Schedule II - Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2015

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Schedule II - Condensed Financial Information of Registrant



	December 31,
	2015		2014
Assets
Cash and cash equivalents	$	38,903	$	61,139
Equity securities of subsidiary trusts	7,415		7,409
Receivable from subsidiaries	207		221
Deferred income taxes	11,645		20,612
Federal income tax recoverable, including amount from subsidiaries	7,747		10,430
Other assets, including 2015 notes hedges	14,041		47,308
	79,958		147,119
Investment in and advances to subsidiaries	2,526,972		2,708,085
Total assets	$	2,606,930	$	2,855,204

Liabilities and Stockholders' Equity
Liabilities:
Notes payable	$	400,000	$	421,679
Subordinated debentures payable to subsidiary trusts	246,450		246,243
Other liabilities, including 2015 notes embedded derivative	15,945		47,406
Total liabilities	662,395		715,328
Stockholders' equity:
Common stock	81,354		76,062
Additional paid-in capital	630,367		513,218
Accumulated other comprehensive income	201,663		721,401
Retained earnings	1,031,151		829,195
Total stockholders' equity	1,944,535		2,139,876
Total liabilities and stockholders' equity	$	2,606,930	$	2,855,204

See accompanying note to condensed financial statements.

See accompanying Report of Independent Registered Public Accounting Firm.



	Year Ended December 31,
	2015			2014			2013
Revenues:
Net investment income	$	62		$	130		$	130
Dividends from subsidiary trusts	363			360			361
Investment advisory fees	65,957			58,044			44,469
Surplus note interest from subsidiary	4,080			4,080			4,080
Change in fair value of derivatives	(8,225		)	(17,122		)	144,012
Loss on extinguishment of debt	—			(12,502		)	(32,515		)
Total revenues	62,237			32,990			160,537
Expenses:
Change in fair value of embedded derivatives	(4,516		)	(15,227		)	141,974
Interest expense on notes payable	28,849			36,370			38,870
Interest expense on subordinated debentures issued to subsidiary trusts	12,239			12,122			12,088
Other operating costs and expenses	8,195			7,928			8,163
Total expenses	44,767			41,193			201,095
Income (loss) before income taxes and equity in undistributed income of subsidiaries	17,470			(8,203		)	(40,558		)
Income tax expense (benefit)	7,338			664			(13,880		)
Income (loss) before equity in undistributed income of subsidiaries	10,132			(8,867		)	(26,678		)
Equity in undistributed income of subsidiaries	209,698			134,890			279,961
Net income	$	219,830		$	126,023		$	253,283

See accompanying note to condensed financial statements.

See accompanying Report of Independent Registered Public Accounting Firm.



	Year Ended December 31,
	2015			2014			2013
Operating activities
Net income	$	219,830		$	126,023		$	253,283
Adjustments to reconcile net income to net cash provided by operating activities:
Change in fair value of 2015 notes embedded conversion derivative	(4,516		)	(15,227		)	141,974
Provision for depreciation and amortization	1,613			2,081			2,831
Accrual of discount on equity security	(6		)	(6		)	(5		)
Equity in undistributed income of subsidiaries	(209,698		)	(134,890		)	(279,961		)
Accrual of discount on contingent convertible notes	698			4,417			12,417
Change in fair value of derivatives	6,377			15,619			(144,012		)
Loss on extinguishment of debt	—			12,502			32,515
Accrual of discount on debenture issued to subsidiary trust	207			193			181
Share-based compensation	1,026			1,141			1,407
ESOP compensation	—			82			110
Deferred income taxes (benefits)	8,967			6,439			(5,202		)
Other	—			(2,235		)	(3,608		)
Changes in operating assets and liabilities:
Receivable from subsidiaries	93			2,208			995
Federal income tax recoverable	2,683			1,121			62
Other assets	(4		)	378			(1,945		)
Other liabilities	(1,664		)	(7,256		)	20,131
Net cash provided by operating activities	25,606			12,590			31,173

Investing activities
Capital contributions to subsidiaries	$	(120,000	)	$	—		$	—
Net cash used in investing activities	(120,000		)	—			—

Financing activities
Financing fees incurred and deferred	$	—		$	(100	)	$	(11,942	)
Proceeds from notes payable	—			—			415,000
Repayments of notes payable	(48,152		)	(219,094		)	(234,154		)
Net proceeds from settlement of notes hedges and warrants	25,775			16,558			22,170
Excess tax benefits realized from share-based compensation plans	—			184			159
Proceeds from issuance of common stock	112,481			13,681			31,764
Dividends paid	(17,946		)	(15,221		)	(12,849		)
Net cash provided by (used in) financing activities	72,158			(203,992		)	210,148
Increase (decrease) in cash and cash equivalents	(22,236		)	(191,402		)	241,321
Cash and cash equivalents at beginning of year	61,139			252,541			11,220
Cash and cash equivalents at end of year	$	38,903		$	61,139		$	252,541

Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest on notes payable	$	27,283		$	31,206		$	13,758
Interest on subordinated debentures	11,833			11,765			11,850
Non-cash financing activity:
Common stock issued in extinguishment of debt	—			95,993			117,463
Common stock issued to settle warrants that have expired	48			—			—

See accompanying note to condensed financial statements.

See accompanying Report of Independent Registered Public Accounting Firm.

1. Basis of Presentation

The accompanying condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto of American Equity Investment Life Holding Company (Parent Company).

In the Parent Company financial statements, its investment in and advances to subsidiaries are stated at cost plus equity in undistributed income (losses) of subsidiaries since the date of acquisition and net unrealized gains/losses on the subsidiaries' fixed maturity securities classified as "available for sale" and equity securities.

See Notes 9 and 10 to the consolidated financial statements for a description of the Parent Company's notes payable and subordinated debentures payable to subsidiary trusts.