS securities, the change in fair value of reinsurance assets, unrealized gains and losses, impairments, and other investment gains and losses. Unrealized, impairments and other investment gains and losses are comprised of the fair value adjustments of trading securities (other than CLOs) and investments held under the fair value option, derivative gains and losses not hedging FIA index credits, and the net other-than-temporary impairment (OTTI) impacts recognized in operations net of the change in AmerUs Closed Block fair value reserve related to the corresponding change in fair value of investments and the change in unit-linked reserves related to the corresponding trading securities. Investment gains and losses are net of offsets related to DAC, DSI, and VOBA amortization and changes to guaranteed lifetime withdrawal benefit (GLWB) and guaranteed minimum death benefit (GMDB) reserves (together, GLWB and GMDB reserves represent rider reserves) as well as the MVAs associated with surrenders or terminations of contracts.

• Change in Fair Values of Derivatives and Embedded Derivatives – FIAs, Net of Offsets—Impacts related to the fair value accounting for derivatives hedging the FIA index credits and the related embedded derivative liability fluctuations from period to period. The index reserve is measured at fair value for the current period and all periods beyond the current policyholder index term. However, the FIA hedging derivatives are purchased to hedge only the current index period. Upon policyholder renewal at the end of the period, new FIA hedging derivatives are purchased to align with the new term. The difference in duration between the FIA hedging derivatives and the index credit reserves creates a timing difference in earnings. This timing difference of the FIA hedging derivatives and index credit reserves is included as a non-operating adjustment, net of offsets related to DAC, DSI, and VOBA amortization and changes to rider reserves. We primarily hedge with options that align with the index terms of our FIA products (typically 1–2 years). From an economic basis, we believe this is suitable because policyholder accounts are credited with index performance at the end of each index term. However, because the “value of an embedded derivative” in an FIA contract is longer-dated, there is a duration mismatch which may lead to mismatches for accounting purposes.

• Integration, Restructuring, and Other Non-operating Expenses—Integration, restructuring, and other non-operating expenses consist of restructuring and integration expenses related to acquisitions and block reinsurance costs as well as certain other expenses which are not related to our underlying profitability drivers or likely to re-occur in the foreseeable future.

• Stock Compensation Expense—Stock compensation expenses associated with our share incentive plans, excluding our long-term incentive plan, are not related to our underlying profitability drivers and fluctuate from time to time due to the structure of our plans.

• Bargain Purchase Gain—Bargain purchase gains associated with acquisitions are adjustments to net income as they are not related to our underlying profitability drivers.

• Income Tax (Expense) Benefit – Non-operating—The non-operating income tax expense represents the income tax effect of non-operating adjustments and is computed by applying the appropriate jurisdiction’s tax rate to the non-operating adjustments that are subject to income tax.

We consider these non-operating adjustments to be meaningful adjustments to net income for the reasons discussed in greater detail above. Accordingly, we believe using a measure which excludes the impact of these items is useful in analyzing our business performance and the trends in our results of operations. Together with net income, we believe adjusted operating income, provides a meaningful financial metric that helps investors understand our underlying results and profitability. Adjusted operating income should not be used as a substitute for net income.

Adjusted operating ROA is a non-GAAP measure used to evaluate our financial performance and profitability. Adjusted operating ROA is computed using our adjusted operating income divided by average invested assets for the relevant period. To enhance the ability to analyze these measures across periods, interim periods are annualized. While we believe each of these metrics are meaningful financial metrics and enhance our understanding of the underlying profitability drivers of our business, they should not be used as a substitute for ROA presented under GAAP.

ADJUSTED OPERATING ROE

Adjusted operating ROE is a non-GAAP measure used to evaluate our financial performance excluding the impacts of AOCI and the cumulative change in fair value of funds withheld and modco reinsurance assets, in each case net of DAC, DSI, rider reserve and tax offsets. Adjusted shareholders’ equity is calculated as the ending shareholders’ equity excluding AOCI and the cumulative change in fair value of funds withheld and modco reinsurance assets. Adjusted operating ROE is calculated as the adjusted operating income, divided by average adjusted shareholders’ equity. These adjustments fluctuate period to period in a manner inconsistent with our underlying profitability drivers as the majority of such fluctuation is related to the market volatility of the unrealized gains and losses associated with our AFS securities. Except with respect to reinvestment activity relating to acquired blocks of businesses, we typically buy and hold AFS investments to maturity throughout the duration of market fluctuations, therefore, the period-over-period impacts in unrealized gains and losses are not necessarily indicative of current operating fundamentals or future performance. Accordingly, we believe using measures which exclude AOCI and the cumulative change in fair value of funds withheld and modco reinsurance assets are useful in analyzing trends in our operating results. To enhance the ability to analyze these measures across periods, interim periods are annualized. Adjusted operating ROE should not be used as a substitute for ROE. However, we believe the adjustments to equity are significant to gaining an understanding of our overall financial performance.

ADJUSTED OPERATING EARNINGS PER SHARE, WEIGHTED AVERAGE SHARES OUTSTANDING – ADJUSTED OPERATING, AND ADJUSTED BOOK VALUE PER SHARE

Adjusted operating earnings per share, weighted average shares outstanding – adjusted operating and adjusted book value per share are non-GAAP measures used to evaluate our financial performance and financial condition. The non-GAAP measures adjust the number of shares included in the corresponding GAAP measures to reflect the conversion or settlement of all shares and other stock-based awards outstanding. We believe using these measures represents an economic view of our share counts and provides a simplified and consistent view of our outstanding shares. Adjusted operating earnings per share is calculated as the adjusted operating income, over the weighted average shares outstanding – adjusted operating. Adjusted book value per share is calculated as the adjusted shareholders’ equity divided by the adjusted operating common shares outstanding. Our Class B common shares are economically equivalent to Class A common shares and can be converted to Class A common shares on a one-for-one basis at any time. Our Class M common shares are in the legal form of shares but economically function as options as they are convertible into Class A shares after vesting and payment of the conversion price. In calculating Class A diluted earnings per share on a GAAP basis, we are required to apply sequencing rules to determine the dilutive impacts, if any, of our Class B common shares, Class M common shares and any other stock-based awards. To the extent our Class B common shares, Class M common shares and/or any other stock-based awards are not dilutive, after considering the dilutive effects of the more dilutive securities in the sequence, they are excluded. Weighted average shares outstanding – adjusted operating and adjusted operating common shares outstanding assume conversion or settlement of all outstanding items that are able to be converted to or settled in Class A common shares, including the impacts of Class B common shares on a one-for-one basis, the impacts of all Class M common shares net of the conversion price and any other stock-based awards, but excluding any awards for which the exercise or conversion price exceeds the market value of our Class A common shares on the applicable measurement date. For certain historical periods, Class M shares were not included due to issuance restrictions which were contingent upon our IPO. Adjusted operating earnings per share, weighted average shares outstanding – adjusted operating and adjusted book value per share should not be used as a substitute for basic earnings per share – Class A common shares, basic weighted average shares outstanding – Class A or book value per share. However, we believe the adjustments to the shares and equity are significant to gaining an understanding of our overall results of operations and financial condition.

24

Notes to the Financial Supplement

ADJUSTED DEBT TO CAPITAL RATIO

Adjusted debt to capital ratio is a non-GAAP measure used to evaluate our capital structure excluding the impacts of AOCI and the cumulative change in fair value of funds withheld and modco reinsurance assets, net of DAC, DSI, rider reserve and tax offsets. Adjusted debt to capital ratio is calculated as total debt excluding consolidated variable interest entities (VIEs) divided by adjusted shareholders’ equity. Adjusted debt to capital ratio should not be used as a substitute for the debt to capital ratio. However, we believe the adjustments to total debt and shareholders’ equity are significant to gaining an understanding of our capitalization, debt utilization, and debt capacity.

RETIREMENT SERVICES NET INVESTMENT SPREAD, INVESTMENT MARGIN ON DEFERRED ANNUITIES, AND OPERATING EXPENSES

Net investment spread is a key measurement of the financial health of our Retirement Services profitability. Net investment spread measures our investment performance less the total cost of our liabilities. Net investment earned rate is a key measure of our investment performance, while cost of funds is a key measure of the cost of our policyholder benefits and liabilities. Investment margin on our deferred annuities measures our investment performance less the cost of crediting for our deferred annuities, which make up a significant portion of our reserve liabilities.

• Net investment earned rate is a non-GAAP measure we use to evaluate the performance of our invested assets that does not correspond to GAAP net investment income. Net investment earned rate is computed as the income from our invested assets divided by the average invested assets for the relevant period. To enhance the ability to analyze these measures across periods, interim periods are annualized. The adjustments to arrive at our net investment earned rate add alternative investment gains and losses, gains and losses related to trading securities for CLOs, net VIE impacts (revenues, expenses and noncontrolling interest) and the change in fair value of reinsurance assets. We include the income and assets supporting our change in fair value of reinsurance assets by evaluating the underlying investments of the funds withheld at interest receivables and we include the net investment income from those underlying investments which does not correspond to the GAAP presentation of change in fair value of reinsurance assets. We exclude the income and assets supporting business that we have exited through ceded reinsurance including funds withheld agreements. We believe the adjustments for reinsurance provide a net investment earned rate on the assets for which we have economic exposure.

• Cost of funds includes liability costs related to cost of crediting on both deferred annuities and institutional products as well as other liability costs. Cost of funds is computed as the total liability costs divided by the average invested assets for the relevant period. To enhance the ability to analyze these measures across periods, interim periods are annualized.

◦ Cost of crediting includes the costs for both deferred annuities and institutional products. 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 PRT costs including interest credited, benefit payments and other reserve changes, net of premiums received when issued, as well as funding agreement costs including the interest payments and other reserve changes. Cost of crediting is computed as the cost of crediting for deferred annuities and institutional products divided by the average invested assets for the relevant periods. Cost of crediting on deferred annuities is computed as the interest credited on fixed strategies and option costs on indexed annuity strategies divided by the average account value of our deferred annuities. Cost of crediting on institutional products is computed as the PRT and funding agreement costs divided by the average institutional reserve liabilities. Our average invested assets, account values and institutional reserve liabilities are averaged over the number of quarters in the relevant period to obtain our associated cost of crediting for such period. To enhance the ability to analyze these measures across periods, interim periods are annualized.

◦ Other liability costs include DAC, DSI and VOBA amortization, change in rider reserves, the cost of liabilities on products other than deferred annuities and institutional products, excise taxes, premiums, product charges and other revenues. We believe a measure like other liability costs is useful in analyzing the trends of our core business operations and profitability. While we believe other liability costs is a meaningful financial metric and enhances our understanding of the underlying profitability drivers of our business, it should not be used as a substitute for total benefits and expenses presented under GAAP.

• Net investment earned rate, cost of funds, net investment spread and investment margin on deferred annuities are non-GAAP measures we use to evaluate the profitability of our business. We believe these metrics are useful in analyzing the trends of our business operations, profitability and pricing discipline. While we believe each of these metrics are meaningful financial metrics and enhance our understanding of the underlying profitability drivers of our business, they should not be used as a substitute for net investment income, interest sensitive contract benefits or total benefits and expenses presented under GAAP.

• Operating expenses excludes integration, restructuring and other non-operating expenses, stock compensation expense, interest expense and policy acquisition expenses. We believe a measure like operating expenses is useful in analyzing the trends of our core business operations and profitability. While we believe operating expenses is a meaningful financial metric and enhances our understanding of the underlying profitability drivers of our business, it should not be used as a substitute for policy and other operating expenses presented under GAAP.

INVESTED ASSETS

In managing our business we analyze invested assets, which does not correspond to total investments, including investments in related parties, as disclosed in our consolidated financial statements and notes thereto. Invested assets represents the investments that directly back our reserve liabilities as well as surplus assets. Invested assets is used in the computation of net investment earned rate, which allows us to analyze the profitability of our investment portfolio. Invested assets includes (a) total investments on the consolidated balance sheets with AFS securities at cost or amortized cost, excluding derivatives, (b) cash and cash equivalents and restricted cash, (c) investments in related parties, (d) accrued investment income, (e) the consolidated VIE assets, liabilities and noncontrolling interest, (f) net investment payables and receivables and (g) policy loans ceded (which offset the direct policy loans in total investments). Invested assets also excludes assets associated with funds withheld liabilities related to business exited through reinsurance agreements and derivative collateral (offsetting the related cash positions). We include the underlying investments supporting our assumed funds withheld and modco agreements in our invested assets calculation in order to match the assets with the income received. We believe the adjustments for reinsurance provide a view of the assets for which we have economic exposure. Our invested assets are averaged over the number of quarters in the relevant period to compute our net investment earned rate for such period.

RESERVE LIABILITIES

In managing our business we also analyze reserve liabilities, which does not correspond to total liabilities as disclosed in our consolidated financial statements and notes thereto. Reserve liabilities represents our policyholder liability obligations net of reinsurance and is used to analyze the costs of our liabilities. Reserve liabilities includes (a) the interest sensitive contract liabilities, (b) future policy benefits, (c) dividends payable to policyholders, and (d) other policy claims and benefits, offset by reinsurance recoverable, excluding policy loans ceded. Reserve liabilities is net of the ceded liabilities to third-party reinsurers as the costs of the liabilities are passed to such reinsurers and therefore we have no net economic exposure to such liabilities, assuming our reinsurance counterparties perform under our agreements. The majority of our ceded reinsurance is a result of reinsuring large blocks of life business following acquisitions. For such transactions, GAAP requires the ceded liabilities and related reinsurance recoverables to continue to be recorded in our consolidated financial statements despite the transfer of economic risk to the counterparty in connection with the reinsurance transaction.

SALES

Sales statistics do not correspond to revenues under GAAP, but are used as relevant measures to understand our business performance as it relates to deposits generated during a specific period of time. Our sales statistics include deposits for fixed rate annuities and FIAs and align with the LIMRA definition of all money paid into an individual annuity, including money paid into new contracts with initial purchase occurring in the specified period and existing contracts with initial purchase occurring prior to the specified period (excluding internal transfers).

25

Non-GAAP Reconciliations Unaudited (in millions, except per share data)
	Quarterly Trends															Year-to-Date
	1Q’18			2Q’18			3Q’18			4Q’18			1Q’19			2018		2019
RECONCILIATION OF BOOK VALUE PER SHARE TO ADJUSTED BOOK VALUE PER SHARE
Book value per share	$	44.05		$	42.89		$	45.51		$	42.45		$	52.12
AOCI	(3.22		)	(0.75		)	(0.17		)	2.42			(3.64		)
Accumulated change in fair value of reinsurance assets	(0.54		)	(0.06		)	0.16			0.39			(1.59		)
Effect of items convertible to or settled in Class A common shares	0.08			0.19			0.03			0.33			0.41
Adjusted book value per share	$	40.37		$	42.27		$	45.53		$	45.59		$	47.30
RECONCILIATION OF AVERAGE SHAREHOLDERS’ EQUITY TO AVERAGE ADJUSTED SHAREHOLDERS’ EQUITY
Average shareholders’ equity	$	8,932		$	8,575		$	8,720		$	8,627		$	9,197		$	8,932	$	9,197
Less: Average AOCI	1,042			391			90			(220		)	117			1,042		117
Less: Average accumulated change in fair value of reinsurance assets	134			60			(10		)	(53		)	117			134		117
Average adjusted shareholders’ equity	$	7,756		$	8,124		$	8,640		$	8,900		$	8,963		$	7,756	$	8,963
Retirement Services	$	5,366		$	5,772		$	6,537		$	7,416		$	8,004		$	5,366	$	8,004
Corporate and Other	2,390			2,352			2,103			1,484			959			2,390		959
Average adjusted shareholders’ equity	$	7,756		$	8,124		$	8,640		$	8,900		$	8,963		$	7,756	$	8,963
RECONCILIATION OF BASIC WEIGHTED AVERAGE SHARES OUTSTANDING – CLASS A TO WEIGHTED AVERAGE SHARES OUTSTANDING – ADJUSTED OPERATING
Basic weighted average shares outstanding – Class A	148.7			164.5			164.5			164.2			161.3			148.7		161.3
Conversion of Class B shares to Class A shares	41.1			25.5			25.5			25.5			25.4			41.1		25.4
Conversion of Class M shares to Class A shares	5.8			4.7			5.6			5.2			5.1			5.8		5.1
Effect of other stock compensation plans	0.4			0.4			0.5			0.6			0.4			0.4		0.4
Weighted average shares outstanding – adjusted operating	196.0			195.1			196.1			195.5			192.2			196.0		192.2
RECONCILIATION OF CLASS A COMMON SHARES OUTSTANDING TO ADJUSTED OPERATING COMMON SHARES OUTSTANDING
Class A common shares outstanding	164.5			164.5			164.6			162.2			161.3
Conversion of Class B shares to Class A shares	25.5			25.5			25.5			25.4			25.4
Conversion of Class M shares to Class A shares	5.8			5.4			6.0			4.9			5.0
Effect of other stock compensation plans	1.0			1.0			1.1			1.0			0.7
Adjusted operating common shares outstanding	196.8			196.4			197.2			193.5			192.4

26

Non-GAAP Reconciliations Unaudited (in millions, except percentages)
	Quarterly Trends															Year-to-Date
	1Q’18			2Q’18			3Q’18			4Q’18			1Q’19			2018			2019
RECONCILIATION OF NET INVESTMENT INCOME TO NET INVESTMENT EARNINGS
GAAP net investment income	$	855		$	958		$	1,070		$	1,121		$	1,066		$	855		$	1,066
Change in fair value of reinsurance assets	45			72			52			132			132			45			132
Net VIE earnings	15			1			39			(18		)	21			15			21
Alternative income gain (loss)	1			(1		)	(14		)	(20		)	(5		)	1			(5		)
Held for trading amortization	(23		)	(21		)	(21		)	(11		)	(11		)	(23		)	(11		)
Total adjustments to arrive at net investment earnings	38			51			56			83			137			38			137
Total net investment earnings	$	893		$	1,009		$	1,126		$	1,204		$	1,203		$	893		$	1,203
Retirement Services	$	866		$	983		$	1,108		$	1,231		$	1,171		$	866		$	1,171
Corporate and Other	27			26			18			(27		)	32			27			32
Total net investment earnings	$	893		$	1,009		$	1,126		$	1,204		$	1,203		$	893		$	1,203
RECONCILIATION OF NET INVESTMENT INCOME RATE TO NET INVESTMENT EARNED RATE
GAAP net investment income rate	4.41		%	4.47		%	4.30		%	4.10		%	3.79		%	4.41		%	3.79		%
Change in fair value of reinsurance assets	0.22		%	0.34		%	0.20		%	0.48		%	0.47		%	0.22		%	0.47		%
Net VIE earnings	0.08		%	0.00		%	0.16		%	(0.07		)%	0.08		%	0.08		%	0.08		%
Alternative income gain (loss)	0.01		%	0.00		%	(0.06		)%	(0.07		)%	(0.02		)%	0.01		%	(0.02		)%
Held for trading amortization	(0.12		)%	(0.10		)%	(0.08		)%	(0.04		)%	(0.04		)%	(0.12		)%	(0.04		)%
Total adjustments to arrive at net investment earned rate	0.19		%	0.24		%	0.22		%	0.30		%	0.49		%	0.19		%	0.49		%
Consolidated net investment earned rate	4.60		%	4.71		%	4.52		%	4.40		%	4.28		%	4.60		%	4.28		%
Retirement Services	4.63		%	4.74		%	4.55		%	4.57		%	4.21		%	4.63		%	4.21		%
Corporate and Other	3.76		%	3.71		%	3.51		%	(7.57		)%	13.19		%	3.76		%	13.19		%
Consolidated net investment earned rate	4.60		%	4.71		%	4.52		%	4.40		%	4.28		%	4.60		%	4.28		%
Retirement Services	$	74,735		$	82,879		$	97,500		$	107,939		$	111,443		$	74,735		$	111,443
Corporate and Other	2,844			2,848			2,103			1,484			959			2,844			959
Consolidated average invested assets	$	77,579		$	85,727		$	99,603		$	109,423		$	112,402		$	77,579		$	112,402

27

Non-GAAP Reconciliations Unaudited (in millions, except percentages)
	Quarterly Trends															Year-to-Date
	1Q’18			2Q’18			3Q’18			4Q’18			1Q’19			2018			2019
RECONCILIATION OF INTEREST SENSITIVE CONTRACT BENEFITS TO COST OF CREDITING
GAAP interest sensitive contract benefits	$	31		$	342		$	742		$	(825	)	$	1,516		$	31		$	1,516
Interest credited other than deferred annuities and institutional products	7			9			14			35			55			7			55
FIA option costs	174			206			231			275			278			174			278
Product charges (strategy fees)	(22		)	(23		)	(25		)	(28		)	(28		)	(22		)	(28		)
Reinsurance embedded derivative impacts	3			3			29			14			15			3			15
Change in fair values of embedded derivatives – FIAs	121			(178		)	(546		)	1,039			(1,311		)	121			(1,311		)
Negative VOBA amortization	10			7			5			9			12			10			12
Other changes in interest sensitive contract liabilities	(2		)	2			3			(3		)	(2		)	(2		)	(2		)
Total adjustments to arrive at cost of crediting	291			26			(289		)	1,341			(981		)	291			(981		)
Retirement Services cost of crediting	$	322		$	368		$	453		$	516		$	535		$	322		$	535
GAAP interest sensitive contract benefits	0.16		%	1.65		%	3.04		%	(3.06		)%	5.44		%	0.16		%	5.44		%
Interest credited other than deferred annuities and institutional products	0.04		%	0.04		%	0.06		%	0.13		%	0.20		%	0.04		%	0.20		%
FIA option costs	0.93		%	0.99		%	0.95		%	1.02		%	1.00		%	0.93		%	1.00		%
Product charges (strategy fees)	(0.12		)%	(0.11		)%	(0.10		)%	(0.10		)%	(0.10		)%	(0.12		)%	(0.10		)%
Reinsurance embedded derivative impacts	0.02		%	0.02		%	0.12		%	0.05		%	0.05		%	0.02		%	0.05		%
Change in fair values of embedded derivatives – FIAs	0.65		%	(0.85		)%	(2.24		)%	3.85		%	(4.70		)%	0.65		%	(4.70		)%
Negative VOBA amortization	0.05		%	0.03		%	0.02		%	0.03		%	0.04		%	0.05		%	0.04		%
Other changes in interest sensitive contract liabilities	(0.01		)%	0.01		%	0.01		%	(0.01		)%	(0.01		)%	(0.01		)%	(0.01		)%
Total adjustments to arrive at cost of crediting	1.56		%	0.13		%	(1.18		)%	4.97		%	(3.52		)%	1.56		%	(3.52		)%
Retirement Services cost of crediting	1.72		%	1.78		%	1.86		%	1.91		%	1.92		%	1.72		%	1.92		%
Retirement Services cost of crediting on deferred annuities	1.87		%	1.92		%	1.98		%	2.00		%	1.98		%	1.87		%	1.98		%
Retirement Services cost of crediting on institutional products	3.14		%	3.16		%	3.54		%	3.74		%	3.69		%	3.14		%	3.69		%
Retirement Services cost of crediting	1.72		%	1.78		%	1.86		%	1.91		%	1.92		%	1.72		%	1.92		%
Retirement Services average invested assets	$	74,735		$	82,879		$	97,500		$	107,939		$	111,443		$	74,735		$	111,443
Average account value on deferred annuities	58,993			66,241			79,673			88,874			89,809			58,993			89,809
Average institutional reserve liabilities	5,955			6,341			6,608			7,827			9,809			5,955			9,809

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Non-GAAP Reconciliations Unaudited (in millions)
	Quarterly Trends															Year-to-Date
	1Q’18			2Q’18			3Q’18			4Q’18			1Q’19			2018			2019
RECONCILIATION OF BENEFITS AND EXPENSES TO OTHER LIABILITY COSTS
GAAP benefits and expenses	$	689		$	1,481		$	1,897		$	1,301		$	4,221		$	689		$	4,221
Premiums	(278		)	(731		)	(526		)	(1,833		)	(1,966		)	(278		)	(1,966		)
Product charges	(96		)	(106		)	(119		)	(128		)	(125		)	(96		)	(125		)
Other revenues	(6		)	(6		)	(10		)	(4		)	(12		)	(6		)	(12		)
Cost of crediting	(145		)	(159		)	(193		)	(227		)	(242		)	(145		)	(242		)
Change in fair value of embedded derivatives - FIA, net of offsets	66			(237		)	(768		)	1,266			(1,260		)	66			(1,260		)
DAC, DSI and VOBA amortization related to investment gains and losses	20			26			28			36			(173		)	20			(173		)
Rider reserves	1			6			1			8			(28		)	1			(28		)
Policy and other operating expenses, excluding policy acquisition expenses	(97		)	(97		)	(98		)	(102		)	(103		)	(97		)	(103		)
VIE operating expenses	—			(1		)	—			—			—			—			—
AmerUs closed block fair value liability	54			36			8			14			(53		)	54			(53		)
Other	—			8			1			1			1			—			1
Total adjustments to arrive at other liability costs	(481		)	(1,261		)	(1,676		)	(969		)	(3,961		)	(481		)	(3,961		)
Other liability costs	$	208		$	220		$	221		$	332		$	260		$	208		$	260
Retirement Services	$	208		$	220		$	221		$	332		$	260		$	208		$	260
Corporate and Other	—			—			—			—			—			—			—
Consolidated other liability costs	$	208		$	220		$	221		$	332		$	260		$	208		$	260
RECONCILIATION OF POLICY AND OTHER OPERATING EXPENSES TO OPERATING EXPENSES
Policy and other operating expenses	$	142		$	153		$	158		$	172		$	165		$	142		$	165
Interest expense	(13		)	(16		)	(15		)	(13		)	(17		)	(13		)	(17		)
Policy acquisition expenses, net of deferrals	(45		)	(57		)	(60		)	(70		)	(62		)	(45		)	(62		)
Integration, restructuring and other non-operating expenses	(8		)	(8		)	(2		)	(4		)	(1		)	(8		)	(1		)
Stock compensation expenses	(3		)	(2		)	(3		)	(3		)	(3		)	(3		)	(3		)
Total adjustments to arrive at operating expenses	(69		)	(83		)	(80		)	(90		)	(83		)	(69		)	(83		)
Operating expenses	$	73		$	70		$	78		$	82		$	82		$	73		$	82
Retirement Services	$	58		$	56		$	63		$	65		$	62		$	58		$	62
Corporate and Other	15			14			15			17			20			15			20
Consolidated operating expenses	$	73		$	70		$	78		$	82		$	82		$	73		$	82

29

Non-GAAP Reconciliations Unaudited (in millions)
	December 31, 2018			March 31, 2019
RECONCILIATION OF TOTAL INVESTMENTS INCLUDING RELATED PARTIES TO INVESTED ASSETS
Total investments including related parties	$	107,632		$	115,687
Derivative assets	(1,043		)	(1,920		)
Cash and cash equivalents (including restricted cash)	3,403			3,518
Accrued investment income	682			751
Payables for collateral on derivatives	(969		)	(1,781		)
Reinsurance funds withheld and modified coinsurance	223			(578		)
VIE and VOE assets, liabilities and noncontrolling interest	718			676
Unrealized (gains) losses	808			(1,254		)
Ceded policy loans	(281		)	(283		)
Net investment receivables (payables)	(139		)	(1,045		)
Total adjustments to arrive at invested assets	3,402			(1,916		)
Total invested assets	$	111,034		$	113,771
RECONCILIATION OF INVESTMENT FUNDS INCLUDING RELATED PARTIES AND VIES TO ALTERNATIVE INVESTMENTS
Investment funds including related parties and VIEs	$	3,559		$	3,592
CLO equities included in trading securities	125			124
Investment funds within funds withheld at interest	660			591
Royalties and other assets included in other investments	71			69
Net assets of the VIE, excluding investment funds	50			18
Unrealized (gains) losses and other adjustments	27			(4)
Total adjustments to arrive at alternative investments	933			798
Alternative investments	$	4,492		$	4,390
RECONCILIATION OF TOTAL LIABILITIES TO RESERVE LIABILITIES
Total liabilities	$	117,229		$	122,740
Long-term debt	(991		)	(991		)
Derivative liabilities	(85		)	(85		)
Payables for collateral on derivatives	(969		)	(1,781		)
Funds withheld liability	(721		)	(724		)
Other liabilities	(888		)	(1,410		)
Liabilities of consolidated VIEs	(1		)	(1		)
Reinsurance ceded receivables	(5,534		)	(5,647		)
Policy loans ceded	(281		)	(283		)
Other	(27		)	(27		)
Total adjustments to arrive at reserve liabilities	(9,497		)	(10,949		)
Total reserve liabilities	$	107,732		$	111,791

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