Athene Holding Ltd. · NYSE:ATH/PA
Athene — Q2 2023 Earnings Presentation
38 slides from Athene's earnings presentation, Aug 3, 2023
Slide 1: Second Quarter 2023 Earnings
Apollo Global Management, Inc. Second Quarter 2023 Earnings
Slide 2: Second Quarter 2023 Financial Highlights
2Q'23 Per Share YTD'23 Per Share GAAP Financial Measures ($ in millions, except per share amounts) Net Income Attributable to Apollo Global Management, Inc. Common Stockholders $599 $1.00 $1,609 $2.67 Segment and Non-GAAP Financial Measures ($ in millions, except per share amounts) Fee Related Earni
Slide 3: GAAP Income Statement (Unaudited)
(In millions, except per share amounts) 2Q'22 1Q'23 2Q'23 YTD'22 YTD'23 Revenues Asset Management Management fees $375 $414 $452 $711 $866 Advisory and transaction fees, net 110 155 170 176 325 Investment income (loss) (195) 452 138 506 590 Incentive fees 2 15 26 8 41 Retirement Services Premiums 5,
Slide 4: Strong second quarter results position Apollo well to meet 2023 growth targets
Strong second quarter results position Apollo well to meet its 2023 financial growth targets • Record quarterly FRE of $442 million driven by solid management fee growth, strong capital solutions fees, and decelerating expense growth • Record quarterly Normalized SRE1 of $874 million driven by recor
Slide 5: Segment Income
($ in millions, except per share amounts) 2Q'22 1Q'23 2Q'23 YTD'22 YTD'23 Management fees $522 $577 $620 $1,027 $1,197 Capital solutions fees and other, net 103 138 138 167 276 Fee-related performance fees 12 27 35 26 62 Fee-related compensation (187) (211) (212) (362) (423) Non-compensation expense
Slide 6: Normalized Segment Income
($ in millions, except per share amounts) 2Q'22 1Q'23 2Q'23 YTD'22 YTD'23 Management fees $522 $577 $620 $1,027 $1,197 Capital solutions fees and other, net 103 138 138 167 276 Fee-related performance fees 12 27 35 26 62 Fee-related compensation (187) (211) (212) (362) (423) Non-compensation expense
Slide 7: Segment Details
APOLLO Segment Details
Slide 8: Asset Management: Fee Related Earnings
($ in millions, except per share amounts) 2Q'22 1Q'23 2Q'23 % Change vs. 2Q'22 YTD'22 YTD'23 % Change vs. YTD'22 Management Fees Yield $342 $379 $392 14.6% $675 $771 14.2% Hybrid 53 57 62 17.0% 101 119 17.8% Equity1 127 141 166 30.7% 251 307 22.3% Total management fees 522 577 620 18.8% 1,027 1,197
Slide 9: Total AUM and Fee-Generating AUM
Total AUM ($bn) Fee-Generating AUM ($bn) • Total AUM increased $102 billion, or 20%, year-over-year primarily driven by $96 billion of inflows from Asset Management and $58 billion of inflows from Retirement Services as well as mark-to-market appreciation, partially offset by $42 billion of outflows
Slide 10: Inflows
$34 $57 $35 $28 $21 $14 $8 $16 $37$13 $11 $12 $19$3 Asset Management Retirement Services 3Q'22 4Q'22 1Q'23 2Q'23 $75 $65 $57 $131 $128 $154 $25 $32 $31 $38 $71 $59 $6 $37 $13 $18 $28 $37 $48 $55 $27 $7 $72 Asset Management Retirement Services 2018 2019 2020 2021 2022 LTM 2Q'23 • Robust total gross i
Slide 11: Retirement Services: Spread Related Earnings
Note: 2022 amounts for Spread Related Earnings have been retrospectively adjusted in accordance with the requirements of the adoption guidance of the accounting standard relating to LDTI. 1. The increase in interest and other financing costs from 1Q'23 to 2Q'23 was driven by an increase in interest
Slide 12: Retirement Services Inflows by Channel
Retail: Strong sales activity in the second quarter underwritten to attractive returns with continued distribution expansion into financial institutions Flow Reinsurance: Record quarterly inflows driven by existing partnerships and new reinsurance agreements recently coming online in both the US and
Slide 13: Net Spread Bridge and Investment Portfolio Highlights
1.61% 0.29% (0.23)% (0.01)% 1.66% 1Q'23 2Q'23 1.36% 0.29% 0.16% (0.28)% (0.01)% 1.52% 1Q'23 2Q'23 Investment Portfolio Highlights Retirement Services Net Spread Bridge (QoQ) Normalized Retirement Services Net Spread Bridge (QoQ) • 96% of Athene’s fixed income portfolio1 is invested in investment gra
Slide 14: Retirement Services: Alternative Investment Portfolio
Highly Diversified and Strategic • Athene’s $12.2 billion1 alternatives portfolio accounts for ~6% of net invested assets • Growth of alternative investments within the overall portfolio provides dry powder to seed and co-invest in Apollo-managed funds, continue building Apollo's front-end originati
Slide 15: Principal Investing Income
• Realized performance fees of $177 million continue to be relatively light as monetization activity from sizeable flagship private equity funds (Fund VIII & IX) remains prudently delayed amid equity market volatility • Compensation ratio of 85% year-to-date reflects a period of lower realized perfo
Slide 16: Performance Fee AUM and Dry Powder
$64 $46 $81 Yield Hybrid Equity • Performance Fee-Eligible AUM of $191 billion increased 22% year-over-year primarily due to third-party Asset Management fundraising • Performance Fee-Generating AUM of $121 billion increased 35% year-over-year due to positive investment performance in equity and yie
Slide 17: Investment Performance Highlights
Investment Performance Highlights Net Accrued Performance Fee Receivable2 (QoQ) Appreciation / gross returns 2Q'23 YTD'23 Yield Corporate Credit1 2.6% 5.9% Structured Credit 2.3% 5.4% Direct Origination 4.0% 8.8% Hybrid Hybrid Value 4.0% 7.3% Credit Strategies and Accord 3.9% 10.1% Equity Flagship P
Slide 18: HoldCo & Asset Management Summary Balance Sheet Highlights
• Deployed $72 million for opportunistic share repurchases in the second quarter and $232 million year-to-date, while continuing to execute additional repurchases to offset dilution from share issuances under equity incentive plans • Apollo returned a total of $1.3 billion of capital to shareholders
Slide 19: Supplemental Details
APOLLO Supplemental Details
Slide 20: AUM Roll Forward
($ in millions) Yield4 Hybrid Equity Total Beginning Balance $438,070 $58,955 $100,704 $597,729 Inflows 25,774 3,458 5,758 34,990 Outflows3 (13,658) (263) (509) (14,430) Net Flows 12,116 3,195 5,249 20,560 Realizations (3,801) (767) (1,431) (5,999) Market Activity 3,458 1,027 330 4,815 Ending Balanc
Slide 21: Retirement Services Net Spread Detail
(% of average net invested assets) 2Q'22 1Q'23 2Q'23 % Change vs. 2Q'22 YTD'22 YTD'23 % Change vs. YTD'22 Fixed income and other investment income, net 2.97% 4.13% 4.46% 149bps 2.90% 4.30% 140bps Alternative investment income, net 6.38% 6.12% 8.53% 215bps 11.39% 7.33% NM Net Investment Earnings 3.19
Slide 22: Retirement Services Flows and Invested Assets
($ in millions) 2Q'23 YTD'23 Flows by Channel Retail $6,782 $15,360 Flow reinsurance 2,782 4,575 Funding agreements2 148 1,648 Pension group annuities 9,002 9,058 Gross organic inflows3 18,714 30,641 Gross inorganic inflows4 — — Total gross inflows 18,714 30,641 Gross outflows5 (9,135) (16,014) Net
Slide 23: Share Reconciliation
Share Reconciliation 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 Total GAAP Common Stock Outstanding 571,028,097 572,670,634 570,276,188 567,394,604 566,809,153 Non-GAAP Adjustments: Vested RSUs 15,393,631 13,492,457 15,656,775 12,781,851 12,771,092 Unvested RSUs Eligible for Dividend Equivalents 14,097,587 14,18
Slide 24: Reconciliations and Disclosures
Reconciliations and Disclosures
Slide 25: Fund Performance Summary
(in millions, except IRR) Vintage Year Total AUM Committed Capital Total Invested Capital Realized Value Remaining Cost Unrealized Value Total Value Gross IRR Net IRR Equity: Fund IX 2018 $ 34,518 $ 24,729 $ 19,565 $ 9,097 $ 15,068 $ 24,757 $ 33,854 36 % 24 % Fund VIII 2013 9,536 18,377 16,536 22,01
Slide 26: Condensed Consolidated Balance Sheet: Assets
($ in millions, except share amounts) 4Q'22 2Q'23 Assets Asset Management Cash and cash equivalents $1,201 $1,469 Restricted cash and cash equivalents 1,048 270 Investments 5,582 5,498 Assets of consolidated variable interest entities Cash and cash equivalents 110 119 Investments 2,369 2,973 Other a
Slide 27: Condensed Consolidated Balance Sheet: Liabilities and Equity
($ in millions, except share amounts) 4Q'22 2Q'23 Liabilities Asset Management Accounts payable, accrued expenses, and other liabilities $2,975 $3,286 Due to related parties 998 892 Debt 2,814 2,812 Liabilities of consolidated variable interest entities Notes payable 50 268 Other liabilities 1,899 1
Slide 28: Reconciliation of GAAP to Non-GAAP Financial Measures
($ in millions) 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 YTD'22 YTD'23 GAAP Net income (loss) attributable to Apollo Global Management, Inc. Common Stockholders $(1,637) $(563) $640 $1,010 $599 $(2,038) $1,609 Net income (loss) attributable to non-controlling interests (969) (286) 367 528 151 (1,627) 679 GAAP
Slide 29: Reconciliation of GAAP to Non-GAAP Financial Measures: Annual
Year ended December 31, ($ in millions) 2014 2015 2016 2017 2018 2019 2020 2021 2022 GAAP Net income (loss) attributable to Apollo Global Management, Inc. Common Stockholders $168 $134 $403 $616 $(42) $807 $120 $1,802 $(1,961) Preferred dividends — — — 14 32 37 37 37 — Net income (loss) attributable
Slide 30: Reconciliation of GAAP to Non-GAAP Financial Measures - cont'd
($ in millions) 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 YTD'22 YTD'23 Total Consolidated Revenues (GAAP) $ 2,286 $ 2,979 $ 4,841 $ 5,301 $ 13,702 $ 3,148 $ 19,003 Retirement services revenue (GAAP) (1,994) (2,502) (3,950) (4,265) (12,916) (1,747) (17,181) Equity awards granted by unconsolidated related partie
Slide 31: Athene Reconciliation of Net Income to Non-GAAP Measures
Year ended December 31, ($ in millions) 2014 2015 2016 2017 2018 2019 2020 2021 Net income available to Athene Holding Ltd. common shareholders $ 471 $ 579 $ 773 $ 1,358 $ 1,053 $ 2,136 $ 1,446 $ 3,718 Preferred stock dividends — — — — — 36 95 141 Net income (loss) attributable to noncontrolling int
Slide 32: Net Alternative Investments and Net Invested Assets Reconciliation
($ in millions) 2Q'23 Investment funds, including related parties and VIEs $ 15,868 Equity securities 472 Certain equity securities included in AFS or trading securities 193 Investment funds within funds withheld at interest 864 Royalties 15 Net assets of the VIE, excluding investment funds (3,306)
Slide 33: Non-GAAP Financial Measure Definitions
Apollo discloses the following financial measures that are calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles in the United States of America (“Non-GAAP”): • “Segment Income”, or “SI”, is the key performance measure used by m
Slide 34: Definitions: Assets Under Management
• “Assets Under Management”, or “AUM”, refers to the assets of the funds, partnerships and accounts to which Apollo provides investment management, advisory, or certain other investment-related services, including, without limitation, capital that such funds, partnerships and accounts have the right
Slide 35: Definitions: ACRA, ADIP and Other Terms
• “ACRA” refers to Athene Co-Invest Reinsurance Affiliate Holding Ltd, together with its subsidiaries, and Athene Co-Invest Reinsurance Affiliate Holding 2 Ltd, together with its subsidiaries. • “ADIP” refers to Apollo/Athene Dedicated Investment Program and Apollo/Athene Dedicated Investment Progra
Slide 36: Definitions: Gross IRR and Other Terms
• "Gross IRR" of infrastructure funds represents the cumulative investment-related cash flows in the fund itself (and not any one investor in the fund), on the basis of the actual timing of cash inflows and outflows (for unrealized investments assuming disposition on June 30, 2023 or other date spec
Slide 37: Definitions: Other Operating Expenses and Perpetual Capital
• “Other operating expenses” within the Principal Investing segment represents expenses incurred in the normal course of business and includes allocations of non-compensation expenses related to managing the business. • “Other operating expenses” within the Retirement Services segment represents exp
Slide 38: Forward-Looking Statements
Forward-Looking Statements In this presentation, references to “Apollo,” “we,” “us,” “our” and the “Company” refer collectively to Apollo Global Management, Inc. and its subsidiaries, or as the context may otherwise require. This presentation may contain forward-looking statements that are within th