Exhibit 99.2
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement
March 31, 2021
A. Financial Highlights | |
Non-GAAP Financial Measures |
Reconciliation from Net Income Available to Common Stockholders to Non-GAAP | 5 |
Operating Income Available to Common Stockholders and Non-GAAP Operating Income | |
Available to Common Stockholders, Excluding Notable Items | |
Summary of Adjustments to Arrive at Non-GAAP Operating Income Available to Common | 6 |
Stockholders | |
Quarterly Summary - Reconciliation from Net Income (Loss) Available to Common | 7 |
Stockholders to Non-GAAP Operating Income (Loss) Available to Common Stockholders | |
and Non-GAAP Operating Income Available to Common Stockholders, Excluding | |
Notable Items | |
Quarterly Summary - Summary of Adjustments to Arrive at Non-GAAP Operating Income | 9 |
(Loss) Available to Common Stockholders | |
Capitalization/Book Value per Common Share | 10 |
Spread Results | 11 |
B. Product Summary | |
Summary of Cost of Money for Deferred Annuities | 11 |
Annuity Account Balance Rollforward | 11 |
Annuity Deposits by Product Type | 12 |
Surrender Charge Protection and Account Values by Product Type | 12 |
Annuity Liability Characteristics | 13 |
- Investment Summary
Summary of Invested Assets | 16 | |
Credit Quality of Fixed Maturity Securities | 16 | |
Watch List Securities | 16 | |
Fixed Maturity Securities by Sector | 17 | |
Mortgage Loans on Real Estate | 18 | |
D. | Shareholder Information | 20 |
E. | Research Analyst Coverage | 21 |
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - March 31, 2021
Unaudited (Dollars in thousands)
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2021 | December 31, 2020 (a) | ||||
Assets | |||||
Investments: | |||||
Fixed maturity securities, available for sale, at fair value | $ | 45,690,341 | $ | 47,538,893 | |
Mortgage loans on real estate | 4,290,602 | 4,165,489 | |||
Derivative instruments | 1,509,892 | 1,310,954 | |||
Other investments | 908,437 | 590,078 | |||
Total investments | 52,399,272 | 53,605,414 | |||
Cash and cash equivalents | 11,087,125 | 9,095,522 | |||
Coinsurance deposits | 4,646,406 | 4,844,927 | |||
Accrued investment income | 410,112 | 398,082 | |||
Deferred policy acquisition costs | 2,470,851 | 2,225,199 | |||
Deferred sales inducements | 1,587,653 | 1,448,375 | |||
Income taxes recoverable | - | 862 | |||
Other assets | 76,247 | 70,198 | |||
Total assets | $ | 72,677,666 | $ | 71,688,579 | |
Liabilities and Stockholders' Equity | |||||
Liabilities: | |||||
Policy benefit reserves | $ | 63,519,546 | $ | 62,352,882 | |
Other policy funds and contract claims | 234,468 | 240,904 | |||
Notes payable | 495,811 | 495,668 | |||
Subordinated debentures | 78,187 | 78,112 | |||
Deferred income taxes | 376,895 | 504,000 | |||
Income taxes payable | 19,599 | - | |||
Other liabilities | 2,024,400 | 1,668,025 | |||
Total liabilities | 66,748,906 | 65,339,591 | |||
Stockholders' equity: | |||||
Preferred stock, Series A | 16 | 16 | |||
Preferred stock, Series B | 12 | 12 | |||
Common stock | 95,483 | 95,721 | |||
Additional paid-in capital | 1,687,669 | 1,681,127 | |||
Accumulated other comprehensive income | 1,505,260 | 2,203,557 | |||
Retained earnings | 2,640,320 | 2,368,555 | |||
Total stockholders' equity | 5,928,760 | 6,348,988 | |||
Total liabilities and stockholders' equity | $ | 72,677,666 | $ | 71,688,579 | |
- The December 31, 2020 balance sheet includes reclassifications from previously reported amounts for the correction of an immaterial error in the calculation of the impact of unrealized gains and losses on lifetime income benefit reserves which was determined in the first quarter of 2021. This is reflected in deferred policy acquisition costs, deferred sales inducements, policy benefit reserves, deferred income taxes and accumulated other comprehensive income
Page 1
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - March 31, 2021
Unaudited (Dollars in thousands, except per share data)
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
March 31, | |||||
2021 | 2020 | ||||
Revenues: | |||||
Premiums and other considerations | $ | 13,213 | $ | 7,664 | |
Annuity product charges | 60,082 | 59,549 | |||
Net investment income | 497,190 | 573,318 | |||
Change in fair value of derivatives | 396,305 | (941,874) | |||
Net realized losses on investments | (4,583) | (20,336) | |||
Loss on extinguishment of debt | - | (2,024) | |||
Total revenues | 962,207 | (323,703) | |||
Benefits and expenses: | |||||
Insurance policy benefits and change in future policy benefits | 16,424 | 10,072 | |||
Interest sensitive and index product benefits | 476,595 | 400,219 | |||
Amortization of deferred sales inducements | 122,975 | 73,591 | |||
Change in fair value of embedded derivatives | (282,413) | (1,250,061) | |||
Interest expense on notes payable | 6,393 | 6,385 | |||
Interest expense on subordinated debentures | 1,326 | 1,588 | |||
Amortization of deferred policy acquisition costs | 203,823 | 120,702 | |||
Other operating costs and expenses | 55,865 | 43,626 | |||
Total benefits and expenses | 600,988 | (593,878) | |||
Income before income taxes | 361,219 | 270,175 | |||
Income tax expense | 78,535 | 27,228 | |||
Net income | 282,684 | 242,947 | |||
Less: Preferred stock dividends | 10,919 | 6,611 | |||
Net income available to common stockholders | $ | 271,765 | $ | 236,336 | |
Earnings per common share | $ | 2.84 | $ | 2.58 | |
Earnings per common share - assuming dilution | $ | 2.82 | $ | 2.57 | |
Weighted average common shares outstanding (in thousands): | |||||
Earnings per common share | 95,735 | 91,644 | |||
Earnings per common share - assuming dilution | 96,216 | 92,021 |
Page 2
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - March 31, 2021
Unaudited (Dollars in thousands, except per share data)
Quarterly Summary - Most Recent 5 Quarters
Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | Q1 2020 | ||||||||||
Revenues: | ||||||||||||||
Traditional life insurance premiums | $ | 706 | $ | 701 | $ | 708 | $ | 722 | $ | 823 | ||||
Life contingent immediate annuity considerations | 12,507 | 9,578 | 9,699 | 10,310 | 6,841 | |||||||||
Surrender charges | 19,481 | 17,009 | 16,447 | 19,390 | 19,705 | |||||||||
Lifetime income benefit rider fees | 40,601 | 48,954 | 45,830 | 44,048 | 39,844 | |||||||||
Net investment income | 497,190 | 521,725 | 543,331 | 543,704 | 573,318 | |||||||||
Change in fair value of derivatives | 396,305 | 443,867 | 205,011 | 327,662 | (941,874) | |||||||||
Net realized losses on investments | (4,583) | (12,135) | (22,321) | (25,888) | (20,336) | |||||||||
Loss on extinguishment of debt | - | - | - | - | (2,024) | |||||||||
Total revenues | 962,207 | 1,029,699 | 798,705 | 919,948 | (323,703) | |||||||||
Benefits and expenses: | ||||||||||||||
Traditional life insurance policy benefits and change in future policy | 1,049 | 1,091 | 655 | 702 | 621 | |||||||||
benefits | ||||||||||||||
Life contingent immediate annuity benefits and change in future policy | 15,375 | 11,975 | 12,618 | 12,629 | 9,451 | |||||||||
benefits | ||||||||||||||
Interest sensitive and index product benefits (a) | 476,595 | 325,912 | 576,147 | 240,992 | 400,219 | |||||||||
Amortization of deferred sales inducements (b)(d) | 122,975 | 22,768 | 416,983 | (75,178) | 73,591 | |||||||||
Change in fair value of embedded derivatives (c)(d) | (282,413) | 568,836 | (1,732,497) | 1,126,935 | (1,250,061) | |||||||||
Interest expense on notes payable | 6,393 | 6,391 | 6,388 | 6,388 | 6,385 | |||||||||
Interest expense on subordinated debentures | 1,326 | 1,325 | 1,323 | 1,321 | 1,588 | |||||||||
Amortization of deferred policy acquisition costs (b)(d) | 203,823 | 26,145 | 622,596 | (119,889) | 120,702 | |||||||||
Other operating costs and expenses | 55,865 | 55,321 | 42,738 | 41,951 | 43,626 | |||||||||
Total benefits and expenses | 600,988 | 1,019,764 | (53,049) | 1,235,851 | (593,878) | |||||||||
Income (loss) before income taxes | 361,219 | 9,935 | 851,754 | (315,903) | 270,175 | |||||||||
Income tax expense (benefit) (e) | 78,535 | 1,193 | 184,554 | (68,474) | 27,228 | |||||||||
Net income (loss) (a)(b)(c)(d)(e) | 282,684 | 8,742 | 667,200 | (247,429) | 242,947 | |||||||||
Less: Preferred stock dividends | 10,919 | 15,004 | 5,950 | 5,950 | 6,611 | |||||||||
Net income (loss) available to common stockholders (a)(b)(c)(d)(e) | $ | 271,765 | $ | (6,262) | $ | 661,250 | $ | (253,379) | $ | 236,336 | ||||
Earnings (loss) per common share | $ | 2.84 | $ | (0.07) | $ | 7.20 | $ | (2.76) | $ | 2.58 | ||||
Earnings (loss) per common share - assuming dilution (a)(b)(c)(d)(e) | $ | 2.82 | $ | (0.07) | $ | 7.17 | $ | (2.76) | $ | 2.57 | ||||
Weighted average common shares outstanding (thousands): | ||||||||||||||
Earnings (loss) per common share | 95,735 | 92,904 | 91,861 | 91,803 | 91,644 | |||||||||
Earnings (loss) per common share - assuming dilution | 96,216 | 93,352 | 92,163 | 92,027 | 92,021 |
- Q3 2020 includes expense from the revision of assumptions used in determining reserves held for lifetime income benefit riders. The impact increased interest sensitive and index products by $285.8 million and decreased both net income and net income available to common stockholders by $224.4 million and decreased earnings per common share - assuming dilution by $2.44 per share.
- Q3 2020 includes expense from the revision of assumptions which increased amortization of deferred sales inducements and deferred policy acquisition costs by $391.4 million and $589.2 million, respectively, and decreased both net income and net income available to common stockholders by $769.8 million and decreased earnings per common share - assuming dilution by $8.35 per share.
- Q3 2020 includes a benefit from the revision of assumptions used in determining the embedded derivative component of our fixed index annuity policy benefit reserves. The impact decreased change in fair value of embedded derivatives by $2,111.1 million and increased both net income and net income available to common stockholders by $1,657.2 million and increased earnings per common share - assuming dilution by $17.98 per share.
- Q2 2020 includes a benefit from the revision of assumptions used in determining the embedded derivative component of our fixed index annuity policy benefit reserves. The impact decreased change in fair value of embedded derivatives by $230.1 million, increased amortization of deferred sales inducements and deferred policy acquisition costs by $36.7 million and $57.6 million, respectively, and decreased both net loss and net loss available to common stockholders by $106.5 million and reduced loss per common share - assuming dilution by $1.16 per share.
Page 3
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - March 31, 2021
Unaudited (Dollars in thousands, except per share data)
- Q1 2020 includes a tax benefit related to the provision of the Coronavirus Aid, Relief, and Economic Security Act, ("CARES Act") which was signed into legislation on March 27, 2020 and allows net operating losses for 2018 through 2020 to be carried back to previous tax years in which a 35% statutory tax rate was in effect. The impact reduced income tax expense and increased both net income and net income available to common stockholders by $30.8 million and increased earnings per common share - assuming dilution by $0.33 per share.
Page 4
This is an excerpt of the original content. To continue reading it, access the original document here.
Attachments
- Original document
- Permalink
Disclaimer
American Equity Investment Life Holding Company published this content on 05 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 May 2021 21:26:01 UTC.