Athene Holding Ltd. (NYSE:ATH) Q3 2018 Earnings Conference Call - Final Transcript

Nov 01, 2018 • 10:00 am ET


Athene Holding Ltd. (NYSE:ATH) Q3 2018 Earnings Conference Call - Final Transcript


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Good day, and welcome to the Athene Holding's Third Quarter 2018 Conference Call. During today's presentation, all callers will be placed in a listen-only mode; and following management's prepared remarks, the conference call will be (technical difficulty) questions. This conference call is being recorded.

I would now like to turn the conference call over to Mr. Noah Gunn, Head of IR. Mr. Gunn, the floor is yours, sir.

Noah Gunn

Good morning and welcome to our third quarter 2018 earnings call. Joining me this morning are Jim Belardi, Chairman and CEO; Bill Wheeler, President; and Marty Klein, our CFO.

(Forward-Looking Cautionary Statements)

We'll be discussing certain non-GAAP measures on this call, which we believe are relevant in assessing the financial performance of the business. Reconciliations of these non-GAAP measures can be found in our earnings presentation and financial supplement, which is available at

I would now like to turn the call over to Jim.

Jim Belardi

Thanks, Noah and good morning everyone. This call provides us with an opportunity to highlight the continued momentum we are seeing across our business. I'd like to frame my comments on our third quarter results through the lens of the key business attributes discussed at our recent Investor Day. First, we are a profit-driven growth company and we have superior financial performance. During the third quarter, we generated $381 million of adjusted operating income, a quarterly record and 65% greater than the prior year level.

Our strong results were enabled by the fact that our team continues to leverage our structural advantages and differentiated capabilities to build value. One of the primary ways, we drive superior financial performance is by having a highly scalable platform. I'm pleased to report that the third quarter operating expenses, as a percentage of average invested assets were 31 basis points, continuing a downward trend to a level, which is the best in the industry.

At Athene, we have the ability to grow sustainably across multiple channels. At any given time, our retail, flow reinsurance, funding agreement and pension risk transfer businesses can pivot their level of activity depending on market dynamics and the relative return opportunity. When all these businesses are combined with our strategic inorganic capabilities, the result is a powerful engine driving sustainable growth. Through the first three quarters of the year, we generated more than $27 billion of total organic and inorganic deposits, which has driven 31% growth in our Retirement Services reserve liabilities year-to-date.

The organic channels alone have produced $8 billion of deposits year-to-date including $3.3 billion during the third quarter. My comments on liability growth naturally lead to the next point, which is that a core part of our strategy is to create value on both sides of the balance sheet. In addition to sourcing all the attractively priced liabilities I just discussed, we also outperform in how we manage our $100 billion investment portfolio.

Our net investment earned rate has significant upside potential, given the ongoing Voya portfolio redeployment, rising rates and our investment in