Athene Holding Ltd. · NYSE:ATH/PA
Athene — Q4 2023 Earnings Presentation
38 slides from Athene's earnings presentation, Feb 8, 2024
Slide 1: Fourth Quarter and Full Year 2023 Earnings
Apollo Global Management, Inc. Fourth Quarter and Full Year 2023 Earnings
Slide 2: Fourth Quarter and Full Year 2023 Financial Highlights
4Q'23 Per Share FY'23 Per Share GAAP Financial Measures ($ in millions, except per share amounts) Net Income Attributable to Apollo Global Management, Inc. Common Stockholders $2,861 $4.75 $5,130 $8.53 Segment and Non-GAAP Financial Measures ($ in millions, except per share amounts) Fee Related Earn
Slide 3: Consolidated Statements of Operations
(In millions, except per share amounts) 4Q'22 3Q'23 4Q'23 FY'22 FY'23 Revenues Asset Management Management fees $403 $462 $444 $1,503 $1,772 Advisory and transaction fees, net 157 157 141 443 623 Investment income (loss) 321 292 150 796 1,032 Incentive fees 10 18 21 27 80 Retirement Services Premium
Slide 4: Fourth quarter results complete a strong year of growth and execution against 2023 targets
Fourth quarter results complete a strong year of growth and execution against 2023 targets • Solid quarterly and record annual FRE of $457 million and $1.8 billion, respectively, driven by strong fee revenue growth and well-controlled expenses, which together generated significant margin expansion •
Slide 5: Segment Income and Adjusted Net Income
($ in millions, except per share amounts) 4Q'22 3Q'23 4Q'23 FY'22 FY'23 Management fees $561 $648 $635 $2,134 $2,480 Capital solutions fees and other, net 142 146 116 414 538 Fee-related performance fees 26 40 44 72 146 Fee-related compensation (198) (212) (200) (754) (835) Non-compensation expenses
Slide 6: Segment Income Excluding Notable Items
($ in millions, except per share amounts) 4Q'22 3Q'23 4Q'23 FY'22 FY'23 Management fees $561 $648 $635 $2,134 $2,480 Capital solutions fees and other, net 142 146 116 414 538 Fee-related performance fees 26 40 44 72 146 Fee-related compensation (198) (212) (200) (754) (835) Non-compensation expenses
Slide 7: Segment Details
APOLLO Segment Details
Slide 8: Asset Management: Fee Related Earnings
• Management fees increased 16% in 2023 driven by robust growth from Retirement Services clients, the activation of the investment period for the tenth vintage of our flagship private equity funds ("Fund X"), other third-party asset management fundraising, and solid levels of capital deployment • Ca
Slide 9: Total AUM and Fee-Generating AUM
• Total AUM increased $103 billion, or 19%, year-over-year primarily driven by $91 billion of inflows from Asset Management and $66 billion of inflows from Retirement Services, as well as mark-to-market appreciation, partially offset by $50 billion of outflows, primarily from normal course activity
Slide 10: Inflows by Quarter and Year
$57 $35 $33 $32 $8 $16 $20 $10 $37 $12 $19 $13 $20 $2 Asset Management Retirement Services 1Q'23 2Q'23 3Q'23 4Q'23 $65 $57 $131 $75 $128 $157 $25 $32 $31 $38 $71 $55 $6 $37 $13 $18 $28 $37 $48 $63 $27 $7 $72 Asset Management Retirement Services 2018 2019 2020 2021 2022 2023 • Robust total gross infl
Slide 11: Retirement Services: Spread Related Earnings
• Spread Related Earnings grew 26% in 2023 driven by higher floating rate income, robust organic growth trends and strong new business profitability, partially offset by lower alternative net investment income • Spread Related Earnings, Excluding Notable Items in 2023 included a 7.2% return on Athen
Slide 12: Retirement Services: Strong Growth Profile
$3 $9 $13 $28 $48 $63 3 5 7 8 21 35 4 2 6 6 11 3 6 11 10 8 10 7 2014 2016 2018 2020 2022 2023 1. Comprised of funding agreements issued under funding agreement backed notes (“FABN”) and funding agreement backed repurchase agreement (“FABR”) programs, funding agreements issued to the Federal Home Loa
Slide 13: Investment Portfolio Highlights and Net Spread Bridge
1.51% 0.12% (0.07)% (0.16)% 0.01% 1.41% 3Q'23 4Q'23 1.68% 0.12% (0.07)% (0.33)% 0.01% 1.41% 3Q'23 4Q'23 Investment Portfolio Highlights Retirement Services Net Spread Bridge (QoQ) Retirement Services Net Spread, Excluding Notable Items Bridge (QoQ) • 97% of Athene’s fixed income portfolio1 is invest
Slide 14: Principal Investing and Realized Performance Fees
1. Realized investment income for 4Q'23 includes $42 million of losses related to the liquidations of Apollo Strategic Growth Capital II and Acropolis Infrastructure Acquisition Corp., special purpose acquisition companies ("SPACs") sponsored by Apollo. • Realized performance fees of $269 million be
Slide 15: Performance Fee AUM and Dry Powder
$73 $46 $82 Yield Hybrid Equity • Performance Fee-Eligible AUM of $202 billion increased 12% year-over-year primarily due to third-party Asset Management fundraising • Performance Fee-Generating AUM of $128 billion increased 36% year-over-year due to positive investment performance in Equity, Hybrid
Slide 16: Investment Performance Highlights
Investment Performance Highlights Net Accrued Performance Fee Receivable2 (QoQ) Appreciation / gross returns 4Q'23 FY'23 Yield Corporate Credit1 3.2% 12.3% Structured Credit 4.7% 14.3% Direct Origination 5.4% 19.8% Hybrid Hybrid Value 3.6% 15.4% Credit Strategies and Accord 3.1% 15.5% Equity Flagshi
Slide 17: HoldCo and Asset Management Summary Balance Sheet
• Deployed $804 million for total share buybacks in 2023, including $232 million for opportunistic share repurchases in addition to repurchases to offset dilution from share issuances under equity incentive plans • Apollo intends to distribute an annual dividend of $1.85 per share of common stock, u
Slide 18: Supplemental Details
APOLLO Supplemental Details
Slide 19: AUM Roll Forward
($ in millions) Yield5 Hybrid Equity Total Beginning Balance $460,502 $61,417 $109,240 $631,159 Inflows 28,936 2,477 874 32,287 Outflows3 (12,602) (500) (922) (14,024) Net Flows 16,334 1,977 (48) 18,263 Realizations4 (4,966) (2,194) (2,322) (9,482) Market Activity 8,582 1,263 991 10,836 Ending Balan
Slide 20: Retirement Services Net Spread
(% of average net invested assets) 4Q'22 3Q'23 4Q'23 % Change vs. 4Q'22 FY'22 FY'23 % Change vs. FY'22 Fixed income and other net investment income 3.76% 4.57% 4.66% 90bps 3.22% 4.45% 123bps Alternative net investment income 10.55% 7.75% 6.47% NM 10.42% 7.22% NM Net Investment Earnings 4.19% 4.76% 4
Slide 21: Retirement Services Flows
• Record quarterly organic inflows and lower-than-projected outflows in the fourth quarter • Strategic third-party sidecar capital (ADIP) enables Athene to grow in a highly capital efficient manner, supporting nearly 35% of Athene's growth in 2023 ($ in millions) 4Q'23 FY'23 Flows by Channel Retail
Slide 22: Share Reconciliation
Share Reconciliation 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 Total GAAP Common Stock Outstanding 570,276,188 567,394,604 566,809,153 567,565,120 567,762,932 Non-GAAP Adjustments: Mandatory Convertible Preferred Stock1 — — — 15,999,683 15,564,983 Vested RSUs 15,656,775 12,781,851 12,771,092 12,502,457 22,072,3
Slide 23: Reconciliations and Disclosures
Reconciliations and Disclosures
Slide 24: 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 X 2023 $ 19,697 $ 19,877 $ 3,522 $ 375 $ 3,437 $ 3,632 $ 4,007 NM4 NM4 Fund IX 2018 34,767 24,729 20,853 10,119 15,580 2
Slide 25: Condensed Consolidated Balance Sheet: Assets
($ in millions, except share amounts) 4Q'22 4Q'23 Assets Asset Management Cash and cash equivalents $1,201 $2,748 Restricted cash and cash equivalents 1,048 2 Investments 5,582 5,502 Assets of consolidated variable interest entities Cash and cash equivalents 110 62 Investments 2,369 1,640 Other asse
Slide 26: Condensed Consolidated Balance Sheet: Liabilities and Equity
($ in millions, except share amounts) 4Q'22 4Q'23 Liabilities Asset Management Accounts payable, accrued expenses, and other liabilities $2,975 $3,338 Due to related parties 998 870 Debt 2,814 3,883 Liabilities of consolidated variable interest entities Notes payable 50 — Other liabilities 1,899 1,1
Slide 27: Reconciliation of GAAP to Non-GAAP Financial Measures
($ in millions) 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 FY'22 FY'23 GAAP Net income (loss) attributable to Apollo Global Management, Inc. Common Stockholders $640 $1,010 $599 $660 $2,861 $(1,961) $5,130 Preferred dividends — — — 22 24 — 46 Net income (loss) attributable to non-controlling interests 367 528 15
Slide 28: Reconciliation of GAAP to Non-GAAP Financial Measures (annual)
Year ended December 31, ($ 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 $(1,961) Preferred dividends — — — 14 32 37 37 37 — Net income (loss) attributable
Slide 29: Reconciliation of GAAP to Non-GAAP Financial Measures - cont'd
($ in millions) 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 FY'22 FY'23 Total Consolidated Revenues (GAAP) $ 4,841 $ 5,301 $ 13,702 $ 2,595 $ 11,046 $ 10,968 $ 32,644 Retirement services revenue (GAAP) (3,950) (4,265) (12,916) (1,666) (10,290) (8,199) (29,137) Equity awards granted by unconsolidated related parti
Slide 30: Reconciliation of Athene 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 stockholders $ 471 $ 579 $ 773 $ 1,358 $ 1,053 $ 2,136 $ 1,446 $ 3,718 Preferred stock dividends — — — — — 36 95 141 Net income (loss) attributable to non-controlling in
Slide 31: Reconciliation of Net Invested Assets
($ in millions) 4Q'23 Total investments, including related parties $ 238,941 Derivative assets (5,298) Cash and cash equivalents (including restricted cash) 14,781 Accrued investment income 1,933 Net receivable (payable) for collateral on derivatives (2,835) Reinsurance impacts (572) VIE assets, lia
Slide 32: Definitions: Segment Income
• “Segment Income”, or “SI”, is the key performance measure used by management in evaluating the performance of the asset management, retirement services, and principal investing segments. Management uses Segment Income to make key operating decisions such as the following: ▪ decisions related to th
Slide 33: Definitions: Adjusted Net Income and AUM
• "Adjusted Net Income, Excluding Notable Items" represents ANI with an adjustment related to our Retirement Services segment to exclude notable items. Notable items include unusual variability such as actuarial experience, assumption updates and other insurance adjustments. We use this measure to a
Slide 34: Definitions: Performance Fee-Eligible AUM
• “Performance Fee-Eligible AUM” or “PFEAUM” refers to the AUM that may eventually produce performance fees. All funds for which we are entitled to receive a performance fee allocation or incentive fee are included in Performance Fee-Eligible AUM, which consists of the following: • “Performance Fee-
Slide 35: Definitions: Gross Capital Deployment and Gross IRR
• “Gross Capital Deployment” represents the gross capital that has been invested by the funds and accounts we manage during the relevant period, but excludes certain investment activities primarily related to hedging and cash management functions at the firm. Gross Capital Deployment is not reduced
Slide 36: Definitions: Net IRR
• "Net IRR" of accord series and the European principal finance funds represents the annualized return of a fund after management fees, performance fees allocated to the general partner and certain other expenses, calculated on investors that pay such fees. The terminal value is the net asset value
Slide 37: Notes
Retirement Services Flows & Invested Assets (page 20) 2. Net invested assets are a component of Apollo’s total AUM reported under the Asset Management segment and should not be viewed as additive to total AUM disclosed previously. Refer to the reconciliations of GAAP to Non-GAAP measures on pages 26
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