8-K

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 5, 2019

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 Identification 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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $1	AEL	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933

(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 2.02  Results of Operations and Financial Condition

On August 5, 2019, the registrant issued a press release announcing its financial results for the quarter endedJune 30, 2019, a copy of which is attached as Exhibit 99.1 and is incorporated herein by reference. The registrant's financial supplement for the quarter endedJune 30, 2019, 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 5, 2019, announcing American Equity Investment Life Holding Company's financial results for the quarter ended June 30, 2019.
99.2	American Equity Investment Life Holding Company's Financial Supplement for the quarter ended June 30, 2019.

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 5, 2019

AMERICAN EQUITY
INVESTMENT LIFE HOLDING COMPANY
By:	/s/ John M. Matovina
	John M. Matovina
	Chief Executive Officer and President

EX-99.1

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 5, 2019

American Equity Reports Second Quarter2019 Results

Company Highlights

• Second quarter2019 net income of $18.6 million or $0.20 per diluted common share

• Second quarter2019 non-GAAP operating income¹ of $99.6 million or $1.09 per diluted common share

• Second quarter2019 annuity sales of $1.5 billion

• Policyholder funds under management of $52.4 billion

• Second quarter2019 investment spread of 2.63%

• Estimated risk-based capital ratio of 369% compared to 360% at December 31, 2018

WEST DES MOINES, Iowa (August 5, 2019) - American Equity Investment Life Holding Company (NYSE: AEL), a leading issuer of fixed index annuities (FIAs), today reported a second quarter2019 net income of $18.6 million, or $0.20per diluted common share, compared to net income of $93.9 million, or $1.03per diluted common share, for second quarter2018.

Non-GAAP operating income¹ for the second quarter of 2019 was $99.6 million, or $1.09per diluted common share, compared to non-GAAP operating income¹ of $86.6 million, or $0.95 per diluted common share, for second quarter2018. On a trailing twelve-month basis, non-GAAP operating return¹ on average equity excluding average AOCI¹ was 19.2% based upon reported results and 16.0% excluding the impact of assumption revisions.

POLICYHOLDER FUNDS UNDER MANAGEMENT UP 1.6% ON $1.5 BILLION OF SALES

Policyholder funds under management at June 30, 2019 were $52.4 billion, an $811 million or 1.6% increase from March 31, 2019. Second quarter gross and net sales were $1.5 billion and $1.4 billion, respectively, representing increases of 25% and 33% from second quarter2018 sales. On a sequential basis, sales increased 21% both before and after coinsurance.

Total sales by independent agents for American Equity Investment Life Insurance Company (American Equity Life) increased 18% sequentially while total sales by broker-dealers and banks for Eagle Life Insurance Company (Eagle Life) increased 39% sequentially. Sales of FIAs were up 20% sequentially to $1.4 billion driven by an 18% increase in sales for American Equity Life and a 33% increase for Eagle Life.

Commenting on sales, John Matovina, Chairman and Chief Executive Officer, said: "We delivered substantial sequential and year-over-year increases in FIA sales in American Equity Life's independent agent channel. Sales have been on an upswing for the last three quarters and the momentum carried over into July. In the second quarter, combined sales for AssetShield and the Choice series, our accumulation products in the independent agent channel, accounted for 46% of sales compared to 41% of sales in the first quarter. In the guaranteed lifetime income space, the IncomeShield series, which was the best-selling guaranteed lifetime income product in the independent agent channel in the first quarter of 2019, accounted for 40% of our FIA sales in the second quarter."

Commenting on the market environment and the outlook for FIA sales, Matovina added: "The market in each of our distribution channels continues to be competitive. Reflecting the decline in interest rates since year-end, we have taken actions to lower caps, participation rates, and declared rates for both American Equity Life and Eagle Life. In mid-April we lowered participation rates and caps on S&P 500 annual point to point strategies for accumulation products. In mid-June, we reduced caps and participation rates for our S&P 500 annual point to point strategies as well as our volatility-controlled S&P Dividend Aristocrats Excess Return strategies; additional reductions on these strategies will be effective August 6th. Competitors have been reducing caps and participation rates as well, so we anticipate remaining competitive in the accumulation space. Also effective August 6th, guaranteed income levels on the IncomeShield and Gold Series product lines will be reduced. We would not be surprised to see competitors make reductions in guaranteed income."

Matovina continued: "In the bank and broker-dealer channels, we have benefited from new sales relationships and the expansion of our employee wholesaling force. Eagle Life now has 12 employee wholesalers, up from four at the beginning of the year. We are using our employee wholesalers to target accounts that do not use third party wholesalers and to complement our third party wholesalers when possible. We continue to put significant emphasis on account acquisition and hope to bring on at least two new meaningful accounts by year-end. At current run rates, we have seven accounts capable of producing sales of $50 million or higher this year."

INVESTMENT SPREAD INCREASES ON LOWER COST OF MONEY

American Equity’s investment spread was 2.63% for the second quarter of 2019 compared to 2.58% for the first quarter of 2019 and 2.64% for the second quarter of 2018. On a sequential basis, the average yield on invested assets increased by 3 basis points while the cost of money fell 2 basis points.

Average yield on invested assets was 4.51% in the second quarter of 2019 compared to 4.48% in the first quarter of 2019. This increase was attributable to an increase in the benefit from non-trendable investment income items from 2 basis points in the first quarter to 5 basis points in the second quarter of this year. The impact from the decline in short term yields on the $4.9 billion of floating rate instruments in our investment portfolio negatively affected our average yield by 1 basis point.

The aggregate cost of money for annuity liabilities of 1.88% in the second quarter of 2019 was down 2 basis points from 1.90% in the first quarter of 2019. The cost of money benefited by 4 basis points from over hedging index-linked interest obligations and other non-trendable items, compared to 4 basis points in the first quarter of 2019.

Commenting on investment spread, Matovina said: “Excluding non-trendable investment spread items, investment spread increased 2 basis points sequentially driven by lower cost of money. The cost of money continues to benefit from the renewal rate reductions we initiated in the fourth quarter of last year. Option costs increased slightly in the second quarter, but were still well below levels paid during most of 2018."

Matovina went on to say: "Given the decline in yields available from fixed income securities and other fixed income instruments since we last initiated renewal rate reductions in the fourth quarter of last year, we will initiate further renewal rate adjustments on certain in-force policies later this month. Should yields available to us remain at current levels or the cost of money rise, we have flexibility to reduce our crediting rates and could decrease our cost of money by approximately 0.58% through further reductions in renewal rates to guaranteed minimums."

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 quarter2019 earnings on Tuesday, August 6, 2019 at 9:00 a.m. CT. 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 4169648 (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 13, 2019 at 855-859-2056, passcode 4169648 (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

Unaudited (Dollars in thousands, except per share data)

Consolidated Statements of Operations

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2019			2018			2019			2018
Revenues:
Premiums and other considerations	$	4,126		$	5,757		$	9,536		$	14,810
Annuity product charges	60,700			55,006			113,666			105,729
Net investment income	570,568			533,282			1,129,006			1,044,066
Change in fair value of derivatives	76,045			132,205			460,514			(318,878		)
Net realized losses on investments, excluding other than temporary impairment ("OTTI") losses	(3,832		)	(38,381		)	(4,395		)	(38,079		)
OTTI losses on investments:
Total OTTI losses	(998		)	(745		)	(998		)	(1,652		)
Portion of OTTI losses recognized from other comprehensive income	(215		)	(1,651		)	(215		)	(1,651		)
Net OTTI losses recognized in operations	(1,213		)	(2,396		)	(1,213		)	(3,303		)
Total revenues	706,394			685,473			1,707,114			804,345
Benefits and expenses:
Insurance policy benefits and change in future policy benefits	6,939			9,276			16,238			21,370
Interest sensitive and index product benefits	251,103			427,951			387,777			942,046
Amortization of deferred sales inducements	19,785			78,112			53,094			178,535
Change in fair value of embedded derivatives	327,562			(101,949		)	1,093,885			(969,181		)
Interest expense on notes payable	6,380			6,374			12,759			12,746
Interest expense on subordinated debentures	4,057			3,878			8,145			7,508
Amortization of deferred policy acquisition costs	29,946			115,049			75,078			255,688
Other operating costs and expenses	37,426			32,540			76,405			63,780
Total benefits and expenses	683,198			571,231			1,723,381			512,492
Income (loss) before income taxes	23,196			114,242			(16,267		)	291,853
Income tax expense (benefit)	4,606			20,339			(4,847		)	56,988
Net income (loss)	$	18,590		$	93,903		$	(11,420	)	$	234,865
Earnings (loss) per common share	$	0.20		$	1.04		$	(0.13	)	$	2.60
Earnings (loss) per common share - assuming dilution	$	0.20		$	1.03		$	(0.13	)	$	2.58
Weighted average common shares outstanding (in thousands):
Earnings (loss) per common share	91,103			90,327			90,994			90,173
Earnings (loss) per common share - assuming dilution	91,785			91,271			91,765			91,206

Page 1

American Equity Investment Life Holding Company

Unaudited (Dollars in thousands, except per share data)

NON-GAAP FINANCIAL MEASURES

In addition to net income (loss), the Company has consistently utilized non-GAAP operating income and non-GAAP 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. Non-GAAP 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 the Company believes measures excluding their impact are useful in analyzing operating trends. The most significant adjustments to arrive at non-GAAP operating income eliminate the impact of fair value accounting for the Company's fixed index annuity business. These adjustments are not economic in nature but rather impact the timing of reported results. The Company believes the combined presentation and evaluation of non-GAAP 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 Non-GAAP Operating Income

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2019			2018			2019			2018
Net income (loss)	$	18,590		$	93,903		$	(11,420	)	$	234,865
Adjustments to arrive at non-GAAP operating income: (a)
Net realized investment losses, including OTTI	2,625			25,624			2,930			25,647
Change in fair value of derivatives and embedded derivatives - fixed index annuities	99,868			(30,094		)	250,812			(108,912		)
Change in fair value of derivatives - debt	854			(739		)	1,490			(2,571		)
Income taxes	(22,346		)	(2,046		)	(54,819		)	15,313
Non-GAAP operating income	$	99,591		$	86,648		$	188,993		$	164,342
Per common share - assuming dilution:
Net income (loss)	$	0.20		$	1.03		$	(0.13	)	$	2.58
Adjustments to arrive at non-GAAP operating income:
Anti-dilutive effect of net loss	—			—			0.01			—
Net realized investment losses, including OTTI	0.03			0.28			0.03			0.28
Change in fair value of derivatives and embedded derivatives - fixed index annuities	1.09			(0.33		)	2.73			(1.19		)
Change in fair value of derivatives - debt	0.01			(0.01		)	0.02			(0.03		)
Income taxes	(0.24		)	(0.02		)	(0.60		)	0.16
Non-GAAP operating income	$	1.09		$	0.95		$	2.06		$	1.80

(a) Adjustments to net income (loss) to arrive at non-GAAP 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

Unaudited (Dollars in thousands)

NON-GAAP FINANCIAL MEASURES

Average Stockholders' Equity and Return on Average Equity

Return on average equity measures how efficiently the Company generates profits from the resources provided by its net assets.  Return on average equity and non-GAAP operating return on average equity are calculated by dividing net income and non-GAAP operating income, respectively, 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, 2019
Average Stockholders' Equity
Average equity including average AOCI	$	2,962,150
Average AOCI	(615,195		)
Average equity excluding average AOCI	$	2,346,955
Net income	$	211,731
Non-GAAP operating income	450,391
Return on Average Equity Excluding Average AOCI
Net income	9.02		%
Non-GAAP operating income	19.19		%

Page 3

EX-99.2

Exhibit 99.2

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement

June 30, 2019

A.	Financial Highlights
	Condensed Consolidated Balance Sheets	1
	Consolidated Statements of Operations	2
	Quarterly Summary - Most Recent 5 Quarters	3
	Non-GAAP Financial Measures
	Reconciliation from Net Income (Loss) to Non-GAAP Operating Income	4
	Summary of Adjustments to Arrive at Non-GAAP Operating Income	5
	Quarterly Summary - Reconciliation from Net Income (Loss) to Non-GAAP Operating Income	6
	Quarterly Summary - Summary of Adjustments to Arrive at Non-GAAP Operating Income	7
	Capitalization/Book Value per Share	8
	Spread Results	9
B.	Product Summary
	Summary of Cost of Money for Deferred Annuities	9
	Annuity Account Balance Rollforward	9
	Annuity Deposits by Product Type	10
	Surrender Charge Protection and Account Values by Product Type	10
	Annuity Liability Characteristics	11
C.	Investment Summary
	Summary of Invested Assets	14
	Credit Quality of Fixed Maturity Securities	14
	Watch List Securities	14
	Fixed Maturity Securities by Sector	15
	Mortgage Loans on Commercial Real Estate	16
D.	Shareholder Information	17
E.	Research Analyst Coverage	18

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2019

Unaudited (Dollars in thousands)

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2019		December 31, 2018
Assets
Investments:
Fixed maturity securities, available for sale, at fair value	$	50,171,303	$	45,923,727
Mortgage loans on real estate	3,083,675		2,943,091
Derivative instruments	888,208		205,149
Other investments	642,219		355,531
Total investments	54,785,405		49,427,498
Cash and cash equivalents	1,215,967		344,396
Coinsurance deposits	5,029,374		4,954,068
Accrued investment income	480,664		468,729
Deferred policy acquisition costs	2,805,568		3,535,838
Deferred sales inducements	1,943,534		2,516,721
Deferred income taxes	9,328		291,169
Income taxes recoverable	48,084		26,537
Other assets	53,380		60,608
Total assets	$	66,371,304	$	61,625,564
Liabilities and Stockholders' Equity
Liabilities:
Policy benefit reserves	$	60,203,010	$	57,606,009
Other policy funds and contract claims	263,691		270,858
Notes payable	494,850		494,591
Subordinated debentures	243,200		242,982
Amounts due under repurchase agreements	—		109,298
Other liabilities	1,669,078		502,725
Total liabilities	62,873,829		59,226,463
Stockholders' equity:
Common stock	90,936		90,369
Additional paid-in capital	817,997		811,186
Accumulated other comprehensive income (loss)	1,049,984		(52,432		)
Retained earnings	1,538,558		1,549,978
Total stockholders' equity	3,497,475		2,399,101
Total liabilities and stockholders' equity	$	66,371,304	$	61,625,564

Page 1

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2019

Unaudited (Dollars in thousands, except per share data)

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2019			2018			2019			2018
Revenues:
Premiums and other considerations	$	4,126		$	5,757		$	9,536		$	14,810
Annuity product charges	60,700			55,006			113,666			105,729
Net investment income	570,568			533,282			1,129,006			1,044,066
Change in fair value of derivatives	76,045			132,205			460,514			(318,878		)
Net realized losses on investments, excluding other than temporary impairment ("OTTI") losses	(3,832		)	(38,381		)	(4,395		)	(38,079		)
OTTI losses on investments:
Total OTTI losses	(998		)	(745		)	(998		)	(1,652		)
Portion of OTTI losses recognized from other comprehensive income	(215		)	(1,651		)	(215		)	(1,651		)
Net OTTI losses recognized in operations	(1,213		)	(2,396		)	(1,213		)	(3,303		)
Total revenues	706,394			685,473			1,707,114			804,345
Benefits and expenses:
Insurance policy benefits and change in future policy benefits	6,939			9,276			16,238			21,370
Interest sensitive and index product benefits	251,103			427,951			387,777			942,046
Amortization of deferred sales inducements	19,785			78,112			53,094			178,535
Change in fair value of embedded derivatives	327,562			(101,949		)	1,093,885			(969,181		)
Interest expense on notes payable	6,380			6,374			12,759			12,746
Interest expense on subordinated debentures	4,057			3,878			8,145			7,508
Amortization of deferred policy acquisition costs	29,946			115,049			75,078			255,688
Other operating costs and expenses	37,426			32,540			76,405			63,780
Total benefits and expenses	683,198			571,231			1,723,381			512,492
Income (loss) before income taxes	23,196			114,242			(16,267		)	291,853
Income tax expense (benefit)	4,606			20,339			(4,847		)	56,988
Net income (loss)	$	18,590		$	93,903		$	(11,420	)	$	234,865
Earnings (loss) per common share	$	0.20		$	1.04		$	(0.13	)	$	2.60
Earnings (loss) per common share - assuming dilution	$	0.20		$	1.03		$	(0.13	)	$	2.58
Weighted average common shares outstanding (in thousands):
Earnings (loss) per common share	91,103			90,327			90,994			90,173
Earnings (loss) per common share - assuming dilution	91,785			91,271			91,765			91,206

Page 2

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2019

Unaudited (Dollars in thousands, except per share data)

Quarterly Summary - Most Recent 5 Quarters

	Q2 2019			Q1 2019			Q4 2018			Q3 2018			Q2 2018
Revenues:
Traditional life insurance premiums	$	799		$	829		$	845		$	807		$	910
Life contingent immediate annuity considerations	3,327			4,581			3,585			6,433			4,847
Surrender charges	19,480			16,456			15,710			17,132			16,520
Lifetime income benefit rider fees	41,220			36,510			44,684			41,233			38,486
Net investment income	570,568			558,438			554,355			549,391			533,282
Change in fair value of derivatives	76,045			384,469			(1,054,281		)	595,311			132,205
Net realized gains (losses) on investments, excluding OTTI	(3,832		)	(563		)	3,097			(2,196		)	(38,381		)
Net OTTI losses recognized in operations	(1,213		)	—			(18,980		)	(14,373		)	(2,396		)
Total revenues	706,394			1,000,720			(450,985		)	1,193,738			685,473
Benefits and expenses:
Traditional life insurance policy benefits and change in future policy benefits	576			878			731			838			981
Life contingent immediate annuity benefits and change in future policy benefits	6,363			8,421			6,708			9,883			8,295
Interest sensitive and index product benefits (a)	251,103			136,674			255,700			413,089			427,951
Amortization of deferred sales inducements (b)	19,785			33,309			(11,578		)	55,244			78,112
Change in fair value of embedded derivatives	327,562			766,323			(804,026		)	383,716			(101,949		)
Interest expense on notes payable	6,380			6,379			6,376			6,376			6,374
Interest expense on subordinated debentures	4,057			4,088			4,041			3,942			3,878
Amortization of deferred policy acquisition costs (b)	29,946			45,132			(8,750		)	81,053			115,049
Other operating costs and expenses	37,426			38,979			33,597			31,924			32,540
Total benefits and expenses	683,198			1,040,183			(517,201		)	986,065			571,231
Income (loss) before income taxes	23,196			(39,463		)	66,216			207,673			114,242
Income tax expense (benefit) (c)	4,606			(9,453		)	12,393			38,345			20,339
Net income (loss) (a)(b)(c)	$	18,590		$	(30,010	)	$	53,823		$	169,328		$	93,903
Earnings (loss) per common share	$	0.20		$	(0.33	)	$	0.59		$	1.87		$	1.04
Earnings (loss) per common share - assuming dilution (a)(b)(c)	$	0.20		$	(0.33	)	$	0.59		$	1.85		$	1.03
Weighted average common shares outstanding (thousands):
Earnings (loss) per common share	91,103			90,883			90,555			90,486			90,327
Earnings (loss) per common share - assuming dilution	91,785			91,744			91,622			91,651			91,271

(a) Q3 2018 includes a benefit from the revision of assumptions used in determining reserves held for lifetime income benefit riders. The impact decreased interest sensitive and index product benefits by $53.6 million and increased net income and earnings per common share - assuming dilution by $42.0 million and $0.46 per share, respectively.

(b) Q3 2018 includes a benefit from unlocking which reduced amortization of deferred sales inducements and deferred policy acquisition costs by $21.5 million and $30.6 million, respectively, and increased net income and earnings per common share - assuming dilution by $40.8 million and $0.45 per share, respectively.

(c) Q3 2018 includes an income tax benefit from a worthless stock deduction related to a wholly-owned subsidiary which increased net income and earnings per common share - assuming dilution by $7.4 million and $0.08 per share, respectively.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2019

Unaudited (Dollars in thousands, except per share data)

NON-GAAP FINANCIAL MEASURES

In addition to net income (loss), we have consistently utilized non-GAAP operating income and non-GAAP 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. Non-GAAP 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 non-GAAP operating income eliminate the impact of fair value accounting for our fixed index annuity business. These adjustments are not economic in nature but rather impact the timing of reported results. We believe the combined presentation and evaluation of non-GAAP 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 Non-GAAP Operating Income

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2019			2018			2019			2018
Net income (loss)	$	18,590		$	93,903		$	(11,420	)	$	234,865
Adjustments to arrive at non-GAAP operating income: (a)
Net realized investment losses, including OTTI	2,625			25,624			2,930			25,647
Change in fair value of derivatives and embedded derivatives - fixed index annuities	99,868			(30,094		)	250,812			(108,912		)
Change in fair value of derivatives - debt	854			(739		)	1,490			(2,571		)
Income taxes	(22,346		)	(2,046		)	(54,819		)	15,313
Non-GAAP operating income	$	99,591		$	86,648		$	188,993		$	164,342
Per common share - assuming dilution:
Net income (loss)	$	0.20		$	1.03		$	(0.13	)	$	2.58
Adjustments to arrive at non-GAAP operating income:
Anti-dilutive effect of net loss	—			—			0.01			—
Net realized investment losses, including OTTI	0.03			0.28			0.03			0.28
Change in fair value of derivatives and embedded derivatives - fixed index annuities	1.09			(0.33		)	2.73			(1.19		)
Change in fair value of derivatives - debt	0.01			(0.01		)	0.02			(0.03		)
Income taxes	(0.24		)	(0.02		)	(0.60		)	0.16
Non-GAAP operating income	$	1.09		$	0.95		$	2.06		$	1.80

(a) Adjustments to net income (loss) to arrive at non-GAAP operating income are presented net of related adjustments to amortization of deferred sales inducements (DSI) and deferred policy acquisition costs (DAC) where applicable.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2019

Unaudited (Dollars in thousands)

NON-GAAP FINANCIAL MEASURES

Summary of Adjustments to Arrive at Non-GAAP Operating Income

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2019			2018			2019			2018
Net realized investment gains and losses, including OTTI:
Net realized losses on investments, including OTTI	$	5,045		$	40,777		$	5,608		$	41,382
Amortization of DAC and DSI	(2,420		)	(15,153		)	(2,678		)	(15,735		)
Income taxes	(567		)	(8,716		)	(633		)	(8,721		)
	$	2,058		$	16,908		$	2,297		$	16,926
Change in fair value of derivatives and embedded derivatives:
Index annuities	$	218,046		$	(72,469	)	$	459,166		$	(230,280	)
Interest rate caps and swap	854			(739		)	1,490			(2,571		)
Amortization of DAC and DSI	(118,178		)	42,375			(208,354		)	121,368
Income taxes	(21,779		)	6,670			(54,186		)	24,034
	$	78,943		$	(24,163	)	$	198,116		$	(87,449	)

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2019

Unaudited (Dollars in thousands, except per share data)

NON-GAAP FINANCIAL MEASURES

Quarterly Summary - Most Recent 5 Quarters

Reconciliation from Net Income (Loss) to Non-GAAP Operating Income

	Q2 2019			Q1 2019			Q4 2018			Q3 2018			Q2 2018
Net income (loss)	$	18,590		$	(30,010	)	$	53,823		$	169,328		$	93,903
Adjustments to arrive at non-GAAP operating income: (a)
Net realized investment losses, including OTTI	2,625			305			9,525			10,278			25,624
Change in fair value of derivatives and embedded derivatives - fixed index annuities	99,868			150,944			36,186			545			(30,094		)
Change in fair value of derivatives - debt	854			636			1,276			(597		)	(739		)
Income taxes	(22,346		)	(32,473		)	(10,475		)	(8,491		)	(2,046		)
Non-GAAP operating income (b)(c)	$	99,591		$	89,402		$	90,335		$	171,063		$	86,648
Per common share - assuming dilution:
Net income (loss)	$	0.20		$	(0.33	)	$	0.59		$	1.85		$	1.03
Adjustments to arrive at non-GAAP operating income:
Net realized investment losses, including OTTI	0.03			—			0.10			0.11			0.28
Change in fair value of derivatives and embedded derivatives - fixed index annuities	1.09			1.64			0.40			0.01			(0.33		)
Change in fair value of derivatives - debt	0.01			0.01			0.01			(0.01		)	(0.01		)
Income taxes	(0.24		)	(0.35		)	(0.11		)	(0.09		)	(0.02		)
Non-GAAP operating income (b)(c)	$	1.09		$	0.97		$	0.99		$	1.87		$	0.95

(a) Adjustments to net income (loss) to arrive at non-GAAP operating income are presented net of related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs where applicable.

(b) Q3 2018 includes a benefit from the revision of assumptions used in determining reserves held for lifetime income benefit riders. The impact decreased interest sensitive and index product benefits by $53.6 million and increased non-GAAP operating income and non-GAAP operating income per common share - assuming dilution by $42.0 million and $0.46 per share, respectively.

(c) Q3 2018 includes a benefit from unlocking which reduced amortization of deferred sales inducements and deferred policy acquisition costs by $20.5 million and $28.7 million, respectively, and increased non-GAAP operating income and non-GAAP operating income per common share- assuming dilution by $38.5 million and $0.42 per share, respectively.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2019

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NON-GAAP FINANCIAL MEASURES

Summary of Adjustments to Arrive at Non-GAAP Operating Income

	Q2 2019			Q1 2019			Q4 2018			Q3 2018			Q2 2018
Net realized (gains) losses on investments	$	3,832		$	563		$	(3,097	)	$	2,196		$	38,381
Net OTTI losses recognized in operations	1,213			—			18,980			14,373			2,396
Change in fair value of derivatives	(108,662		)	(524,567		)	1,017,555			(408,680		)	28,741
Increase (decrease) in total revenues	(103,617		)	(524,004		)	1,033,438			(392,111		)	69,518
Amortization of deferred sales inducements	49,101			35,494			77,745			(7,219		)	(9,888		)
Change in fair value of embedded derivatives	(327,562		)	(766,323		)	804,026			(383,716		)	101,949
Amortization of deferred policy acquisition costs	71,497			54,940			104,680			(11,402		)	(17,334		)
Increase (decrease) in total benefits and expenses	(206,964		)	(675,889		)	986,451			(402,337		)	74,727
Increase (decrease) in income (loss) before income taxes	103,347			151,885			46,987			10,226			(5,209		)
Increase in income tax expense (benefit)	22,346			32,473			10,475			8,491			2,046
Increase (decrease) in net income (loss)	$	81,001		$	119,412		$	36,512		$	1,735		$	(7,255	)

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2019

Unaudited (Dollars in thousands, except share and per share data)

Capitalization/Book Value per Share

	Q2 2019			Q1 2019			Q4 2018			Q3 2018			Q2 2018
Capitalization:
Notes payable	$	500,000		$	500,000		$	500,000		$	500,000		$	500,000
Subordinated debentures payable to subsidiary trusts	247,294			247,227			247,161			247,096			247,032
Total debt	747,294			747,227			747,161			747,096			747,032
Total stockholders’ equity	3,497,475			2,939,537			2,399,101			2,489,296			2,426,825
Total capitalization	4,244,769			3,686,764			3,146,262			3,236,392			3,173,857
Accumulated other comprehensive (income) loss (AOCI)	(1,049,984		)	(513,697		)	52,432			(70,288		)	(180,406		)
Total capitalization excluding AOCI (a)	$	3,194,785		$	3,173,067		$	3,198,694		$	3,166,104		$	2,993,451
Total stockholders’ equity	$	3,497,475		$	2,939,537		$	2,399,101		$	2,489,296		$	2,426,825
Accumulated other comprehensive (income) loss	(1,049,984		)	(513,697		)	52,432			(70,288		)	(180,406		)
Total stockholders’ equity excluding AOCI(a)	$	2,447,491		$	2,425,840		$	2,451,533		$	2,419,008		$	2,246,419
Common shares outstanding	90,936,324			90,784,123			90,369,229			90,277,626			90,233,346
Book Value per Share: (b)
Book value per share including AOCI	$	38.46		$	32.38		$	26.55		$	27.57		$	26.89
Book value per share excluding AOCI (a)	$	26.91		$	26.72		$	27.13		$	26.80		$	24.90
Debt-to-Capital Ratios: (c)
Senior debt / Total capitalization	15.7		%	15.8		%	15.6		%	15.8		%	16.7		%
Total debt / Total capitalization	23.4		%	23.5		%	23.4		%	23.6		%	25.0		%

(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) 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.

(c) Debt-to-capital ratios are computed using total capitalization excluding AOCI.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2019

Unaudited (Dollars in thousands)

Spread Results

Six Months Ended   June 30,
2019	2018		Q2 2019	Q1 2019	Q4 2018	Q3 2018	Q2 2018
4.49%	4.42%	Average yield on invested assets	4.51%	4.48%	4.51%	4.54%	4.47%
1.89%	1.82%	Aggregate cost of money	1.88%	1.90%	1.95%	1.87%	1.83%
2.60%	2.60%	Aggregate investment spread	2.63%	2.58%	2.56%	2.67%	2.64%
		Impact of:
0.03%	0.06%	Investment yield - additional prepayment income	0.04%	0.01%	0.09%	0.11%	0.07%
0.03%	0.04%	Cost of money effect of over hedging	0.04%	0.02%	0.03%	0.07%	0.06%
$50,309,342	$47,346,876	Weighted average investments	$50,709,966	$49,908,718	$49,258,548	$48,466,817	$47,795,388

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

Six Months Ended   June 30,
2019			2018				Q2 2019			Q1 2019			Q4 2018			Q3 2018			Q2 2018
						Included in interest sensitive and index product benefits:
$	217,677		$	758,545		Index credits	$	161,752		$	55,925		$	157,999		$	369,011		$	334,605
97,914			107,989			Interest credited	50,478			47,436			53,559			52,618			52,922
						Included in change in fair value of derivatives:
(224,890		)	(767,173		)	Proceeds received at option expiration	(166,430		)	(58,460		)	(162,433		)	(378,149		)	(341,616		)
397,503			349,197			Pro rata amortization of option cost	199,006			198,497			198,999			191,362			180,465
$	488,204		$	448,558		Cost of money for deferred annuities	$	244,806		$	243,398		$	248,124		$	234,842		$	226,376
$	51,669,061		$	49,158,118		Weighted average liability balance outstanding	$	52,009,407		$	51,328,715		$	50,832,984		$	50,273,893		$	49,541,746

Annuity Account Balance Rollforward

Six Months Ended   June 30,
2019			2018				Q2 2019			Q1 2019			Q4 2018			Q3 2018			Q2 2018
$	51,053,450		$	48,400,755		Account balances at beginning of period	$	51,603,979		$	51,053,450		$	50,612,519		$	49,935,266		$	49,148,224
2,605,690			1,997,591			Net deposits	1,425,325			1,180,365			1,040,857			929,480			1,066,857
93,991			93,137			Premium bonuses	48,370			45,621			44,450			41,878			49,467
315,591			866,534			Fixed interest credited and index credits	212,230			103,361			211,558			421,629			387,527
(35,936		)	(32,802		)	Surrender charges	(19,480		)	(16,456		)	(15,710		)	(17,132		)	(16,520		)
(77,730		)	(72,927		)	Lifetime income benefit rider fees	(41,220		)	(36,510		)	(44,684		)	(41,233		)	(38,486		)
(1,540,221		)	(1,317,022		)	Surrenders, withdrawals, deaths, etc.	(814,369		)	(725,852		)	(795,540		)	(657,369		)	(661,803		)
$	52,414,835		$	49,935,266		Account balances at end of period	$	52,414,835		$	51,603,979		$	51,053,450		$	50,612,519		$	49,935,266

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2019

Unaudited (Dollars in thousands)

Annuity Deposits by Product Type

Six Months Ended   June 30,
2019		2018			Q2 2019		Q1 2019		Q4 2018		Q3 2018		Q2 2018
				American Equity Life:
$	2,238,662	$	1,786,025	Fixed index annuities	$	1,211,004	$	1,027,658	$	944,097	$	830,759	$	952,675
7,062		31,672		Annual reset fixed rate annuities	3,614		3,448		5,574		8,390		15,455
714		2,889		Multi-year fixed rate annuities	566		148		332		360		888
3,815		15,943		Single premium immediate annuities	1,747		2,068		2,893		4,977		5,313
2,250,253		1,836,529			1,216,931		1,033,322		952,896		844,486		974,331
				Eagle Life:
413,038		333,683		Fixed index annuities	235,558		177,480		162,847		163,871		173,119
193		621		Annual reset fixed rate annuities	66		127		484		450		348
72,572		61,443		Multi-year fixed rate annuities	47,004		25,568		12,802		34,851		53,419
485,803		395,747			282,628		203,175		176,133		199,172		226,886
				Consolidated:
2,651,700		2,119,708		Fixed index annuities	1,446,562		1,205,138		1,106,944		994,630		1,125,794
7,255		32,293		Annual reset fixed rate annuities	3,680		3,575		6,058		8,840		15,803
73,286		64,332		Multi-year fixed rate annuities	47,570		25,716		13,134		35,211		54,307
3,815		15,943		Single premium immediate annuities	1,747		2,068		2,893		4,977		5,313
2,736,056		2,232,276		Total before coinsurance ceded	1,499,559		1,236,497		1,129,029		1,043,658		1,201,217
126,551		218,742		Coinsurance ceded	72,487		54,064		85,279		109,201		129,047
$	2,609,505	$	2,013,534	Net after coinsurance ceded	$	1,427,072	$	1,182,433	$	1,043,750	$	934,457	$	1,072,170

Surrender Charge Protection and Account Values by Product Type

Annuity Surrender Charges and Net (of Coinsurance) Account Values at June 30, 2019:

	Surrender Charge			Net Account Value
Product Type	Avg. Years At Issue	Avg. Years Remaining	Avg. % Remaining	Dollars in Thousands		%
Fixed Index Annuities	13.1	7.3	11.8%	$	50,360,466	96.1	%
Annual Reset Fixed Rate Annuities	9.7	3.6	6.6%	1,455,024		2.8	%
Multi-Year Fixed Rate Annuities	4.4	0.9	2.1%	599,345		1.1	%
Total	13.0	7.2	11.5%	$	52,414,835	100.0	%

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2019

Unaudited (Dollars in thousands)

Annuity Liability Characteristics

Surrender Charge Percentages:	Fixed Annuities Account Value		Fixed Index Annuities Account Value
No surrender charge	$	832,720	$	2,547,068
0.0% < 2.0%	10,840		158,025
2.0% < 3.0%	8,298		392,972
3.0% < 4.0%	34,544		739,629
4.0% < 5.0%	24,527		742,044
5.0% < 6.0%	58,341		1,871,958
6.0% < 7.0%	292,799		1,461,916
7.0% < 8.0%	122,931		3,855,716
8.0% < 9.0%	47,275		3,491,849
9.0% < 10.0%	66,194		3,741,620
10.0% or greater	555,900		31,357,669
	$	2,054,369	$	50,360,466

Surrender Charge Expiration By Year:	Fixed and Fixed Index Annuities Account Value		Weighted Average Surrender Charge
Out of Surrender Charge	$	3,379,788	0.00	%
2019	207,475		2.30	%
2020	772,810		3.55	%
2021	1,260,451		5.23	%
2022	1,816,585		6.40	%
2023	4,491,415		7.42	%
2024	5,265,670		9.38	%
2025	6,011,345		10.14	%
2026	5,284,161		11.52	%
2027	4,469,291		13.01	%
2028	4,717,094		13.82	%
2029	4,608,479		15.17	%
2030	2,631,597		17.73	%
2031	3,205,655		18.31	%
2032	2,185,329		18.72	%
2033	1,204,925		19.17	%
2034	711,959		19.68	%
2035	190,806		20.00	%
	$	52,414,835	11.52	%

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2019

Unaudited (Dollars in thousands)

Annuity Liability Characteristics

Credited Rate vs. Ultimate Minimum Guaranteed Rate Differential:	Fixed Annuities Account Value		Fixed Index Annuities Account Value
No differential	$	987,706	$	1,362,170
› 0.0% - 0.25%	53,773		187,907
› 0.25% - 0.5%	245,051		3,501
› 0.5% - 1.0%	42,866		15,784
› 1.0% - 1.5%	11,072		—
1.00% ultimate guarantee - 2.39% wtd avg interest rate (a)	463,923		659,792
1.50% ultimate guarantee - 1.22% wtd avg interest rate (a)	150,042		3,502,903
1.75% ultimate guarantee - 2.05% wtd avg interest rate (a)	16,037		222,048
2.00% ultimate guarantee - 1.85% wtd avg interest rate (a)	83,899		—
2.25% ultimate guarantee - 1.88% wtd avg interest rate (a)	—		860,663
3.00% ultimate guarantee - 2.08% wtd avg interest rate (a)	—		1,631,684
Allocated to index strategies (see tables that follow)	—		41,914,014
	$	2,054,369	$	50,360,466

(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, 2019 for fixed annuities and funds allocated to the fixed rate strategy for fixed index annuities would decrease by 0.16%.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2019

Unaudited (Dollars in thousands)

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
At minimum	$	1,751	$	91,528	$	4,076,935	$	71,454	$	170,697
1.75% - 3%	7,500,978		—		—		—		—
3% - 4%	474,162		12,694		—		—		—
4% - 5%	643,798		230,833		2,422,287		—		—
5% - 6%	594,239		195,085		36,928		—		—
6% - 7%	—		—		430		—		—
>= 7%	8,089		7,520		727		6,862		—

Annual Monthly Average and Point-to-Point with Participation Rates
	Minimum Guaranteed Participation Rate
	10%		20% - 25%		35%		50% +
Current Participation Rate
At minimum	$	906	$	374,303	$	108,369	$	122,315
< 20%	687,319		—		—		—
20% - 40%	925,615		167,683		—		—
40% - 60%	2,686,266		97,691		62,212		—
60% - 100%	281,776		—		—		—
> 100%	172,083		—		—		—

S&P 500 Monthly Point-to-Point - Minimum Guaranteed Monthly Cap = 1.0%
Current Cap
At minimum	$	1,450,986
1.10% - 1.30%	7,845,619
1.40% - 1.60%	3,067,397
1.70% - 2.00%	651,432
>= 2.10%	1,003

Volatility Control Index
Current Asset Fee
At Maximum	$	—
0.75% - 1.75%	424,024
2.25% - 2.75%	533,979
3.00% - 3.50%	3,295,941
3.75% - 4.50%	1,288,397

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 0.68% based upon prices of options for the week ended July 16, 2019.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2019

Unaudited (Dollars in thousands)

Summary of Invested Assets

	June 30, 2019				December 31, 2018
	Carrying Amount		Percent		Carrying Amount		Percent
Fixed maturity securities:
United States Government full faith and credit	$	12,023	0.1	%	$	11,652	—	%
United States Government sponsored agencies	1,214,609		2.2	%	1,138,529		2.3	%
United States municipalities, states and territories	4,299,962		7.8	%	4,126,267		8.3	%
Foreign government obligations	233,095		0.4	%	230,274		0.5	%
Corporate securities	31,312,263		57.2	%	28,371,514		57.4	%
Residential mortgage backed securities	1,338,946		2.4	%	1,202,159		2.4	%
Commercial mortgage backed securities	5,673,990		10.4	%	5,379,003		10.9	%
Other asset backed securities	6,086,415		11.1	%	5,464,329		11.1	%
Total fixed maturity securities	50,171,303		91.6	%	45,923,727		92.9	%
Mortgage loans on real estate	3,083,675		5.6	%	2,943,091		6.0	%
Derivative instruments	888,208		1.6	%	205,149		0.4	%
Other investments	642,219		1.2	%	355,531		0.7	%
	$	54,785,405	100.0	%	$	49,427,498	100.0	%

Credit Quality of Fixed Maturity Securities - June 30, 2019

NAIC Designation	Carrying Amount		Percent		Rating Agency Rating	Carrying Amount		Percent
1	$	29,363,924	58.5	%	Aaa/Aa/A	$	29,650,285	59.1	%
2	19,421,029		38.7	%	Baa	19,089,841		38.0	%
3	1,213,115		2.4	%	Ba	1,089,291		2.2	%
4	166,568		0.4	%	B	140,148		0.3	%
5	—		—	%	Caa	99,000		0.2	%
6	6,667		—	%	Ca and lower	102,738		0.2	%
	$	50,171,303	100.0	%		$	50,171,303	100.0	%

Watch List Securities - June 30, 2019

General Description	Amortized Cost		Unrealized Gains (Losses)			Fair Value		Months Below Amortized Cost
Below investment grade
Corporate securities:
Consumer discretionary	$	52,561	$	(6,178	)	$	46,383	0 - 53
Energy	66,817		(15,523		)	51,294		0 - 58
Industrials	563		(250		)	313		1
Materials	3,990		1,382			5,372		—
Other asset backed securities:
Financials	977		—			977		—
Industrials	8,742		(2,648		)	6,094		44
	$	133,650	$	(23,217	)	$	110,433

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2019

Unaudited (Dollars in thousands)

Fixed Maturity Securities by Sector

	June 30, 2019				December 31, 2018
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available for sale:
United States Government full faith and credit and sponsored agencies	$	1,215,244	$	1,226,632	$	1,220,340	$	1,150,181
United States municipalities, states and territories	3,911,329		4,299,962		3,880,703		4,126,267
Foreign government obligations	216,161		233,095		226,860		230,274
Corporate securities:
Capital goods	2,508,048		2,686,319		2,491,620		2,485,845
Consumer discretionary	5,905,490		6,297,587		5,742,182		5,665,192
Energy	2,563,826		2,686,006		2,543,114		2,468,545
Financials	6,402,601		6,856,173		6,046,859		6,054,591
Government non-guaranteed	564,688		620,149		564,912		578,657
Industrials	311,309		329,821		302,078		298,620
Information technology	1,878,573		2,011,300		1,794,676		1,781,800
Materials	1,872,771		1,984,125		1,771,359		1,759,325
Other	450,404		478,854		434,228		432,739
Telecommunications	1,578,504		1,692,936		1,604,307		1,594,978
Transportation	1,470,234		1,557,261		1,438,723		1,428,378
Utilities	3,771,847		4,111,732		3,749,080		3,822,844
Residential mortgage backed securities:
Government agency	616,844		672,614		604,998		636,632
Prime	513,806		542,697		420,350		434,991
Alt-A	102,268		123,635		109,275		130,536
Commercial mortgage backed securities:
Government agency	418,783		440,638		442,287		438,063
Non-agency	5,065,030		5,233,352		5,049,984		4,940,940
Other asset backed securities:
Auto	410,101		419,123		315,439		318,616
Energy	7,587		8,699		—		—
Financials	4,967		5,488		8,322		8,931
Industrials	195,075		200,408		217,358		216,724
Collateralized loan obligations	4,871,305		4,743,188		4,579,467		4,320,168
Military housing	445,713		501,039		438,350		464,071
Other	205,448		208,470		134,319		135,819
	$	47,477,956	$	50,171,303	$	46,131,190	$	45,923,727

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2019

Unaudited (Dollars in thousands)

Mortgage Loans on Commercial Real Estate

	June 30, 2019						December 31, 2018
	Principal			Percent			Principal		Percent
Geographic distribution
East	$	586,068		19.0		%	$	586,773	19.9	%
Middle Atlantic	210,993			6.8		%	168,969		5.7	%
Mountain	374,429			12.1		%	357,642		12.1	%
New England	9,286			0.3		%	9,418		0.3	%
Pacific	560,882			18.1		%	521,363		17.7	%
South Atlantic	704,523			22.8		%	694,599		23.5	%
West North Central	282,706			9.1		%	291,890		9.9	%
West South Central	363,671			11.8		%	321,810		10.9	%
	$	3,092,558		100.0		%	$	2,952,464	100.0	%
Property type distribution
Office	$	243,948		7.9		%	$	268,932	9.1	%
Medical office	31,402			1.0		%	33,467		1.1	%
Retail	1,126,770			36.4		%	1,091,627		37.0	%
Industrial/Warehouse	856,481			27.7		%	762,887		25.8	%
Apartment	633,492			20.5		%	600,638		20.3	%
Agricultural	39,226			1.3		%	25,000		0.9	%
Mixed use/other	161,239			5.2		%	169,913		5.8	%
	$	3,092,558		100.0		%	$	2,952,464	100.0	%
	June 30, 2019			December 31, 2018
Credit exposure - by payment activity
Performing	$	3,092,558		$	2,952,464
In workout	—			—
Delinquent	—			—
Collateral dependent	—			—
	3,092,558			2,952,464
Specific loan loss allowance	(229		)	(229		)
General loan loss allowance	(7,600		)	(8,010		)
Deferred prepayment fees	(1,054		)	(1,134		)
	$	3,083,675		$	2,943,091

Page 16

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2019

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) 273-3763, sschwartz@american-equity.com

Common Stock and Dividend Information:

New York Stock Exchange symbol: “AEL”

	High	Low	Close	Dividend Declared
2019
First Quarter	$33.57	$26.34	$27.02	$0.00
Second Quarter	$30.91	$25.84	$27.16	$0.00
2018
First Quarter	$35.79	$28.90	$29.36	$0.00
Second Quarter	$37.16	$27.06	$36.00	$0.00
Third Quarter	$38.57	$34.51	$35.36	$0.00
Fourth Quarter	$36.39	$25.27	$27.94	$0.28
2017
First Quarter	$28.00	$21.66	$23.63	$0.00
Second Quarter	$26.65	$22.23	$26.28	$0.00
Third Quarter	$29.43	$25.43	$29.08	$0.00
Fourth Quarter	$32.54	$28.06	$30.73	$0.26

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 website at www.american-equity.com.

Page 17

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2019

Research Analyst Coverage

Erik Bass

Autonomous Research US LP

(646) 561-6248

ebass@autonomous.com

Randy Binner

B. Riley FBR, Inc.

(703) 312-1890

rbinner@fbr.com

Daniel Bergman

Citi Research

(212) 816-2132

daniel.bergman@citi.com

Thomas Gallagher

Evercore ISI

(212) 446-9439

thomas.gallagher@evercoreisi.com

Alex Scott

Goldman Sachs & Co. LLC

(917) 343-7160

alex.scott@gs.com

Pablo Singzon II

JP Morgan

(212) 622-2295

pablo.s.singzon@jpmorgan.com

Ryan Krueger

Keefe, Bruyette & Woods

(860) 722-5930

rkrueger@kbw.com

C. Gregory Peters

Raymond James & Associates, Inc.

(727) 567-1534

greg.peters@raymondjames.com

Mark A. Dwelle

RBC Capital Markets, LLC

(804) 782-4008

mark.dwelle@rbccm.com

John Barnidge

Sandler O'Neill & Partners, L.P.

(312) 281-3412

jbarnidge@sandleroneill.com

Mark Hughes

SunTrust Robinson Humphrey

(615) 748-4422

mark.hughes@suntrust.com

John Nadel

UBS Investment Bank

(212) 713-4299

john.nadel@ubs.com

Page 18