Company Highlights
- Second quarter 2023 net income available to common
stockholders of $344.4 million, or $4.36 per diluted common share
compared to net income of $752.4 million, or $8.06 per diluted
common share for second quarter 2022 restated for the adoption of
Accounting Standards Update 2018-12 — more commonly known as Long
Duration Targeted Improvements or LDTI.
- Non-GAAP operating income available to common stockholders1
for the second quarter 2023 was $127.6 million, or $1.62 per
diluted common share; Notable items2 negatively impacted results in
the quarter by $8.9 million, or $0.11 per share,
after-tax.
- On a trailing twelve-month basis GAAP return on equity of
26.4% and non-GAAP operating return on equity1 of 12.1%
- Total sales4 of $2.0 billion including approximately $1.9
billion of FIA sales reflecting a sequential quarterly FIA sales
increase of 95%
- Private asset deployment ramp continues with over $800
million sourced in the quarter, bringing total portfolio allocation
to 24.9%
- Ceded $821 million of flow reinsurance to reinsurance
partners creating "fee-like" revenues and growing account value
subject to recurring fees under reinsurance agreements to $10.9
billion
American Equity Investment Life Holding Company (NYSE: AEL), a
leading issuer of fixed index annuities (FIAs), today reported its
second quarter 2023 results. Sales momentum accelerated in both the
independent agent channel and bank and broker-dealer channel while
the investment portfolio allocation to private assets continued to
increase.
American Equity's President and CEO, Anant Bhalla stated: "AEL
2.0 is thriving with the business firing on all cylinders or
components of our flywheel. New business sales of $2 billion in the
second quarter is at nearly all-time highs for AEL. Private asset
investments over $12 billion – or 25% of all invested assets on the
balance sheet – and nearly $11 billion of account values ceded to
reinsurance partners to earn “fee-like” revenues are both
significant milestones in our transformation into a capital-light
and more resilient, +12% ROE earning institution for the benefit of
our shareholders. This is the vision that we shared 3 years ago,
and we have delivered on it, ahead of schedule. Our Board of
Directors and Management leadership are proud of the achievements
of the AEL team and our network of business partners."
Bhalla continued: "Looking ahead, we expect our primary focus
for the remainder of 2023 to be on completing our planned merger
transaction with Brookfield Reinsurance (NYSE, TSX: BNRE), which is
currently expected to close by the first half of 2024, while
continuing to excel as the premier provider of Financial Dignity
Solutions to retail clients.”
Non-GAAP operating income available to common stockholders1 for
the second quarter of 2023 was $127.6 million, or $1.62 per diluted
common share, compared to non-GAAP operating income available to
common stockholders1 of $124.3 million, or $1.47 per diluted common
share, for the first quarter of 2023 and $151.2 million, or $1.62
per diluted common share, for the second quarter of 2022, restated
for the adoption of Accounting Standards Update 2018-12 —
more commonly known as Long Duration Targeted Improvements or LDTI.
For the second quarter of 2023, non-GAAP operating income available
to common stockholders1 was negatively affected by $8.9 million, or
$0.11 per share, after taxes, from notable items2. Results in the
first quarter of 2023 included negative notable items2 of $9.6
million, or $0.11 per share after taxes, while there were no
notable items2 affecting results for the second quarter of
2022.
The year-over-year change in quarterly non-GAAP operating income
available to common stockholders1 excluding the impact of notable
items2 reflects increased recurring fee revenue related to
reinsurance and higher surrender charge fee income more than offset
by lower investment spread income.
Compared to the first quarter of 2023, quarterly non-GAAP
operating income available to common stockholders1 excluding the
impact of notable items2 increased slightly reflecting higher
surrender charge fee income, a smaller increase in the Market Risk
Benefit liability and lower tax rate offset by lower investment
spread income. Notable items2 in the first and second quarters of
2023 reflect the special incentive compensation plan put in place
in November 2022.
For the second quarter of 2023, net investment income fell to
$547 million, when adjusted to reflect non-GAAP operating income
available to common stockholders1, from $559 million for the first
quarter of 2023. This $12 million decrease reflects a six-basis
point decline in effective yield on the investment portfolio, lower
invested assets, and a decrease in cash and short-term investments
at the holding company level. The decline in the portfolio yield
resulted from a decrease in the return from partnerships and other
mark-to-market investments which more than offset higher short-term
floating rates and new money investment yields.
Compared to the first quarter of 2023, second quarter surrender
charge income increased $7 million to $34 million, reflecting
increased lapsation associated with higher interest rates
positively affecting yields on bank deposits and new money caps,
participation rates and credited interest rates on annuities
offered by American Equity and its competitors.
Outflows in the second quarter of 2023, including surrenders,
income utilization and partial withdrawals, were nearly flat
compared to the first quarter of 2023, totaling $1.3 billion.
As of June 30, 2023, account value of business ceded subject to
fee income was $10.9 billion, up from $10.2 billion three months
earlier. Flow reinsurance ceded subject to fee income in the second
quarter of 2023 totaled $821 million of account value. Revenue
associated with recurring fees under reinsurance agreements for the
second quarter of 2023 totaled $23 million compared to $22 million
for the first quarter of 2023, each as adjusted to reflect non-GAAP
operating income available to common stockholders1. First quarter
2023 revenue included a positive $1 million true-up associated with
the final settlement of the fourth quarter 2022 reinsurance
transaction.
The cost of money for deferred annuities in the second quarter
increased $4 million from the first quarter of 2023 to $217
million. Cost of money in the second quarter of 2023 benefited from
approximately $4 million in hedging gains.
Compared to the first quarter of 2023, the change in the MRB
liability decreased by $6 million to $41 million when adjusted to
reflect non-GAAP operating income available to common
stockholders1. Second quarter 2023 change in MRB liability adjusted
to reflect non-GAAP operating income available to common
stockholders1 was $5 million less than expected, consisting of a $7
million benefit from reserves released due to higher-than-expected
surrenders, and a $4 million benefit from higher amortization of
net deferred capital market impact due to favorable second quarter
capital market changes, offset by $6 million of other adverse
experience. The change in the modeled expectation for the MRB
liability, adjusted to reflect non-GAAP operating income available
to common stockholders1, for the third quarter of 2023 is $41.5
million, before the effects of potential third quarter actuarial
assumption revisions, based on current in-force. Third quarter 2023
expected change in the MRB liability includes an expected benefit
from the amortization of capital market impacts on the fair value
of market risk benefits of $20 million.
Amortization of deferred policy acquisition and sales inducement
cost was basically flat at $115 million for the second quarter of
2023. Amortization in the quarter included $1 million of expense
associated with new sales. For the third quarter of 2023, the
modeled expectation for deferred acquisition cost and deferred
sales inducement amortization is $117 million before the effect of
new sales, experience variances and potential third quarter
actuarial assumption revisions.
Other operating costs and expenses for the second quarter of
2023 increased to $76 million, up $2 million from the first
quarter. Notable items2 in the second and first quarters of 2023
were $11 million and $12 million, pre-tax, respectively, both
reflecting quarterly expense associated with the strategic
incentive compensation award made in November 2022.
The effective tax rate on pre-tax operating income available for
common stockholders1 for the second quarter of 2023 was 20.8%
compared to the first quarter of 2023 tax rate of 24.4%. Tax
expense in the first quarter included a $6 million true-up related
to 2022 which contributed approximately 300 basis points to the
effective tax rate.
POINT-IN-TIME YIELD INCREASES ON STRONG ORIGINATION OF
PRIVATE ASSETS
American Equity’s investment spread was 2.57% for the second
quarter of 2023 compared to 2.67% for the first quarter of 2023 and
2.64% for the second quarter of 2022. Excluding non-trendable
items3, adjusted investment spread decreased to 2.53% in the second
quarter of 2023 from 2.67% in the first quarter of 2023.
Average yield on invested assets was 4.42% in the second quarter
of 2023 compared to 4.48% in the first quarter of 2023. The average
adjusted yield on invested assets excluding non-trendable items3
was 4.41% in the second quarter of 2023 compared to 4.48% in the
first quarter of 2023.
During the second quarter of 2023, investment asset purchases
totaled $2.3 billion and were made at an average rate of 6.54%,
including approximately $800 million of private assets at
7.14%.
The point-in-time yield on the portfolio at June 30, 2023, was
4.77%. We continue to expect to see positive impacts from higher
short term rates on $7.2 billion of floating rate securities in the
investment portfolio, while we add to our existing cash and cash
equivalents positions to reduce risk in the investment portfolio as
we prepare for the closing of our proposed Merger with Brookfield
Reinsurance. Reflecting these actions, the point-in-time yield at
the end of the third quarter of 2023 is expected to be relatively
flat compared to the end of the previous quarter.
The aggregate cost of money for annuity liabilities of 1.85% in
the second quarter of 2023 was up four basis points compared to the
first quarter of 2023. The cost of money in the second quarter of
2023 reflects a three-basis point benefit from the over-hedging of
index-linked credits compared to a minimal benefit in the first
quarter of 2023. The seven-basis point increase in the adjusted
cost of money compared to the first quarter is in line with
increased market costs.
Cost of options in the second quarter of 2023 averaged 1.93%
compared to 1.79% in the first quarter of 2023, reflecting both
market effects on the cost of options for renewals as well as
higher option costs on new sales due to increases in caps,
participation rates and credited interest rates on our annuity
products over time consistent with the interest rate environment.
Approximately 70% of the increase in the cost of options in the
second quarter was associated with new sales.
Net account balance growth in the second quarter was a positive
$111 million, or 0.2% of account values, compared to a net account
balance decrease of $472 million in the first quarter. Index
credits in the second quarter were generally in-line with modeled
expectations while net flows improved substantially from the first
quarter of the year.
FIA SALES INCREASE 95% FROM PRIOR SEQUENTIAL QUARTER
Second quarter 2023 sales were $2.0 billion, of which 93.9%, or
$1.9 billion, were in fixed index annuities. Total enterprise FIA
sales increased 94.7% and 142.0% compared to the first quarter of
2023 and the second quarter of 2022, respectively. Compared to the
first quarter of 2023, FIA sales at American Equity Life in the
Independent Marketing Organization (IMO) channel doubled, while
Eagle Life FIA sales through banks and broker-dealers rose
77.7%.
Bhalla noted, "Total enterprise sales in July were approximately
$680 million. As interest rates remain volatile, and possibly move
higher, we may see competitors chase rates. In that scenario, we
will likely continue to emphasize building cash on the balance
sheet, with an eye towards even better investment opportunities in
the future, while maintaining the underwriting discipline necessary
to write resilient, double-digit, return on capital business.
Therefore, we expect to manage sales levels through the remainder
of the year to finish 2023 with total FIA sales in the $5 billion
to $6 billion range across our IMO, bank and broker dealer
channels. We expect the bank and broker dealer channels to
contribute approximately 25% of new sales – a meaningful
achievement reflecting the re-building of these channels over the
past three years."
CREDIT AND CAPITAL METRICS LARGELY UNCHANGED
With regard to credit markets, Jim Hamalainen, Chief Investment
Officer, added, "Credit metrics in the investment portfolio remain
largely unchanged from the end of the first quarter, and our fixed
securities portfolio remains A- rated. Total net realized losses
for the quarter of approximately $25 million includes a loss of $44
million on First Republic Bank. Regional bank valuations have
stabilized, and we remain comfortable with our $127 million
exposure, which is heavily slanted towards the large regionals and
has an overall rating in the BBB+ range. We saw very little
deterioration in the commercial mortgage loan portfolio and all
loans are performing. Average loan-to-value of the CML portfolio
remains at 53% and over 80% of the portfolio maintains a debt
service coverage ratio of 1.2x or higher. Looking specifically at
our direct office mortgage loan exposure, we are considerably
underweight relative to our peers at just 8% of the CML portfolio.
The average debt service coverage ratio on the office mortgage loan
portfolio is 1.91x with an average loan-to-value ratio of 61%. We
have only $7 million of loans maturing through the end of 2024 with
just $31 million set to mature in 2025."
Hamalainen continued, "So far through the third quarter, we have
built up a substantial cash position in the investment portfolio of
$5.4 billion funded through sales of the core fixed income
portfolio – primarily corporate bonds, municipal bonds and
structured assets – and we expect our cash position to increase to
between $7 billion and $10 billion over the next few quarters with
cash likely at the low-end of the range by year-end. These actions
will help protect the company if macro-economic trends point to
stubbornly high inflation or growing risks in the economy, while
providing the company with substantial dry powder to take advantage
of opportunities that may emerge in the private asset sector over
the coming year."
Following the announcement of the definitive agreement to merge
with Brookfield Reinsurance, the company terminated its accelerated
share repurchase program having repurchased the 4.8 million shares
delivered to it on March 20, 2023. Given the impending merger
transaction, the previously announced capital return plan for the
company is currently suspended.
As of June 30, total adjusted capital at American Equity Life
Insurance Co. totaled $4.1 billion with estimated excess capital of
over $600 million. Additionally, cash and equivalents at the
holding company level was $390 million at quarter-end and $462
million as of July 31st.
UPDATE ON DEFINITIVE AGREEMENT WITH BROOKFIELD
REINSURANCE
On July 5, 2023, Brookfield Reinsurance and American Equity
announced that they had entered into a definitive agreement whereby
Brookfield Reinsurance will acquire all of the outstanding shares
of common stock of American Equity it does not already own in a
cash and stock transaction that values AEL at approximately $4.3
billion.
The merger is expected to close in the first half of 2024,
subject to approval by American Equity shareholders and other
closing conditions customary for a transaction of this type,
including receipt of insurance regulatory approvals in relevant
jurisdictions and the expiration or termination of the applicable
waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
The forward-looking statements in this release such as believe,
build, confident, continue, could, estimate, expect, exposure,
future, grow, likely, maintain, may, might, model, opportunity,
outlook, plan, potential, proposed, risk, scenario, should, trend,
will, would, and their derivative forms and similar words, as well
as any projections of future results, are based on assumptions and
expectations that involve risks and uncertainties, including the
"Risk Factors" the company describes in its U.S. Securities and
Exchange Commission filings. The Company's future results could
differ, and it has no obligation to correct or update any of these
statements.
ABOUT AMERICAN EQUITY
At American Equity Investment Life Holding Company, our
policyholders work with over 40,000 independent agents and advisors
affiliated with independent market organizations (IMOs), banks and
broker-dealers through our wholly-owned operating subsidiaries.
Advisors and agents choose one of our leading annuity products best
suited for their clients' personal needs to create financial
dignity in retirement. To deliver on its promises to policyholders,
American Equity has re-framed its investment focus — building a
stronger emphasis on insurance liability driven asset allocation
and specializing in alternate, private asset management while
partnering with world renowned, public fixed income asset managers.
American Equity is headquartered in West Des Moines, Iowa with
additional offices in Charlotte, NC, New York, NY and Miami, FL.
For more information, please visit www.american-equity.com.
1
Use of non-GAAP financial measures is
discussed in this release in the tables that follow the text of the
release.
2
Notable items reflect the increase
(decrease) to non-GAAP operating income (loss) available to common
stockholders for certain matters where more detail may help
investors better understand, evaluate, and forecast results.
Notable items are further discussed in the tables that follow the
text of the release.
3
Non-trendable items are the impact of
investment yield – additional prepayment income and cost of money
effect of over (under) hedging as shown in our June 30, 2023
financial supplement on page 10, “Spread Results”.
4
For the purposes of this document, all
references to sales are on a gross basis. Gross sales is defined as
sales before the use of reinsurance.
American Equity Investment Life Holding Company
Unaudited (Dollars in thousands)
Consolidated Statements of
Operations
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Revenues:
Premiums and other considerations
$
2,516
$
3,831
$
6,653
$
13,909
Annuity product charges
71,642
55,514
134,233
107,869
Net investment income
542,685
592,308
1,104,008
1,159,731
Change in fair value of derivatives
242,739
(506,181
)
288,629
(983,700
)
Net realized losses on investments
(24,679
)
(33,272
)
(52,466
)
(46,399
)
Other revenue
16,736
9,408
33,130
18,225
Total revenues
851,639
121,608
1,514,187
269,635
Benefits and expenses:
Insurance policy benefits and change in
future policy benefits
5,125
6,998
12,333
20,613
Interest sensitive and index product
benefits
122,387
140,346
180,298
428,263
Market risk benefits (gains) losses
(144,124
)
(299,278
)
39,570
(107,385
)
Amortization of deferred sales
inducements
46,951
44,696
93,552
89,781
Change in fair value of embedded
derivatives
213,764
(885,984
)
618,204
(2,279,633
)
Interest expense on notes and loan
payable
11,227
6,461
22,245
12,886
Interest expense on subordinated
debentures
1,338
1,346
2,674
2,663
Amortization of deferred policy
acquisition costs
68,476
72,485
136,711
145,454
Other operating costs and expenses
75,697
59,872
149,701
117,667
Total benefits and expenses
400,841
(853,058
)
1,255,288
(1,569,691
)
Income before income taxes
450,798
974,666
258,899
1,839,326
Income tax expense
95,652
211,377
59,644
396,572
Net income
355,146
763,289
199,255
1,442,754
Less: Net loss available to noncontrolling
interests
(217
)
(4
)
(114
)
(4
)
Net income available to American Equity
Investment Life Holding Company stockholders
355,363
763,293
199,369
1,442,758
Less: Preferred stock dividends
10,919
10,919
21,838
21,838
Net income available to American Equity
Investment Life Holding Company common stockholders
$
344,444
$
752,374
$
177,531
$
1,420,920
Earnings per common share
$
4.43
$
8.13
$
2.20
$
15.01
Earnings per common share - assuming
dilution
$
4.36
$
8.06
$
2.17
$
14.86
Weighted average common shares outstanding
(in thousands):
Earnings per common share
77,767
92,544
80,576
94,693
Earnings per common share - assuming
dilution
78,928
93,375
81,824
95,652
NON-GAAP FINANCIAL MEASURES
In addition to net income available to common stockholders, we
have consistently utilized non-GAAP operating income available to
common stockholders and non-GAAP operating income available to
common stockholders per common share - assuming dilution, non-GAAP
financial measures commonly used in the life insurance industry, as
economic measures to evaluate our financial performance. Non-GAAP
operating income available to common stockholders equals net income
available to common stockholders adjusted to eliminate the impact
of items that fluctuate from quarter to quarter in a manner
unrelated to core operations, and we believe measures excluding
their impact are useful in analyzing operating trends. The most
significant adjustments to arrive at non-GAAP operating income
available to common stockholders eliminate the impact of fair value
accounting for our fixed index annuity business. These adjustments
are not economic in nature but rather impact the timing of reported
results. We believe the combined presentation and evaluation of
non-GAAP operating income available to common stockholders together
with net income available to common stockholders provides
information that may enhance an investor’s understanding of our
underlying results and profitability.
Reconciliation from Net Income
Available to Common Stockholders to Non-GAAP Operating Income
Available to Common Stockholders
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net income available to American Equity
Investment Life Holding Company common stockholders
$
344,444
$
752,374
$
177,531
$
1,420,920
Adjustments to arrive at non-GAAP
operating income available to common stockholders:
Net realized losses on financial assets,
including credit losses
22,737
37,054
47,121
50,779
Change in fair value of derivatives and
embedded derivatives
(124,816
)
(470,813
)
81,386
(1,318,020
)
Capital markets impact on the change in
fair value of market risk benefits
(184,700
)
(335,330
)
(47,750
)
(216,417
)
Net investment income
4,609
—
2,118
—
Other revenue
5,969
—
11,938
—
Income taxes
59,373
167,944
(20,392
)
321,034
Non-GAAP operating income available to
common stockholders
$
127,616
$
151,229
$
251,952
$
258,296
Impact of excluding notable items (a)
$
8,892
$
—
$
18,458
$
—
Per common share - assuming dilution:
Net income available to American Equity
Investment Life Holding Company common stockholders
$
4.36
$
8.06
$
2.17
$
14.86
Adjustments to arrive at non-GAAP
operating income available to common stockholders:
Net realized losses on financial assets,
including credit losses
0.29
0.39
0.58
0.53
Change in fair value of derivatives and
embedded derivatives
(1.58
)
(5.04
)
0.99
(13.78
)
Capital markets impact on the change in
fair value of market risk benefits
(2.34
)
(3.59
)
(0.58
)
(2.26
)
Net investment income
0.06
—
0.02
—
Other revenue
0.08
—
0.15
—
Income taxes
0.75
1.80
(0.25
)
3.35
Non-GAAP operating income available to
common stockholders
$
1.62
$
1.62
$
3.08
$
2.70
Impact of excluding notable items (a)
$
0.11
$
—
$
0.23
$
—
Notable Items
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Notable items impacting non-GAAP operating
income available to common stockholders:
Expense associated with strategic
incentive award
8,892
—
$
18,458
$
—
Total notable items (a)
$
8,892
$
—
$
18,458
$
—
(a)
Notable items reflect the after-tax
increase (decrease) to non-GAAP operating income (loss) available
to common stockholders for certain matters where more detail may
help investors better understand, evaluate, and forecast
results.
For the three and six months ended June
30, 2023, non-GAAP operating income available to common
stockholders would increase $8.9 million and $18.5 million,
respectively, if we were to exclude the impact of notable
items.
Book Value per Common
Share
Q2 2023
Total stockholders’ equity attributable
to American Equity Investment Life Holding Company
$
2,571,915
Equity available to preferred stockholders
(a)
(700,000
)
Total common stockholders' equity (b)
1,871,915
Accumulated other comprehensive (income)
loss (AOCI)
3,425,248
Total common stockholders’ equity
excluding AOCI (b)
5,297,163
Net impact of fair value accounting for
derivatives and embedded derivatives
(1,587,599
)
Net capital markets impact on the fair
value of market risk benefits
(638,442
)
Total common stockholders’ equity
excluding AOCI and the net impact of fair value accounting for
fixed index annuities (b)
$
3,071,122
Common shares outstanding
78,047,941
Book Value per Common Share:
(c)
Book value per common share
$
23.98
Book value per common share excluding AOCI
(b)
$
67.87
Book value per common share excluding AOCI
and the net impact of fair value accounting for fixed index
annuities (b)
$
39.35
(a)
Equity available to preferred stockholders
is equal to the redemption value of outstanding preferred stock
plus share dividends declared but not yet issued.
(b)
Total common stockholders' equity, total
common stockholders' equity excluding AOCI and total common
stockholders' equity excluding AOCI and the net impact of fair
value accounting for fixed index annuities, non-GAAP financial
measures, exclude equity available to preferred stockholders. Total
common stockholders’ equity and book value per common share
excluding AOCI, non-GAAP financial measures, are based on common
stockholders’ equity excluding the effect of AOCI. Since AOCI
fluctuates from quarter to quarter due to unrealized changes in the
fair value of available for sale securities, we believe these
non-GAAP financial measures provide useful supplemental
information. Total common stockholders' equity and book value per
common share excluding AOCI and the net impact of fair value
accounting for fixed index annuities, non-GAAP financial measures,
are based on common stockholders' equity excluding AOCI and the net
impact of fair value accounting for fixed index annuities. Since
the net impact of fair value accounting for our fixed index annuity
business is not economic in nature but rather impact the timing of
reported results, we believe these non-GAAP financial measures
provide useful supplemental information.
(c)
Book value per common share including and
excluding AOCI and book value per common share excluding AOCI and
the net impact of fair value accounting for fixed index annuities
are calculated as total common stockholders’ equity, total common
stockholders’ equity excluding AOCI and total common stockholders'
equity excluding AOCI and the net impact of fair value accounting
for fixed index annuities divided by the total number of shares of
common stock outstanding.
NON-GAAP FINANCIAL MEASURES
Average Common Stockholders' Equity and
Return on Average Common Stockholders' Equity
Return on average common stockholders' equity measures how
efficiently we generate profits from the resources provided by our
net assets. Return on average common stockholders' equity is
calculated by dividing net income available to common stockholders,
for the trailing twelve months, by average equity available to
common stockholders. Non-GAAP operating return on average common
stockholders' equity excluding average accumulated other
comprehensive income (AOCI) and average net impact of fair value
accounting for fixed index annuities is calculated by dividing
non-GAAP operating income available to common stockholders, for the
trailing twelve months, by average common stockholders' equity
excluding average AOCI and average net impact of fair value
accounting for fixed index annuities. We exclude AOCI because AOCI
fluctuates from quarter to quarter due to unrealized changes in the
fair value of available for sale investments. We exclude the net
impact of fair value accounting for fixed index annuities as the
amounts are not economic in nature but rather impact the timing of
reported results.
Twelve Months Ended
June 30, 2023
Average Common Stockholders' Equity
Attributable to American Equity Investment Life Holding Company,
Excluding Average AOCI and Average Net Impact of Fair Value
Accounting for Fixed Index Annuities
Average total stockholders’ equity
$
3,098,646
Average equity available to preferred
stockholders
(700,000
)
Average equity available to common
stockholders
2,398,646
Average AOCI
2,828,421
Average common stockholders' equity
excluding average AOCI
5,227,067
Average net impact of fair value
accounting for derivatives and embedded derivatives
(1,502,922
)
Average net capital markets impact on the
fair value of market risk benefits
(550,149
)
Average common stockholders' equity
excluding average AOCI and average net impact of fair value
accounting for fixed index annuities
$
3,173,996
Net income available to American Equity
Investment Life Holding Company common stockholders
$
633,155
Adjustments to arrive at non-GAAP
operating income available to common stockholders:
Net realized losses on financial assets,
including credit losses
44,606
Change in fair value of derivatives and
embedded derivatives
(149,799
)
Capital markets impact on the change in
fair value of market risk benefits
(224,950
)
Net investment income
3,594
Other revenue
17,907
Income taxes
60,412
Non-GAAP operating income available to
common stockholders
$
384,925
Impact of excluding notable items (a)
$
200,348
Return on Average Common Stockholders'
Equity Attributable to American Equity Investment Life Holding
Company
Net income available to common
stockholders
26.4
%
Return on Average Common Stockholders'
Equity Attributable to American Equity Investment Life Holding
Company, Excluding Average AOCI and Average Net Impact of Fair
Value Accounting for Fixed Index Annuities
Non-GAAP operating income available to
common stockholders
12.1
%
Notable
Items
Twelve Months Ended
June 30, 2023
Notable items impacting non-GAAP operating
income available to common stockholders:
Expense associated with strategic
incentive award
$
18,458
Impact of actuarial assumption updates
181,890
Total notable items (a)
$
200,348
(a)
Notable items reflect the after-tax
increase (decrease) to non-GAAP operating income (loss) available
to common stockholders for certain matters where more detail may
help investors better understand, evaluate, and forecast
results.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230807814685/en/
Steven D. Schwartz, Head of Investor Relations (515)
273-3763, sschwartz@american-equity.com
American Equity Investme... (NYSE:AEL)
Historical Stock Chart
From Feb 2025 to Mar 2025
American Equity Investme... (NYSE:AEL)
Historical Stock Chart
From Mar 2024 to Mar 2025
