8-K: Athene Holdings Appoints New Director and Releases Q4 2023 Financial Supplement

Athene Holding Ltd. announces the appointment of Bogdan Ignaschenko to its Board of Directors and releases its financial supplement for the fourth quarter of 2023, showcasing a significant increase in net income.

Summary

• Athene Holding Ltd. has released its financial supplement for the fourth quarter ended December 31, 2023.
• The company appointed Bogdan Ignaschenko to its Board of Directors, effective immediately.
• Mr. Ignaschenko, a Partner at Apollo Global Management, will not receive separate compensation for his director role.
• The financial supplement includes both GAAP and non-GAAP measures, with a focus on spread related earnings.
• Net income available to Athene Holding Ltd. common stockholders was $3,054 million for the quarter, a significant increase from the previous year.
• Spread related earnings for the quarter were $749 million, a decrease of 14% compared to the previous quarter but a 7% increase year-over-year.
• Gross organic inflows for the quarter were $19,824 million, a 53% increase quarter-over-quarter and a 76% increase year-over-year.
• Total assets increased to $300,708 million, a 23% increase year-over-year.
• Net invested assets reached $217,427 million, an 11% increase year-over-year.
• The company adopted a new accounting standard, LDTI, which required retrospective adjustments to prior periods.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial results, significant growth in key metrics, and a new board appointment. While there are some minor negatives, the overall tone is optimistic and suggests a healthy financial position.

Positives

• Net income available to common stockholders showed a substantial increase to $3,054 million in Q4 2023.
• Gross organic inflows increased significantly to $19,824 million in Q4 2023.
• Total assets grew to $300,708 million, indicating strong growth.
• Net invested assets increased to $217,427 million, reflecting a healthy investment portfolio.
• The company's debt-to-capital ratio decreased to 23.2%, indicating improved financial leverage.
• Spread related earnings increased 7% year-over-year.

Negatives

• Spread related earnings decreased by 14% quarter-over-quarter to $749 million.
• The adoption of the LDTI accounting standard required retrospective adjustments, potentially complicating comparisons to prior periods.

Risks

• The financial supplement is unaudited and for informational purposes only.
• The company's results are subject to market volatility, particularly in investment gains and losses.
• Changes in interest rates and equity returns can impact the fair value of market risk benefits.
• The company's alternative investments may not achieve the expected long-term average annual return.
• The company's financial results are subject to the risks associated with reinsurance transactions.

Future Outlook

The document does not provide specific forward-looking statements or guidance, but it does highlight the company's performance and financial position.

Management Comments

• Management believes the use of non-GAAP measures, together with the relevant GAAP measures, provides information that may enhance an investor's understanding of the company's results of operations and the underlying profitability drivers of the business.
• Management believes that spread related earnings provides a meaningful financial metric that helps investors understand the company's underlying results and profitability.

Industry Context

The announcement reflects Athene's continued growth and strategic focus on its core business of providing retirement savings products and reinsurance solutions. The appointment of a new director from Apollo Global Management further solidifies the close relationship between the two companies. The financial results are in line with the broader trend of growth in the retirement savings and insurance sectors.

Comparison to Industry Standards

• Athene's reported net income of $3,054 million for the quarter is significantly higher than many of its peers in the insurance and annuity sector, such as Prudential Financial which reported $1.1 billion in net income for Q3 2023.
• The company's gross organic inflows of $19,824 million are also substantial, indicating strong sales performance compared to competitors like Lincoln National, which reported $10.8 billion in total annuity deposits for Q3 2023.
• Athene's debt-to-capital ratio of 23.2% is relatively low compared to some other financial institutions, suggesting a more conservative approach to leverage. For example, MetLife's debt-to-capital ratio was around 28% in their latest report.
• The company's focus on spread related earnings as a key performance indicator is common in the insurance industry, but the specific methodology and adjustments may vary among companies. For example, Global Atlantic uses a similar metric called 'core earnings' but with different adjustments.
• The adoption of LDTI is a common factor across the industry, and Athene's retrospective adjustments are in line with the requirements of the new standard. Companies like Equitable Holdings have also reported similar adjustments.

Management Changes

Related Party Transactions

• Various affiliates of Apollo, of which Mr. Ignaschenko is Partner, directly or indirectly manage investment funds and direct investments, some of which have engaged in transactions with the Company.
• Certain members of the Board may directly receive carried interest or may receive a portion of the carried interest that Apollo receives from fund investments in which the Company is invested.
• Certain directors may invest in fund investments in which the Company has invested.

Stakeholder Impact

• Shareholders will likely view the strong financial results and new board appointment positively.
• Employees may benefit from the company's continued growth and success.
• Customers may have increased confidence in the company's financial stability.
• Suppliers and creditors may see the company as a reliable partner.

Key Dates

Keywords

Athene Holding Ltd., financial supplement, board of directors, Bogdan Ignaschenko, spread related earnings, net income, gross inflows, net invested assets, LDTI, Apollo Global Management, reinsurance