UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 3, 2016
AMERICAN EQUITY
INVESTMENT LIFE HOLDING COMPANY
(Exact Name of Registrant as Specified in its Charter)
Iowa | 001-31911 | 42-1447959 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Indentification No.) |
6000 Westown Parkway, West Des Moines, Iowa | 50266 |
(Address of Principal Executive Offices) | (Zip Code) |
(515) 221-0002
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On August 3, 2016, the registrant issued a press release announcing its financial results for the quarter ended June 30, 2016, a copy of which is attached as Exhibit 99.1 and is incorporated herein by reference. The registrant's financial supplement for the quarter ended June 30, 2016, is attached as Exhibit 99.2 and is incorporated herein by reference.
The information, including exhibits attached hereto, furnished under this Item 2.02 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as otherwise expressly stated in such filing.
Item 9.01. Financial Statements and Exhibits
(d) | Exhibits | |
The following exhibits are being furnished with this Form 8-K.
Exhibit Number | Description | |
99.1 | Press release dated August 3, 2016, announcing American Equity Investment Life Holding Company's financial results for the quarter ended June 30, 2016. | |
99.2 | American Equity Investment Life Holding Company's Financial Supplement for the quarter ended June 30, 2016. | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: August 3, 2016
AMERICAN EQUITY | |||
INVESTMENT LIFE HOLDING COMPANY | |||
By: | /s/ John M. Matovina | ||
John M. Matovina | |||
Chief Executive Officer and President | |||
EXHIBIT INDEX
Exhibit Number | Description | |
99.1 | Press release dated August 3, 2016, announcing American Equity Investment Life Holding Company's financial results for the quarter ended June 30, 2016. | |
99.2 | American Equity Investment Life Holding Company's Financial Supplement for the quarter ended June 30, 2016. | |
Exhibit 99.1
 | For more information, contact: | |
Steven D. Schwartz, Vice President-Investor Relations | ||
(515) 273-3763, sschwartz@american-equity.com | ||
FOR IMMEDIATE RELEASE | ||
August 3, 2016 | ||
American Equity Reports Second Quarter 2016 Results
Company Highlights
• | Second quarter 2016 net income of $14.7 million or $0.18 per diluted common share |
• | Second quarter 2016 operating income1 of $50.1 million or $0.60 per diluted common share |
• | Second quarter 2016 annuity sales of $2.1 billion, up 17% from second quarter 2015 |
• | Policyholder funds under management of $43.6 billion, up 2.6% from March 31, 2016 |
• | Second quarter 2016 investment spread of 2.62% |
• | Operating income1 return on average equity1 of 10.1% (trailing twelve months) |
• | Estimated risk-based capital (RBC) ratio of 312% at June 30, 2016 compared to 336% at December 31, 2015 |
WEST DES MOINES, Iowa (August 3, 2016) - American Equity Investment Life Holding Company (NYSE: AEL), a leading issuer of fixed index annuities, today reported second quarter 2016 net income of $14.7 million, or $0.18 per diluted common share, compared to net income of $82.8 million, or $1.05 per diluted common share, for second quarter 2015.
Operating income1 for the second quarter of 2016 was $50.1 million, or $0.60 per diluted common share, compared to $50.9 million, or $0.64 per diluted common share, for second quarter 2015.
SALES EXCEED $2 BILLION FOR THIRD CONSECUTIVE QUARTER
Second quarter sales of $2.1 billion were up 17% from the prior year second quarter and matched first quarter 2016 sales. Net sales after coinsurance ceded for the second quarter of 2016 were $1.5 billion, a 13% decrease from $1.7 billion in net sales for the second quarter of 2015 and an 8% decrease from $1.6 billion in net sales in the first quarter of 2016.
Commenting on sales, John Matovina, Chief Executive Officer and President, said: "Our second quarter sales followed a pattern similar to what we saw in the first quarter. Fixed index annuity (FIA) sales by broker-dealers and banks for Eagle Life were up modestly, but increased competition in the independent agent channel translated into an 11% sequential decrease in sales from that channel at American Equity Investment Life Insurance Company (American Equity Life). The overall decrease in FIA sales was offset by a 43% sequential increase in multi-year rate guaranteed annuity (MYGA) sales in all channels. We coinsure 80% of the premiums received from sales of MYGAs and Eagle Life's FIAs which accounts for the 8% decrease in net sales compared to the first quarter of 2016."
Matovina continued, "While gross sales in the first half of 2016 were on a record pace, we anticipate moderation of sales in the second half of the year. FIA sales in July have softened further in the independent agent channel and we've seen a bit of softening from banks and broker-dealers. Monthly sales in 2016 peaked in March and were approximately $500 million in July compared to $644 million in June. Similarly, American Equity Life's pending count peaked at 6,370 cases in mid-April and was down to approximately 3,500 cases at the end of July. A substantial portion of the sales and pending count decreases are from the MYGA products which are not core to American Equity Life but can have a strategic purpose in Eagle Life. Total MYGA sales in July were $72 million compared to $138 million in June and a peak of $239 million in April."
Commenting on Eagle Life, Matovina added: "Expansion in the broker-dealer and bank distribution channels, two channels that represent a significant growth opportunity for FIA sales, has been a key initiative for us. This initiative has greater significance in light of the DOL conflict of interest fiduciary rule which favors sales of FIAs by broker-dealers and banks and poses significant challenges to the sales of FIAs by independent insurance agents. The new DOL rule becomes operational in April 2017 if not otherwise delayed or overturned through litigation. We formed Eagle Life to pursue these distribution opportunities and gained meaningful traction in the first half of 2016. Eagle Life now has selling agreements with 51 distributors, three more agreements than it had 90 days ago. Eagle Life's FIA sales were $377 million in the first half of 2016 implying a realistic opportunity to double its full year 2015 FIA sales of $371 million."
SPREAD DECLINES SLIGHTLY ON LOWER INVESTMENT YIELD
American Equity’s investment spread was 2.62% for the second quarter of 2016 compared to 2.65% for the first quarter of 2016 and 2.84% for the second quarter of 2015. On a sequential basis, the average yield on invested assets declined four basis points while the cost of money declined one basis point..
Average yield on invested assets continued to be unfavorably impacted by the investment of new premiums and portfolio cash flows at rates below the portfolio rate and high cash balances. The average yield on fixed income securities purchased and commercial mortgage loans funded in the second quarter of 2016 was 3.95% compared to 4.14% in the first quarter of 2016. Average yields ranged from 3.73% - 4.03% in the prior year's quarters. The average balance for cash and short-term investments was $1.1 billion during the quarter, compared to $807 million in the first quarter of 2016 and $476 million in the fourth quarter of 2015. The unfavorable impact from the aforementioned items was partially offset by fee income from bond transactions and prepayment income which added 0.04% to second quarter 2016 average yield on invested assets compared to 0.08% from such items in the first quarter of 2016.
The aggregate cost of money for annuity liabilities decreased by one basis point to 1.92% in the second quarter of 2016 compared to 1.93% in the first quarter of 2016. This decrease reflected continued reductions in crediting rates.
Commenting on investment spread, John Matovina said: “We had modest spread compression in the second quarter. Similar to the first quarter, the decrease in the cost of money from reductions in rates on our policy liabilities was less than the decrease in the average yield on investments that resulted from the investment of new premiums and portfolio cash flows in high quality investments with yields below our portfolio rate and the increase in cash and short-term investments during the quarter."
Turning to the outlook for investment spread, Matovina added: "Market conditions changed appreciably at the end of the quarter following the Brexit vote. Investment yields available since then have been significantly lower than what we were able to obtain on investment purchases in the first half of the year. We invested approximately $875 million in July at a weighted average rate of 3.33%. Investment yields at this level will continue to put downward pressure on our investment spread and that of our competitors. We have already observed new money crediting rate and product term adjustments from several of our competitors and expect to announce changes to our new money rates and product terms in the near future. Substantially all of our previous renewal rate adjustments were implemented by the end of the second quarter and new adjustments covering $16 - 17 billion of policyholder account values will begin on September 1, 2016. On an individual policy basis, the effect of these adjustments on the cost of money ranges from 0.10% to 0.40%. In addition, there is $7.4 billion of policyholder account values that will be evaluated for renewal rate adjustments that would begin on December 6, 2016. These adjustments are expected to reduce the 0.52% cost of money differential between existing rates and the guaranteed minimums we had at June 30, 2016.”
PHYSICAL SETTLEMENT OF EQUITY FORWARDS SUPPORTS CAPITAL ADEQUACY
As previously reported, the Company physically settled its two equity forward sales agreements on August 1st, and received $134.7 million in net cash proceeds which were contributed to the capital and surplus of American Equity Life. On a pro forma basis, assuming the net proceeds were invested in securities with a NAIC 1 designation, the estimated RBC ratio at June 30, 2016 was 328%.
In light of the significant sales in 2015 and the first half of 2016, which were appreciably ahead of plan, during the second quarter the Company explored a reinsurance transaction with several potential reinsurance counterparties. Because the Company intended to partially fund the reinsurance transaction with cash and short-term investments, the pricing of the proposed transaction was negatively affected by the declines in investment yields following the Brexit vote in late June and the Company decided not to proceed and suspended the proposed transaction. Although the current outlook for sales has moderated, the Company is considering the issuance of additional debt within parameters that would not jeopardize its current ratings from rating agencies. Additional debt within these parameters would enhance the Company's financial flexibility and can likely be obtained on attractive terms in the current interest rate environment.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future operations, strategies, financial results or other developments, and are subject to assumptions, risks and uncertainties. Statements such as “guidance”, “expect”, “anticipate”, “believe”, “goal”, “objective”, “target”, “may”, “should”, “estimate”, “projects” or similar words as well as specific projections of future results qualify as forward-looking statements. Factors that may cause our actual results to differ materially from those contemplated by these forward looking statements can be found in the company’s Form 10-K filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date the statement was made and the company undertakes no obligation to update such forward-looking statements. There can be no assurance that other factors not currently anticipated by the Company will not materially and adversely affect our results of operations. Investors are cautioned not to place undue reliance on any forward-looking statements made by us or on our behalf.
CONFERENCE CALL
American Equity will hold a conference call to discuss second quarter 2016 earnings on Thursday, August 4, 2016 at 8:00 a.m. CDT. The conference call will be webcast live on the Internet. Investors and interested parties who wish to listen to the call on the Internet may do so at www.american-equity.com.
The call may also be accessed by telephone at 855-865-0606, passcode 47042857 (international callers, please dial 704-859-4382). An audio replay will be available shortly after the call on AEL’s website. An audio replay will also be available via telephone through August 11, 2016 at 855-859-2056, passcode 47042857 (international callers will need to dial 404-537-3406).
ABOUT AMERICAN EQUITY
American Equity Investment Life Holding Company, through its wholly-owned operating subsidiaries, issues fixed annuity and life insurance products, with a primary emphasis on the sale of fixed index and fixed rate annuities. American Equity Investment Life Holding Company, a New York Stock Exchange Listed company (NYSE: AEL), is headquartered in West Des Moines, Iowa. 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.
###
American Equity Investment Life Holding Company
Consolidated Statements of Operations (Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||
Revenues: | |||||||||||||||
Premiums and other considerations | $ | 11,458 | $ | 10,037 | $ | 18,803 | $ | 17,034 | |||||||
Annuity product charges | 41,124 | 32,409 | 77,629 | 61,091 | |||||||||||
Net investment income | 459,830 | 418,176 | 910,656 | 817,845 | |||||||||||
Change in fair value of derivatives | 39,099 | (23,024 | ) | (34,966 | ) | (54,124 | ) | ||||||||
Net realized gains (losses) on investments, excluding other than temporary impairment ("OTTI") losses | 2,737 | 4,324 | 5,424 | 9,203 | |||||||||||
OTTI losses on investments: | |||||||||||||||
Total OTTI losses | (762 | ) | — | (6,780 | ) | (132 | ) | ||||||||
Portion of OTTI losses recognized in (from) other comprehensive income | (3,684 | ) | (828 | ) | (3,360 | ) | (828 | ) | |||||||
Net OTTI losses recognized in operations | (4,446 | ) | (828 | ) | (10,140 | ) | (960 | ) | |||||||
Total revenues | 549,802 | 441,094 | 967,406 | 850,089 | |||||||||||
Benefits and expenses: | |||||||||||||||
Insurance policy benefits and change in future policy benefits | 13,393 | 12,450 | 22,502 | 21,670 | |||||||||||
Interest sensitive and index product benefits | 111,121 | 306,141 | 208,792 | 588,966 | |||||||||||
Amortization of deferred sales inducements | 30,672 | 75,518 | 58,151 | 86,471 | |||||||||||
Change in fair value of embedded derivatives | 284,303 | (219,601 | ) | 550,160 | (168,388 | ) | |||||||||
Interest expense on notes payable | 6,882 | 7,354 | 13,762 | 14,693 | |||||||||||
Interest expense on subordinated debentures | 3,206 | 3,047 | 6,374 | 6,063 | |||||||||||
Amortization of deferred policy acquisition costs | 50,665 | 104,700 | 100,378 | 118,986 | |||||||||||
Other operating costs and expenses | 26,823 | 24,868 | 53,653 | 45,990 | |||||||||||
Total benefits and expenses | 527,065 | 314,477 | 1,013,772 | 714,451 | |||||||||||
Income (loss) before income taxes | 22,737 | 126,617 | (46,366 | ) | 135,638 | ||||||||||
Income tax expense (benefit) | 8,029 | 43,772 | (16,233 | ) | 46,890 | ||||||||||
Net income (loss) | $ | 14,708 | $ | 82,845 | $ | (30,133 | ) | $ | 88,748 | ||||||
Earnings (loss) per common share | $ | 0.18 | $ | 1.07 | $ | (0.37 | ) | $ | 1.15 | ||||||
Earnings (loss) per common share - assuming dilution | $ | 0.18 | $ | 1.05 | $ | (0.37 | ) | $ | 1.12 | ||||||
Weighted average common shares outstanding (in thousands): | |||||||||||||||
Earnings (loss) per common share | 82,517 | 77,237 | 82,323 | 77,140 | |||||||||||
Earnings (loss) per common share - assuming dilution | 83,184 | 79,227 | 83,073 | 79,173 | |||||||||||
Page 1
American Equity Investment Life Holding Company
NON-GAAP FINANCIAL MEASURES
In addition to net income (loss), the Company has consistently utilized operating income and operating income per common share - assuming dilution, non-GAAP financial measures commonly used in the life insurance industry, as economic measures to evaluate its financial performance. Operating income equals net income (loss) adjusted to eliminate the impact of items that fluctuate from quarter to quarter in a manner unrelated to core operations. The most significant adjustments to arrive at operating income eliminate the impact of fair value accounting for our fixed index annuity business and are not economic in nature but rather impact the timing of reported results. The Company believes measures excluding their impact are useful in analyzing operating trends and the combined presentation and evaluation of operating income together with net income (loss) provides information that may enhance an investor’s understanding of its underlying results and profitability.
Reconciliation from Net Income (Loss) to Operating Income (Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||
Net income (loss) | $ | 14,708 | $ | 82,845 | $ | (30,133 | ) | $ | 88,748 | ||||||
Adjustments to arrive at operating income: (a) | |||||||||||||||
Net realized investment (gains) losses, including OTTI | 605 | (2,556 | ) | 1,760 | (5,377 | ) | |||||||||
Change in fair value of derivatives and embedded derivatives - index annuities | 53,129 | (44,403 | ) | 150,678 | 22,133 | ||||||||||
Change in fair value of derivatives and embedded derivatives - debt | 768 | (1,670 | ) | 3,532 | 171 | ||||||||||
Income taxes | (19,108 | ) | 16,729 | (54,737 | ) | (5,912 | ) | ||||||||
Operating income (a non-GAAP financial measure) | $ | 50,102 | $ | 50,945 | $ | 71,100 | $ | 99,763 | |||||||
Per common share - assuming dilution: | |||||||||||||||
Net income (loss) | $ | 0.18 | $ | 1.05 | $ | (0.37 | ) | $ | 1.12 | ||||||
Adjustments to arrive at operating income: | |||||||||||||||
Anti-dilutive effect of net loss | — | — | 0.01 | — | |||||||||||
Net realized investment (gains) losses, including OTTI | — | (0.04 | ) | 0.02 | (0.07 | ) | |||||||||
Change in fair value of derivatives and embedded derivatives - index annuities | 0.64 | (0.56 | ) | 1.81 | 0.28 | ||||||||||
Change in fair value of derivatives and embedded derivatives - debt | 0.01 | (0.02 | ) | 0.04 | — | ||||||||||
Income taxes | (0.23 | ) | 0.21 | (0.65 | ) | (0.07 | ) | ||||||||
Operating income (a non-GAAP financial measure) | $ | 0.60 | $ | 0.64 | $ | 0.86 | $ | 1.26 | |||||||
(a) | Adjustments to net income (loss) to arrive at operating income are presented net of related adjustments to amortization of deferred sales inducements (DSI) and deferred policy acquisition costs (DAC) where applicable. |
Page 2
American Equity Investment Life Holding Company
NON-GAAP FINANCIAL MEASURES
Average Stockholders' Equity and Return on Average Equity (Unaudited)
Return on average equity measures how efficiently the Company generates profits from the resources provided by its net assets. Return on average equity is calculated by dividing net income and operating income for the trailing twelve months by average equity excluding average accumulated other comprehensive income ("AOCI"). The Company excludes AOCI because AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments.
Twelve Months Ended | |||
June 30, 2016 | |||
(Dollars in thousands) | |||
Average Stockholders' Equity 1 | |||
Average equity including average AOCI | $ | 2,300,794 | |
Average AOCI | (641,006 | ) | |
Average equity excluding average AOCI | $ | 1,659,788 | |
Net income | $ | 100,949 | |
Operating income | 167,157 | ||
Return on Average Equity Excluding Average AOCI | |||
Net income | 6.08 | % | |
Operating income | 10.07 | % | |
1 - The net proceeds received from the Company's public offering of common stock in August 2015 are included in the computations of average stockholders' equity on a weighted average basis based upon the number of days they were available to the Company in the twelve month period. The weighted average amount is added to the simple average of (a) stockholders' equity at the beginning of the twelve month period and (b) stockholders' equity at the end of the twelve month period excluding the net proceeds received from the public stock offering in August 2015.
Page 3
Exhibit 99.2
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement
June 30, 2016
A. | Financial Highlights | |
Non-GAAP Financial Measures | ||
B. | Product Summary | |
C. | Investment Summary | |
D. | ||
E. | ||
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
June 30, 2016 | December 31, 2015 | ||||||
Assets | |||||||
Investments: | |||||||
Fixed maturity securities: | |||||||
Available for sale, at fair value | $ | 39,863,803 | $ | 36,421,839 | |||
Held for investment, at amortized cost | 76,722 | 76,622 | |||||
Equity securities, available for sale, at fair value | 7,813 | 7,828 | |||||
Mortgage loans on real estate | 2,451,375 | 2,435,257 | |||||
Derivative instruments | 576,262 | 337,256 | |||||
Other investments | 292,776 | 291,530 | |||||
Total investments | 43,268,751 | 39,570,332 | |||||
Cash and cash equivalents | 1,547,041 | 397,749 | |||||
Coinsurance deposits | 4,120,911 | 3,187,470 | |||||
Accrued investment income | 377,393 | 362,104 | |||||
Deferred policy acquisition costs | 2,417,192 | 2,905,136 | |||||
Deferred sales inducements | 1,843,672 | 2,232,148 | |||||
Deferred income taxes | — | 232,683 | |||||
Income taxes recoverable | 35,677 | 29,599 | |||||
Other assets | 110,691 | 112,171 | |||||
Total assets | $ | 53,721,328 | $ | 49,029,392 | |||
Liabilities and Stockholders' Equity | |||||||
Liabilities: | |||||||
Policy benefit reserves | $ | 49,432,481 | $ | 45,495,431 | |||
Other policy funds and contract claims | 304,827 | 324,850 | |||||
Notes payable | 393,739 | 393,227 | |||||
Subordinated debentures | 241,650 | 241,452 | |||||
Deferred income taxes | 99,194 | — | |||||
Other liabilities | 636,047 | 629,897 | |||||
Total liabilities | 51,107,938 | 47,084,857 | |||||
Stockholders' equity: | |||||||
Common stock | 82,279 | 81,354 | |||||
Additional paid-in capital | 636,861 | 630,367 | |||||
Accumulated other comprehensive income | 893,232 | 201,663 | |||||
Retained earnings | 1,001,018 | 1,031,151 | |||||
Total stockholders' equity | 2,613,390 | 1,944,535 | |||||
Total liabilities and stockholders' equity | $ | 53,721,328 | $ | 49,029,392 | |||
Page 1
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues: | |||||||||||||||
Premiums and other considerations | $ | 11,458 | $ | 10,037 | $ | 18,803 | $ | 17,034 | |||||||
Annuity product charges | 41,124 | 32,409 | 77,629 | 61,091 | |||||||||||
Net investment income | 459,830 | 418,176 | 910,656 | 817,845 | |||||||||||
Change in fair value of derivatives | 39,099 | (23,024 | ) | (34,966 | ) | (54,124 | ) | ||||||||
Net realized gains (losses) on investments, excluding other than temporary impairment ("OTTI") losses | 2,737 | 4,324 | 5,424 | 9,203 | |||||||||||
OTTI losses on investments: | |||||||||||||||
Total OTTI losses | (762 | ) | — | (6,780 | ) | (132 | ) | ||||||||
Portion of OTTI losses recognized in (from) other comprehensive income | (3,684 | ) | (828 | ) | (3,360 | ) | (828 | ) | |||||||
Net OTTI losses recognized in operations | (4,446 | ) | (828 | ) | (10,140 | ) | (960 | ) | |||||||
Total revenues | 549,802 | 441,094 | 967,406 | 850,089 | |||||||||||
Benefits and expenses: | |||||||||||||||
Insurance policy benefits and change in future policy benefits | 13,393 | 12,450 | 22,502 | 21,670 | |||||||||||
Interest sensitive and index product benefits | 111,121 | 306,141 | 208,792 | 588,966 | |||||||||||
Amortization of deferred sales inducements | 30,672 | 75,518 | 58,151 | 86,471 | |||||||||||
Change in fair value of embedded derivatives | 284,303 | (219,601 | ) | 550,160 | (168,388 | ) | |||||||||
Interest expense on notes payable | 6,882 | 7,354 | 13,762 | 14,693 | |||||||||||
Interest expense on subordinated debentures | 3,206 | 3,047 | 6,374 | 6,063 | |||||||||||
Amortization of deferred policy acquisition costs | 50,665 | 104,700 | 100,378 | 118,986 | |||||||||||
Other operating costs and expenses | 26,823 | 24,868 | 53,653 | 45,990 | |||||||||||
Total benefits and expenses | 527,065 | 314,477 | 1,013,772 | 714,451 | |||||||||||
Income (loss) before income taxes | 22,737 | 126,617 | (46,366 | ) | 135,638 | ||||||||||
Income tax expense (benefit) | 8,029 | 43,772 | (16,233 | ) | 46,890 | ||||||||||
Net income (loss) | $ | 14,708 | $ | 82,845 | $ | (30,133 | ) | $ | 88,748 | ||||||
Earnings (loss) per common share | $ | 0.18 | $ | 1.07 | $ | (0.37 | ) | $ | 1.15 | ||||||
Earnings (loss) per common share - assuming dilution | $ | 0.18 | $ | 1.05 | $ | (0.37 | ) | $ | 1.12 | ||||||
Weighted average common shares outstanding (in thousands): | |||||||||||||||
Earnings (loss) per common share | 82,517 | 77,237 | 82,323 | 77,140 | |||||||||||
Earnings (loss) per common share - assuming dilution | 83,184 | 79,227 | 83,073 | 79,173 | |||||||||||
Page 2
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Quarterly Summary - Most Recent 5 Quarters (Unaudited)
Q2 2016 | Q1 2016 | Q4 2015 | Q3 2015 | Q2 2015 | |||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||
Revenues: | |||||||||||||||||||
Traditional life insurance premiums | $ | 2,398 | $ | 2,634 | $ | 2,891 | $ | 2,664 | $ | 2,659 | |||||||||
Life contingent immediate annuity considerations | 9,060 | 4,711 | 7,788 | 5,671 | 7,378 | ||||||||||||||
Surrender charges | 11,997 | 14,565 | 10,543 | 13,104 | 11,413 | ||||||||||||||
Lifetime income benefit rider fees | 29,127 | 21,940 | 26,559 | 24,871 | 20,996 | ||||||||||||||
Net investment income | 459,830 | 450,826 | 438,262 | 436,085 | 418,176 | ||||||||||||||
Change in fair value of derivatives | 39,099 | (74,065 | ) | 69,338 | (351,360 | ) | (23,024 | ) | |||||||||||
Net realized gains (losses) on investments, excluding OTTI | 2,737 | 2,687 | (151 | ) | 1,159 | 4,324 | |||||||||||||
Net OTTI losses recognized in operations | (4,446 | ) | (5,694 | ) | (13,347 | ) | (5,229 | ) | (828 | ) | |||||||||
Total revenues | 549,802 | 417,604 | 541,883 | 126,965 | 441,094 | ||||||||||||||
Benefits and expenses: | |||||||||||||||||||
Traditional life insurance policy benefits and change in future policy benefits | 2,177 | 1,545 | 2,044 | 1,730 | 1,971 | ||||||||||||||
Life contingent immediate annuity benefits and change in future policy benefits | 11,216 | 7,564 | 10,785 | 9,229 | 10,479 | ||||||||||||||
Interest sensitive and index product benefits (b)(c) | 111,121 | 97,671 | 165,622 | 213,465 | 306,141 | ||||||||||||||
Amortization of deferred sales inducements (a)(d) | 30,672 | 27,479 | 57,112 | 65,807 | 75,518 | ||||||||||||||
Change in fair value of embedded derivatives | 284,303 | 265,857 | 118,414 | (414,724 | ) | (219,601 | ) | ||||||||||||
Interest expense on notes payable | 6,882 | 6,880 | 6,873 | 7,283 | 7,354 | ||||||||||||||
Interest expense on subordinated debentures | 3,206 | 3,168 | 3,101 | 3,075 | 3,047 | ||||||||||||||
Amortization of deferred policy acquisition costs (a)(d) | 50,665 | 49,713 | 99,243 | 67,885 | 104,700 | ||||||||||||||
Other operating costs and expenses | 26,823 | 26,830 | 25,731 | 24,497 | 24,868 | ||||||||||||||
Total benefits and expenses | 527,065 | 486,707 | 488,925 | (21,753 | ) | 314,477 | |||||||||||||
Income (loss) before income taxes | 22,737 | (69,103 | ) | 52,958 | 148,718 | 126,617 | |||||||||||||
Income tax expense (benefit) | 8,029 | (24,262 | ) | 19,182 | 51,412 | 43,772 | |||||||||||||
Net income (loss) (a)(b)(c)(d) | $ | 14,708 | $ | (44,841 | ) | $ | 33,776 | $ | 97,306 | $ | 82,845 | ||||||||
Earnings (loss) per common share | $ | 0.18 | $ | (0.55 | ) | $ | 0.41 | $ | 1.22 | $ | 1.07 | ||||||||
Earnings (loss) per common share - assuming dilution (a)(b)(c)(d) | $ | 0.18 | $ | (0.55 | ) | $ | 0.40 | $ | 1.19 | $ | 1.05 | ||||||||
Weighted average common shares outstanding (in thousands): | |||||||||||||||||||
Earnings (loss) per common share | 82,517 | 82,129 | 81,733 | 79,676 | 77,237 | ||||||||||||||
Earnings (loss) per common share - assuming dilution | 83,184 | 82,961 | 83,851 | 81,559 | 79,227 | ||||||||||||||
(a) | Q1 2016 includes expense from unlocking which increased amortization of deferred sales inducements and deferred policy acquisition costs by $17.9 million and $26.1 million, respectively, and increased the net loss and loss per common share- assuming dilution by $28.4 million and $0.35 per share, respectively. |
(b) | Q4 2015 includes an adjustment to reserves for living income benefit riders which reduced interest sensitive and index product benefits by $1.9 million, which after related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs and income taxes, increased net income and earnings per common share-assuming dilution by $0.7 million and $0.01 per share, respectively. |
(c) | Q3 2015 includes expense from the revision of assumptions used in determining reserves held for living income benefit riders. The impact increased interest sensitive and index product benefits by $18.3 million and decreased net income and earnings per common share - assuming dilution by $11.8 million and $0.14 per share, respectively. |
(d) | Q3 2015 includes a benefit from unlocking which reduced amortization of deferred sales inducements and deferred policy acquisition costs by $5.6 million and $11.0 million, respectively, and increased net income and earnings per common share- assuming dilution by $10.7 million and $0.13 per share, respectively. |
Page 3
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
NON-GAAP FINANCIAL MEASURES
In addition to net income (loss), we have consistently utilized operating income and operating income per common share - assuming dilution, non-GAAP financial measures commonly used in the life insurance industry, as economic measures to evaluate our financial performance. Operating income equals net income (loss) 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 operating income eliminate the impact of fair value accounting for our fixed index annuity business and are not economic in nature but rather impact the timing of reported results. We believe the combined presentation and evaluation of operating income together with net income (loss) provides information that may enhance an investor’s understanding of our underlying results and profitability.
Reconciliation from Net Income (Loss) to Operating Income (Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||
Net income (loss) | $ | 14,708 | $ | 82,845 | $ | (30,133 | ) | $ | 88,748 | ||||||
Adjustments to arrive at operating income: (a) | |||||||||||||||
Net realized investment (gains) losses, including OTTI | 605 | (2,556 | ) | 1,760 | (5,377 | ) | |||||||||
Change in fair value of derivatives and embedded derivatives - index annuities | 53,129 | (44,403 | ) | 150,678 | 22,133 | ||||||||||
Change in fair value of derivatives and embedded derivatives - debt | 768 | (1,670 | ) | 3,532 | 171 | ||||||||||
Income taxes | (19,108 | ) | 16,729 | (54,737 | ) | (5,912 | ) | ||||||||
Operating income (a non-GAAP financial measure) | $ | 50,102 | $ | 50,945 | $ | 71,100 | $ | 99,763 | |||||||
Per common share - assuming dilution: | |||||||||||||||
Net income (loss) | $ | 0.18 | $ | 1.05 | $ | (0.37 | ) | $ | 1.12 | ||||||
Adjustments to arrive at operating income: | |||||||||||||||
Anti-dilutive effect of net loss | — | — | 0.01 | — | |||||||||||
Net realized investment (gains) losses, including OTTI | — | (0.04 | ) | 0.02 | (0.07 | ) | |||||||||
Change in fair value of derivatives and embedded derivatives - index annuities | 0.64 | (0.56 | ) | 1.81 | 0.28 | ||||||||||
Change in fair value of derivatives and embedded derivatives - debt | 0.01 | (0.02 | ) | 0.04 | — | ||||||||||
Income taxes | (0.23 | ) | 0.21 | (0.65 | ) | (0.07 | ) | ||||||||
Operating income (a non-GAAP financial measure) | $ | 0.60 | $ | 0.64 | $ | 0.86 | $ | 1.26 | |||||||
(a) | Adjustments to net income (loss) to arrive at operating income are presented net of related adjustments to amortization of deferred sales inducements (DSI) and deferred policy acquisition costs (DAC) where applicable. |
Page 4
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
NON-GAAP FINANCIAL MEASURES
Summary of Adjustments to Arrive at Operating Income (Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Net realized investment gains and losses, including OTTI: | |||||||||||||||
Net realized (gains) losses on investments, including OTTI | $ | 1,709 | $ | (3,496 | ) | $ | 4,716 | $ | (8,243 | ) | |||||
Amortization of DAC and DSI | (1,104 | ) | 940 | (2,956 | ) | 2,866 | |||||||||
Income taxes | (215 | ) | 907 | (625 | ) | 1,909 | |||||||||
$ | 390 | $ | (1,649 | ) | $ | 1,135 | $ | (3,468 | ) | ||||||
Change in fair value of derivatives and embedded derivatives: | |||||||||||||||
Index annuities | $ | 112,740 | $ | (97,362 | ) | $ | 316,324 | $ | 66,286 | ||||||
Interest rate caps and swap | 768 | (1,670 | ) | 3,532 | 171 | ||||||||||
Amortization of DAC and DSI | (59,611 | ) | 52,959 | (165,646 | ) | (44,153 | ) | ||||||||
Income taxes | (18,893 | ) | 15,822 | (54,112 | ) | (7,821 | ) | ||||||||
$ | 35,004 | $ | (30,251 | ) | $ | 100,098 | $ | 14,483 | |||||||
Page 5
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
NON-GAAP FINANCIAL MEASURES
Quarterly Summary - Most Recent 5 Quarters (Unaudited)
Reconciliation from Net Income (Loss) to Operating Income
Q2 2016 | Q1 2016 | Q4 2015 | Q3 2015 | Q2 2015 | |||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||
Net income (loss) | $ | 14,708 | $ | (44,841 | ) | $ | 33,776 | $ | 97,306 | $ | 82,845 | ||||||||
Adjustments to arrive at operating income: (a) | |||||||||||||||||||
Net realized investment (gains) losses, including OTTI | 605 | 1,155 | 8,572 | 2,542 | (2,556 | ) | |||||||||||||
Change in fair value of derivatives and embedded derivatives - index annuities | 53,129 | 97,549 | 17,221 | (83,409 | ) | (44,403 | ) | ||||||||||||
Change in fair value of derivatives and embedded derivatives - debt | 768 | 2,764 | (1,449 | ) | 2,574 | (1,670 | ) | ||||||||||||
Income taxes | (19,108 | ) | (35,629 | ) | (7,979 | ) | 26,903 | 16,729 | |||||||||||
Operating income (a non-GAAP financial measure) (b)(c)(d)(e) | $ | 50,102 | $ | 20,998 | $ | 50,141 | $ | 45,916 | $ | 50,945 | |||||||||
Per common share - assuming dilution: | |||||||||||||||||||
Net income (loss) | $ | 0.18 | $ | (0.55 | ) | $ | 0.40 | $ | 1.19 | $ | 1.05 | ||||||||
Adjustments to arrive at operating income: | |||||||||||||||||||
Anti-dilutive effect of net loss | — | 0.01 | — | — | — | ||||||||||||||
Net realized investment (gains) losses, including OTTI | — | 0.01 | 0.10 | 0.03 | (0.04 | ) | |||||||||||||
Change in fair value of derivatives and embedded derivatives - index annuities | 0.64 | 1.18 | 0.21 | (1.02 | ) | (0.56 | ) | ||||||||||||
Change in fair value of derivatives and embedded derivatives - debt | 0.01 | 0.03 | (0.02 | ) | 0.03 | (0.02 | ) | ||||||||||||
Income taxes | (0.23 | ) | (0.43 | ) | (0.09 | ) | 0.33 | 0.21 | |||||||||||
Operating income (a non-GAAP financial measure) (b)(c)(d)(e) | $ | 0.60 | $ | 0.25 | $ | 0.60 | $ | 0.56 | $ | 0.64 | |||||||||
(a) | Adjustments to net income (loss) to arrive at operating income are presented net of related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs where applicable. |
(b) | Q1 2016 includes expense from unlocking which increased amortization of deferred sales inducements and deferred policy acquisition costs by $18.1 million and $26.3 million, respectively, and decreased operating income and operating income per common share- assuming dilution by $28.6 million and $0.35 per share, respectively. |
(c) | Q4 2015 includes an adjustment to reserves for living income benefit riders which reduced interest sensitive and index product benefits by $1.9 million, which after related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs and income taxes, increased operating income and operating income per common share-assuming dilution by $0.5 million and $0.01 per share, respectively. |
(d) | Q3 2015 includes a benefit from unlocking which reduced amortization of deferred sales inducements and deferred policy acquisition costs by $0.5 million and $4.3 million, respectively, and increased operating income and operating income per common share- assuming dilution by $3.1 million and $0.04 per share, respectively. |
(e) | Q3 2015 includes expense from the revision of assumptions used in determining reserves held for living income benefit riders. The impact increased interest sensitive and index product benefits by $18.3 million and decreased operating income and operating income per common share - assuming dilution by $11.8 million and $0.14 per share, respectively. |
Page 6
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
NON-GAAP FINANCIAL MEASURES
Summary of Adjustments to Arrive at Operating Income (Unaudited)
Q2 2016 | Q1 2016 | Q4 2015 | Q3 2015 | Q2 2015 | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Net realized (gains) losses on investments | $ | (2,737 | ) | $ | (2,687 | ) | $ | 151 | $ | (1,159 | ) | $ | (4,324 | ) | |||||
Net OTTI losses recognized in operations | 4,446 | 5,694 | 13,347 | 5,229 | 828 | ||||||||||||||
Change in fair value of derivatives | (170,795 | ) | (59,509 | ) | (132,818 | ) | 322,406 | 116,627 | |||||||||||
Decrease (increase) in total revenues | (169,086 | ) | (56,502 | ) | (119,320 | ) | 326,476 | 113,131 | |||||||||||
Amortization of deferred sales inducements | 28,027 | 48,002 | (3,075 | ) | (12,644 | ) | (23,306 | ) | |||||||||||
Change in fair value of embedded derivatives | (284,303 | ) | (265,857 | ) | (118,414 | ) | 413,583 | 215,659 | |||||||||||
Amortization of deferred policy acquisition costs | 32,688 | 59,885 | (22,175 | ) | 3,830 | (30,593 | ) | ||||||||||||
Increase (decrease) in total benefits and expenses | (223,588 | ) | (157,970 | ) | (143,664 | ) | 404,769 | 161,760 | |||||||||||
Increase (decrease) in income (loss) before income taxes | 54,502 | 101,468 | 24,344 | (78,293 | ) | (48,629 | ) | ||||||||||||
Increase (decrease) in income tax expense | 19,108 | 35,629 | 7,979 | (26,903 | ) | (16,729 | ) | ||||||||||||
Increase (decrease) in net income (loss) | $ | 35,394 | $ | 65,839 | $ | 16,365 | $ | (51,390 | ) | $ | (31,900 | ) | |||||||
Page 7
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Capitalization/Book Value per Share
June 30, 2016 | December 31, 2015 | ||||||
Capitalization: | |||||||
Notes payable | $ | 400,000 | $ | 400,000 | |||
Subordinated debentures payable to subsidiary trusts | 246,559 | 246,450 | |||||
Total debt | 646,559 | 646,450 | |||||
Total stockholders’ equity | 2,613,390 | 1,944,535 | |||||
Total capitalization | 3,259,949 | 2,590,985 | |||||
Accumulated other comprehensive income (AOCI) | (893,232 | ) | (201,663 | ) | |||
Total capitalization excluding AOCI (a) | $ | 2,366,717 | $ | 2,389,322 | |||
Total stockholders’ equity | $ | 2,613,390 | $ | 1,944,535 | |||
Accumulated other comprehensive income | (893,232 | ) | (201,663 | ) | |||
Total stockholders’ equity excluding AOCI (a) | $ | 1,720,158 | $ | 1,742,872 | |||
Common shares outstanding (b) | 82,293,829 | 81,584,091 | |||||
Book Value per Share: (c) | |||||||
Book value per share including AOCI | $ | 31.76 | $ | 23.83 | |||
Book value per share excluding AOCI (a) | $ | 20.90 | $ | 21.36 | |||
Debt-to-Capital Ratios: (d) | |||||||
Senior debt / Total capitalization | 16.9 | % | 16.7 | % | |||
Adjusted debt / Total capitalization | 16.9 | % | 16.7 | % | |||
(a) | Total capitalization, total stockholders’ equity and book value per share excluding AOCI, non-GAAP financial measures, are based on 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 investments, we believe these non-GAAP financial measures provide useful supplemental information. |
(b) | Common shares outstanding include shares held by the NMO Deferred Compensation Trust: 2016 - 15,058 shares; 2015 - 230,012 shares |
(c) | Book value per share including and excluding AOCI is calculated as total stockholders’ equity and total stockholders’ equity excluding AOCI divided by the total number of shares of common stock outstanding. |
(d) | Debt-to-capital ratios are computed using total capitalization excluding AOCI. Adjusted debt includes notes payable and the portion of the total subordinated debentures payable to subsidiary trusts outstanding (qualifying trust preferred securities) that exceeds 15% of total capitalization excluding AOCI. |
Page 8
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Spread Results
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2016 | 2015 | 2016 | 2015 | ||||
Average yield on invested assets | 4.54% | 4.78% | 4.56% | 4.76% | |||
Aggregate cost of money | 1.92% | 1.94% | 1.92% | 1.96% | |||
Aggregate investment spread | 2.62% | 2.84% | 2.64% | 2.80% | |||
Impact of: | |||||||
Investment yield - additional prepayment income | 0.04% | 0.07% | 0.06% | 0.04% | |||
Cost of money effect of over hedging | —% | 0.07% | —% | 0.06% | |||
Weighted average investments (in thousands) | $40,600,182 | $35,043,846 | $40,032,851 | $34,428,106 | |||
Weighted average investments include fixed maturity securities at amortized cost and equity securities at cost. The numerator for average yield on invested assets includes net investment income and the tax effect of investment income that is exempt from income taxes.
Summary of Cost of Money for Deferred Annuities
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Included in interest sensitive and index product benefits: | |||||||||||||||
Index credits | $ | 8,900 | $ | 216,902 | $ | 15,431 | $ | 414,505 | |||||||
Interest credited | 66,265 | 62,379 | 128,967 | 125,427 | |||||||||||
Included in change in fair value of derivatives: | |||||||||||||||
Proceeds received at option expiration | (9,308 | ) | (222,864 | ) | (16,050 | ) | (425,446 | ) | |||||||
Pro rata amortization of option cost | 140,477 | 124,709 | 280,243 | 243,510 | |||||||||||
Cost of money for deferred annuities | $ | 206,334 | $ | 181,126 | $ | 408,591 | $ | 357,996 | |||||||
Weighted average liability balance outstanding (in thousands) | $ | 43,080,446 | $ | 37,294,188 | $ | 42,482,613 | $ | 36,605,612 | |||||||
Annuity Account Balance Rollforward
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Account balances at beginning of period | $ | 42,519,915 | $ | 36,471,034 | $ | 41,249,647 | $ | 35,363,041 | |||||||
Net deposits | 1,497,701 | 1,719,093 | 3,126,454 | 2,921,891 | |||||||||||
Premium bonuses | 88,533 | 125,600 | 196,207 | 219,190 | |||||||||||
Fixed interest credited and index credits | 75,165 | 279,281 | 144,398 | 539,932 | |||||||||||
Surrender charges | (11,997 | ) | (11,413 | ) | (26,562 | ) | (22,967 | ) | |||||||
Lifetime income benefit rider fees | (29,127 | ) | (20,996 | ) | (51,067 | ) | (38,124 | ) | |||||||
Surrenders, withdrawals, deaths, etc. | (499,212 | ) | (445,256 | ) | (998,099 | ) | (865,620 | ) | |||||||
Account balances at end of period | $ | 43,640,978 | $ | 38,117,343 | $ | 43,640,978 | $ | 38,117,343 | |||||||
Page 9
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Annuity Deposits by Product Type
Three Months Ended June 30, | Six Months Ended June 30, | Year Ended December 31, | ||||||||||||||||||
Product Type | 2016 | 2015 | 2016 | 2015 | 2015 | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Fixed index annuities | $ | 1,525,546 | $ | 1,757,193 | $ | 3,213,548 | $ | 2,984,433 | $ | 6,791,689 | ||||||||||
Annual reset fixed rate annuities | 15,866 | 13,137 | 32,571 | 24,187 | 45,182 | |||||||||||||||
Multi-year fixed rate annuities | 550,558 | 17,715 | 935,590 | 87,217 | 214,356 | |||||||||||||||
Single premium immediate annuities | 8,313 | 9,632 | 13,627 | 18,164 | 32,752 | |||||||||||||||
Total before coinsurance ceded | 2,100,283 | 1,797,677 | 4,195,336 | 3,114,001 | 7,083,979 | |||||||||||||||
Coinsurance ceded | 594,269 | 68,952 | 1,055,255 | 173,946 | 471,822 | |||||||||||||||
Net after coinsurance ceded | $ | 1,506,014 | $ | 1,728,725 | $ | 3,140,081 | $ | 2,940,055 | $ | 6,612,157 | ||||||||||
Surrender Charge Protection and Account Values by Product Type
Annuity Surrender Charges and Net (of coinsurance) Account Values at June 30, 2016:
Surrender Charge | Net Account Value | ||||||||||||
Product Type | Avg. Years At Issue | Avg. Years Remaining | Avg. % Remaining | Dollars in Thousands | % | ||||||||
Fixed Index Annuities | 13.8 | 9.2 | 14.4% | $ | 41,577,829 | 95.3 | % | ||||||
Annual Reset Fixed Rate Annuities | 10.9 | 3.6 | 7.6% | 1,413,302 | 3.2 | % | |||||||
Multi-Year Fixed Rate Annuities | 6.5 | 2.7 | 5.5% | 649,847 | 1.5 | % | |||||||
Total | 13.6 | 8.9 | 14.1% | $ | 43,640,978 | 100.0 | % | ||||||
Page 10
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Annuity Liability Characteristics
Fixed Annuities Account Value | Fixed Index Annuities Account Value | ||||||
(Dollars in thousands) | |||||||
SURRENDER CHARGE PERCENTAGES: | |||||||
No surrender charge | $ | 763,539 | $ | 1,491,299 | |||
0.0% < 2.0% | 15,564 | 668,235 | |||||
2.0% < 3.0% | 55,011 | 60,759 | |||||
3.0% < 4.0% | 23,526 | 533,157 | |||||
4.0% < 5.0% | 69,566 | 87,386 | |||||
5.0% < 6.0% | 90,792 | 453,594 | |||||
6.0% < 7.0% | 56,279 | 403,825 | |||||
7.0% < 8.0% | 72,296 | 455,659 | |||||
8.0% < 9.0% | 69,583 | 1,014,355 | |||||
9.0% < 10.0% | 288,429 | 1,692,773 | |||||
10.0% or greater | 558,564 | 34,716,787 | |||||
$ | 2,063,149 | $ | 41,577,829 | ||||
Fixed and Fixed Index Annuities Account Value | Weighted Average Surrender Charge | |||||
(Dollars in thousands) | ||||||
SURRENDER CHARGE EXPIRATION BY YEAR: | ||||||
Out of Surrender Charge | $ | 2,254,838 | 0.00 | % | ||
2016 | 396,858 | 1.68 | % | |||
2017 | 800,787 | 2.36 | % | |||
2018 | 735,123 | 4.76 | % | |||
2019 | 547,746 | 6.23 | % | |||
2020 | 908,523 | 8.14 | % | |||
2021 | 1,352,413 | 9.53 | % | |||
2022 | 2,010,431 | 11.28 | % | |||
2023 | 4,847,615 | 13.12 | % | |||
2024 | 5,389,621 | 14.26 | % | |||
2025 | 5,911,890 | 14.51 | % | |||
2026 | 3,970,687 | 15.56 | % | |||
2027 | 2,746,391 | 17.76 | % | |||
2028 | 2,443,355 | 18.35 | % | |||
2029 | 3,042,568 | 18.76 | % | |||
2030 | 2,403,846 | 19.20 | % | |||
2031 | 2,840,626 | 19.76 | % | |||
2032 | 1,023,160 | 19.99 | % | |||
2033 | 14,500 | 20.00 | % | |||
$ | 43,640,978 | 14.07 | % | |||
Page 11
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Annuity Liability Characteristics
Fixed Annuities Account Value | Fixed Index Annuities Account Value | ||||||
(Dollars in thousands) | |||||||
CREDITED RATE VS. ULTIMATE MINIMUM GUARANTEED RATE DIFFERENTIAL: | |||||||
No differential | $ | 933,858 | $ | 1,178,055 | |||
› 0.0% - 0.25% | 167,658 | 54,416 | |||||
› 0.25% - 0.5% | 375,438 | 134,007 | |||||
› 0.5% - 1.0% | 27,867 | 751,266 | |||||
› 1.0% - 1.5% | 1,369 | 1,728 | |||||
› 1.5% - 2.0% | 73 | — | |||||
› 2.0% - 2.5% | 321,105 | — | |||||
1.00% ultimate guarantee - 2.75% wtd avg interest rate (a) | 136,152 | 98,877 | |||||
1.50% ultimate guarantee - 1.34% wtd avg interest rate (a) | 98,295 | 4,570,487 | |||||
2.00% ultimate guarantee - 2.24% wtd avg interest rate (a) | 1,334 | — | |||||
2.25% ultimate guarantee - 2.3% wtd avg interest rate (a) | — | 1,272,391 | |||||
3.00% ultimate guarantee - 2.51% wtd avg interest rate (a) | — | 2,486,553 | |||||
Allocated to index strategies (see tables that follow) | — | 31,030,049 | |||||
$ | 2,063,149 | $ | 41,577,829 | ||||
(a) | The minimum guaranteed interest rate for the fixed rate or the fixed rate strategy is 1.00%. The ultimate guaranteed rate is applied on less than 100% of the premium. |
If all crediting rates were reduced to minimum guaranteed rates (subject to limitations imposed by ultimate minimum guaranteed rates where applicable) the weighted average crediting rate as of June 30, 2016 for fixed annuities and funds allocated to the fixed rate strategy for fixed index annuities would decrease by 0.36%.
Page 12
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Annuity Liability Characteristics
FIXED INDEX ANNUITIES ACCOUNT VALUE - INDEX STRATEGIES
Annual Monthly Average and Point-to-Point with Caps | |||||||||||||||||||
Minimum Guaranteed Cap | |||||||||||||||||||
1% | 3% | 4% | 7% | 8% + | |||||||||||||||
Current Cap | (Dollars in thousands) | ||||||||||||||||||
At minimum | $ | 1,677 | $ | 45,773 | $ | 1,678,610 | $ | 49,023 | $ | 229,564 | |||||||||
1.75% - 3% | 4,144,123 | — | — | — | — | ||||||||||||||
3% - 4% | 2,659,836 | 58,935 | — | — | — | ||||||||||||||
4% - 5% | 166,504 | 167,351 | 3,757,921 | — | — | ||||||||||||||
5% - 6% | 330,868 | 123,226 | 1,928,791 | — | — | ||||||||||||||
6% - 7% | — | — | 19 | — | — | ||||||||||||||
>= 7% | — | 16,378 | 791 | 67,172 | 15,253 | ||||||||||||||
Annual Monthly Average and Point-to-Point with Participation Rates | |||||||||||||||
Minimum Guaranteed Participation Rate | |||||||||||||||
10% | 20% - 25% | 35% | 50% + | ||||||||||||
Current Participation Rate | (Dollars in thousands) | ||||||||||||||
At minimum | $ | 434 | $ | 439,864 | $ | 137,912 | $ | 161,339 | |||||||
< 20% | 374,727 | — | — | — | |||||||||||
20% - 40% | 749,928 | 204,375 | — | — | |||||||||||
40% - 60% | 484,725 | 127,593 | 94,593 | 68 | |||||||||||
>= 60% | 4,812 | — | — | — | |||||||||||
S&P 500 Monthly Point-to-Point - Minimum Guaranteed Monthly Cap = 1.0% | |||
(Dollars in thousands) | |||
Current Cap | |||
At minimum | $ | 15,967 | |
1.20% - 1.40% | 3,556,534 | ||
1.45% - 1.70% | 2,897,692 | ||
1.80% - 2.00% | 2,960,461 | ||
>= 2.10% | 1,006,720 | ||
Volatility Control Index | |||
(Dollars in thousands) | |||
Current Asset Fee | |||
At Maximum | $ | — | |
0.75% - 1.75% | 141,284 | ||
2.25% - 2.75% | 1,217,464 | ||
3.00% - 3.50% | 833,504 | ||
Page 13
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
If all caps and participation rates were reduced to minimum caps and participation rates and current asset fees were increased to their maximums, the cost of options would decrease by 0.59% based upon prices of options for the week ended July 26, 2016.
Page 14
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Summary of Invested Assets
June 30, 2016 | December 31, 2015 | ||||||||||||
Carrying Amount | Percent | Carrying Amount | Percent | ||||||||||
(Dollars in thousands) | |||||||||||||
Fixed maturity securities: | |||||||||||||
United States Government full faith and credit | $ | 449,439 | 1.0 | % | $ | 471,256 | 1.3 | % | |||||
United States Government sponsored agencies | 1,380,266 | 3.2 | % | 1,398,611 | 3.5 | % | |||||||
United States municipalities, states and territories | 3,975,544 | 9.2 | % | 3,755,367 | 9.5 | % | |||||||
Foreign government obligations | 253,990 | 0.6 | % | 212,565 | 0.5 | % | |||||||
Corporate securities | 26,459,838 | 61.2 | % | 23,879,016 | 60.3 | % | |||||||
Residential mortgage backed securities | 1,392,441 | 3.2 | % | 1,462,072 | 3.7 | % | |||||||
Commercial mortgage backed securities | 4,735,210 | 10.9 | % | 4,174,396 | 10.5 | % | |||||||
Other asset backed securities | 1,293,797 | 3.0 | % | 1,145,178 | 2.9 | % | |||||||
Total fixed maturity securities | 39,940,525 | 92.3 | % | 36,498,461 | 92.2 | % | |||||||
Equity securities | 7,813 | — | % | 7,828 | — | % | |||||||
Mortgage loans on real estate | 2,451,375 | 5.7 | % | 2,435,257 | 6.2 | % | |||||||
Derivative instruments | 576,262 | 1.3 | % | 337,256 | 0.9 | % | |||||||
Other investments | 292,776 | 0.7 | % | 291,530 | 0.7 | % | |||||||
$ | 43,268,751 | 100.0 | % | $ | 39,570,332 | 100.0 | % | ||||||
Credit Quality of Fixed Maturity Securities - June 30, 2016
NAIC Designation | Carrying Amount | Percent | Rating Agency Rating | Carrying Amount | Percent | |||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||
1 | $ | 25,965,937 | 65.0 | % | Aaa/Aa/A | $ | 25,522,259 | 63.9 | % | |||||||
2 | 12,860,194 | 32.2 | % | Baa | 12,943,431 | 32.4 | % | |||||||||
3 | 980,322 | 2.5 | % | Ba | 819,379 | 2.1 | % | |||||||||
4 | 107,753 | 0.3 | % | B | 133,805 | 0.3 | % | |||||||||
5 | 12,180 | — | % | Caa | 74,266 | 0.2 | % | |||||||||
6 | 14,139 | — | % | Ca and lower | 447,385 | 1.1 | % | |||||||||
$ | 39,940,525 | 100.0 | % | $ | 39,940,525 | 100.0 | % | |||||||||
Page 15
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Watch List Securities - June 30, 2016
General Description | Amortized Cost | Unrealized Losses | Fair Value | Months Below Amortized Cost | ||||||||||
(Dollars in thousands) | ||||||||||||||
Investment grade | ||||||||||||||
Corporate securities: | ||||||||||||||
Financials | $ | 20,000 | $ | (2,568 | ) | $ | 17,432 | 58 | ||||||
Other asset backed securities: | ||||||||||||||
Financials | 2,218 | (665 | ) | 1,553 | 63 | |||||||||
$ | 22,218 | $ | (3,233 | ) | $ | 18,985 | ||||||||
Below investment grade | ||||||||||||||
Corporate securities: | ||||||||||||||
Energy | $ | 45,045 | $ | (12,718 | ) | $ | 32,327 | 22 - 38 | ||||||
Materials | 32,749 | (9,123 | ) | 23,626 | 12 - 41 | |||||||||
Industrials | 4,981 | (2,981 | ) | 2,000 | 20 | |||||||||
Telecommunications | 2,171 | (1,241 | ) | 930 | 24 | |||||||||
Other asset backed securities: | ||||||||||||||
Financials | 4,854 | (3,176 | ) | 1,678 | 37 | |||||||||
$ | 89,800 | $ | (29,239 | ) | $ | 60,561 | ||||||||
$ | 112,018 | $ | (32,472 | ) | $ | 79,546 | ||||||||
Page 16
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Fixed Maturity Securities by Sector
June 30, 2016 | December 31, 2015 | ||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Available for sale: | |||||||||||||||
United States Government full faith and credit and sponsored agencies | $ | 1,765,648 | $ | 1,829,705 | $ | 1,856,786 | $ | 1,869,867 | |||||||
United States municipalities, states and territories | 3,459,913 | 3,975,544 | 3,422,667 | 3,755,367 | |||||||||||
Foreign government obligations | 234,382 | 253,990 | 210,953 | 212,565 | |||||||||||
Corporate securities: | |||||||||||||||
Consumer discretionary | 2,076,303 | 2,239,959 | 1,983,595 | 2,012,874 | |||||||||||
Consumer staples | 1,674,020 | 1,855,156 | 1,612,382 | 1,649,408 | |||||||||||
Energy | 2,656,241 | 2,686,344 | 2,622,284 | 2,410,184 | |||||||||||
Financials | 5,153,544 | 5,594,745 | 4,955,851 | 5,134,209 | |||||||||||
Health care | 1,962,804 | 2,183,316 | 1,944,109 | 2,007,107 | |||||||||||
Industrials | 3,410,412 | 3,706,054 | 3,236,836 | 3,295,598 | |||||||||||
Information technology | 1,767,440 | 1,883,632 | 1,689,259 | 1,694,466 | |||||||||||
Materials | 1,769,928 | 1,844,134 | 1,732,123 | 1,624,073 | |||||||||||
Telecommunications | 569,091 | 610,818 | 543,689 | 547,424 | |||||||||||
Utilities | 3,353,715 | 3,778,951 | 3,277,402 | 3,427,041 | |||||||||||
Residential mortgage backed securities: | |||||||||||||||
Government agency | 675,374 | 769,764 | 687,515 | 741,431 | |||||||||||
Prime | 395,636 | 414,475 | 474,756 | 493,096 | |||||||||||
Alt-A | 186,624 | 208,202 | 204,714 | 227,545 | |||||||||||
Commercial mortgage backed securities: | |||||||||||||||
Government agency | 423,594 | 461,360 | 359,273 | 370,966 | |||||||||||
Other | 4,176,937 | 4,273,850 | 3,878,992 | 3,803,430 | |||||||||||
Other asset backed securities: | |||||||||||||||
Consumer discretionary | 67,777 | 67,456 | 62,852 | 61,759 | |||||||||||
Energy | 8,072 | 8,141 | 8,143 | 9,097 | |||||||||||
Financials | 960,620 | 970,457 | 816,906 | 821,343 | |||||||||||
Industrials | 216,986 | 228,024 | 223,414 | 231,678 | |||||||||||
Telecommunications | 12,696 | 13,581 | 13,789 | 14,575 | |||||||||||
Utilities | 4,971 | 6,138 | 5,420 | 6,726 | |||||||||||
Redeemable preferred stock - financials | — | 7 | — | 10 | |||||||||||
$ | 36,982,728 | $ | 39,863,803 | $ | 35,823,710 | $ | 36,421,839 | ||||||||
Held for investment: | |||||||||||||||
Corporate security - financials | $ | 76,722 | $ | 68,542 | $ | 76,622 | $ | 65,377 | |||||||
Page 17
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Fixed Maturity Securities by Sector
Energy and Metals & Mining
In the table on the previous page, oil and metals and mining exposure is reflected within the foreign government, energy, material, utilities, and industrial sectors. Our privately placed available for sale fixed maturity securities at June 30, 2016 total $176.0 million fair value ($183.7 million amortized cost) in Energy and $41.7 million fair value ($45.6 million amortized cost) in Metals & Mining and are not included in the following tables.
June 30, 2016 | ||||||||||||||
Sector and Subsector | Amortized Cost | Fair Value | Unrealized Gain (Loss) | Average Credit Rating | ||||||||||
(Dollars in thousands) | ||||||||||||||
Energy | ||||||||||||||
Independent | $ | 499,692 | $ | 494,424 | $ | (5,268 | ) | Baa | ||||||
Integrated | 491,459 | 521,976 | 30,517 | A | ||||||||||
Oil field services | 405,207 | 380,973 | (24,234 | ) | Baa | |||||||||
Refining | 104,622 | 108,976 | 4,354 | Baa | ||||||||||
Midstream | 760,507 | 768,248 | 7,741 | Baa | ||||||||||
Government owned no guarantee | 284,207 | 305,970 | 21,763 | A | ||||||||||
Metals & Mining | 562,055 | 554,527 | (7,528 | ) | Baa | |||||||||
Total Energy and Metals & Mining | $ | 3,107,749 | $ | 3,135,094 | $ | 27,345 | Baa | |||||||
Amortized Cost at June 30, 2016 | ||||||||||||||||||||||||||||||||
Energy | ||||||||||||||||||||||||||||||||
NRSRO Rating | Independent | Integrated | Oil field services | Refining | Midstream | Government Owned No Guarantee | Metals & Mining | Total | ||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
Aaa | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Aa | — | 228,196 | — | — | — | 19,912 | — | 248,108 | ||||||||||||||||||||||||
A | 89,477 | 78,798 | 135,821 | 12,104 | 90,864 | 214,437 | 76,592 | 698,093 | ||||||||||||||||||||||||
Baa | 363,984 | 149,246 | 176,218 | 92,518 | 635,624 | 25,262 | 287,890 | 1,730,742 | ||||||||||||||||||||||||
Ba | 32,189 | 35,219 | 64,104 | — | 34,019 | — | 129,879 | 295,410 | ||||||||||||||||||||||||
B | 14,042 | — | 29,064 | — | — | 24,596 | 54,134 | 121,836 | ||||||||||||||||||||||||
Below B | — | — | — | — | — | — | 13,560 | 13,560 | ||||||||||||||||||||||||
$ | 499,692 | $ | 491,459 | $ | 405,207 | $ | 104,622 | $ | 760,507 | $ | 284,207 | $ | 562,055 | $ | 3,107,749 | |||||||||||||||||
Fair Value at June 30, 2016 | ||||||||||||||||||||||||||||||||
Energy | ||||||||||||||||||||||||||||||||
NRSRO Rating | Independent | Integrated | Oil field services | Refining | Midstream | Government Owned No Guarantee | Metals & Mining | Total | ||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
Aaa | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Aa | — | 250,929 | — | — | — | 22,120 | — | 273,049 | ||||||||||||||||||||||||
A | 95,615 | 82,530 | 149,461 | 12,631 | 98,202 | 238,764 | 82,365 | 759,568 | ||||||||||||||||||||||||
Baa | 357,636 | 155,938 | 161,209 | 96,345 | 640,424 | 25,945 | 292,484 | 1,729,981 | ||||||||||||||||||||||||
Ba | 28,678 | 32,579 | 50,616 | — | 29,622 | — | 125,285 | 266,780 | ||||||||||||||||||||||||
B | 12,495 | — | 19,687 | — | — | 19,141 | 40,174 | 91,497 | ||||||||||||||||||||||||
Below B | — | — | — | — | — | — | 14,219 | 14,219 | ||||||||||||||||||||||||
$ | 494,424 | $ | 521,976 | $ | 380,973 | $ | 108,976 | $ | 768,248 | $ | 305,970 | $ | 554,527 | $ | 3,135,094 | |||||||||||||||||
Page 18
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Mortgage Loans on Commercial Real Estate
June 30, 2016 | December 31, 2015 | |||||||||||||
Principal | Percent | Principal | Percent | |||||||||||
(Dollars in thousands) | ||||||||||||||
Geographic distribution | ||||||||||||||
East | $ | 672,512 | 27.3 | % | $ | 698,113 | 28.5 | % | ||||||
Middle Atlantic | 160,283 | 6.5 | % | 160,261 | 6.6 | % | ||||||||
Mountain | 234,568 | 9.5 | % | 252,442 | 10.3 | % | ||||||||
New England | 12,944 | 0.6 | % | 13,161 | 0.5 | % | ||||||||
Pacific | 385,306 | 15.6 | % | 355,268 | 14.5 | % | ||||||||
South Atlantic | 472,253 | 19.2 | % | 456,227 | 18.6 | % | ||||||||
West North Central | 325,402 | 13.2 | % | 313,120 | 12.8 | % | ||||||||
West South Central | 200,144 | 8.1 | % | 201,317 | 8.2 | % | ||||||||
$ | 2,463,412 | 100.0 | % | $ | 2,449,909 | 100.0 | % | |||||||
Property type distribution | ||||||||||||||
Office | $ | 341,209 | 13.9 | % | $ | 396,154 | 16.2 | % | ||||||
Medical office | 72,087 | 2.9 | % | 77,438 | 3.2 | % | ||||||||
Retail | 815,013 | 33.1 | % | 790,158 | 32.2 | % | ||||||||
Industrial/Warehouse | 690,503 | 28.0 | % | 686,400 | 28.0 | % | ||||||||
Hotel | 3,255 | 0.1 | % | 3,361 | 0.1 | % | ||||||||
Apartment | 372,459 | 15.1 | % | 352,971 | 14.4 | % | ||||||||
Mixed use/other | 168,886 | 6.9 | % | 143,427 | 5.9 | % | ||||||||
$ | 2,463,412 | 100.0 | % | $ | 2,449,909 | 100.0 | % | |||||||
June 30, 2016 | December 31, 2015 | |||||||||||||
Credit Exposure - By Payment Activity | ||||||||||||||
Performing | $ | 2,453,915 | $ | 2,438,341 | ||||||||||
In workout | 1,648 | 11,568 | ||||||||||||
Delinquent | — | — | ||||||||||||
Collateral dependent | 7,849 | — | ||||||||||||
2,463,412 | 2,449,909 | |||||||||||||
Specific loan loss allowance | (4,552 | ) | (7,842 | ) | ||||||||||
General loan loss allowance | (6,300 | ) | (6,300 | ) | ||||||||||
Deferred prepayment fees | (1,185 | ) | (510 | ) | ||||||||||
$ | 2,451,375 | $ | 2,435,257 | |||||||||||
Page 19
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Shareholder Information
Corporate Offices:
American Equity Investment Life Holding Company
6000 Westown Parkway
West Des Moines, IA 50266
Inquiries:
Steven Schwartz, Vice President-Investor Relations
(515) 273-3673, sschwartz@american-equity.com
Common Stock and Dividend Information:
New York Stock Exchange symbol: “AEL”
High | Low | Close | Dividend Declared | ||||
2016 | |||||||
First Quarter | $23.65 | $12.65 | $16.80 | $0.00 | |||
Second Quarter | $16.96 | $12.77 | $14.25 | $0.00 | |||
2015 | |||||||
First Quarter | $29.62 | $25.46 | $29.13 | $0.00 | |||
Second Quarter | $29.90 | $25.06 | $26.98 | $0.00 | |||
Third Quarter | $30.02 | $22.36 | $23.31 | $0.00 | |||
Fourth Quarter | $28.30 | $22.55 | $24.03 | $0.22 | |||
2014 | |||||||
First Quarter | $26.42 | $18.84 | $23.62 | $0.00 | |||
Second Quarter | $25.15 | $20.97 | $24.60 | $0.00 | |||
Third Quarter | $25.25 | $21.69 | $22.88 | $0.00 | |||
Fourth Quarter | $29.75 | $21.36 | $29.19 | $0.20 | |||
Transfer Agent:
Computershare Trust Company, N.A.
P.O. Box 43010
Providence, RI 02940-0310
Phone: (877) 282-1169
Fax: (781) 575-2723
www.computershare.com
Annual Report and Other Information:
Shareholders may receive when available, without charge, a copy of American Equity’s Annual Report, SEC filings and/or press releases by calling Steven Schwartz, Vice President-Investor Relations, at (515) 273-3763 or by visiting our web site at www.american-equity.com.
Page 20
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Research Analyst Coverage
Thomas Gallagher
Evercore ISI
(212) 446-9439
thomas.gallagher@evercoreisi.com
Randy Binner
Friedman, Billings, Ramsey & Co., Inc.
(703) 312-1890
rbinner@fbr.com
Pablo Singzon II
JP Morgan
(212) 622-2295
pablo.s.singzon@jpmorgan.com
C. Gregory Peters
Raymond James & Associates, Inc.
(727) 567-1534
greg.peters@raymondjames.com
Kenneth S. Lee
RBC Capital Markets, LLC
(212) 905-5995
kenneth.s.lee@rbccm.com
John Barnidge
Sandler O'Neill & Partners, L.P.
(312) 281-3412
jbarnidge@sandleroneill.com
Mark Hughes
SunTrust Robinson Humphrey
(404) 926-5072
mark_hughes@rhco.com
Page 21