Schedule II - Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2019

Condensed Financial Information Disclosure [Abstract]

Schedule II - Condensed Financial Information of Registrant



	December 31,
	2019		2018
Assets
Cash and cash equivalents	$	332,526	$	68,876
Equity securities of subsidiary trusts	4,785		7,437
Receivable from subsidiaries	1,210		1,170
Deferred income taxes	5,818		7,905
Other assets	3,067		2,751
	347,406		88,139
Investment in and advances to subsidiaries	4,891,431		3,066,039
Total assets	$	5,238,837	$	3,154,178

Liabilities and Stockholders' Equity
Liabilities:
Notes payable	$	495,116	$	494,591
Subordinated debentures payable to subsidiary trusts	157,265		242,982
Federal income tax payable	9,274		8,892
Other liabilities	7,063		8,612
Total liabilities	668,718		755,077
Stockholders' equity:
Preferred stock	16		—
Common stock	91,107		90,369
Additional paid-in capital	1,212,311		811,186
Accumulated other comprehensive income (loss)	1,497,921		(52,432		)
Retained earnings	1,768,764		1,549,978
Total stockholders' equity	4,570,119		2,399,101
Total liabilities and stockholders' equity	$	5,238,837	$	3,154,178

See accompanying note to condensed financial statements.

See accompanying Report of Independent Registered Public Accounting Firm.



	Year Ended December 31,
	2019			2018		2017
Revenues:
Net investment income	$	1,755		$	773	$	492
Dividends from subsidiary trusts	469			461		410
Dividends from dissolved subsidiaries	—			10,393		—
Investment advisory fees	107,945			92,335		83,941
Surplus note interest from subsidiary	4,080			4,080		4,080
Change in fair value of derivatives	(1,650		)	1,051		(412		)
Loss on extinguishment of debt	(2,001		)	—		(18,817		)
Total revenues	110,598			109,093		69,694

Expenses:
Interest expense on notes and loan payable	25,525			25,498		30,368
Interest expense on subordinated debentures issued to subsidiary trusts	15,764			15,491		14,124
Other operating costs and expenses	28,357			18,579		9,234
Total expenses	69,646			59,568		53,726
Income before income taxes and equity in undistributed income of subsidiaries	40,952			49,525		15,968
Income tax expense	11,586			2,603		6,895
Income before equity in undistributed income of subsidiaries	29,366			46,922		9,073
Equity in undistributed income of subsidiaries	216,724			411,094		165,572
Net income	$	246,090		$	458,016	$	174,645

See accompanying note to condensed financial statements.

See accompanying Report of Independent Registered Public Accounting Firm.



	Year Ended December 31,
	2019			2018			2017
Operating activities
Net income	$	246,090		$	458,016		$	174,645
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for depreciation and amortization	1,136			916			1,610
Accrual of discount on equity security	(8		)	(8		)	(7		)
Equity in undistributed income of subsidiaries	(216,724		)	(411,094		)	(165,572		)
Change in fair value of derivatives	945			(1,325		)	(657		)
Loss on extinguishment of debt	2,001			—			18,817
Accrual of discount on debenture issued to subsidiary trust	270			254			236
Share-based compensation	2,923			1,626			951
Deferred income taxes	2,087			40			1,583
Changes in operating assets and liabilities:
Receivable from subsidiaries	(40		)	(1,004		)	16
Federal income tax recoverable/payable	382			9,951			(4,673		)
Other assets	(1,229		)	(229		)	158
Other liabilities	(1,846		)	4,860			(12,427		)
Net cash provided by operating activities	35,987			62,003			14,680

Investing activities
Repayment of equity securities	$	2,660		$	—		$	—
Contribution to subsidiary	(50,000		)	—			—
Purchases of property, plant and equipment	(117		)	(29		)	(45		)
Net cash used in investing activities	(47,457		)	(29		)	(45		)

Financing activities
Financing fees incurred and deferred	$	—		$	—		$	(5,817	)
Repayment of notes payable	—			—			(413,252		)
Repayment of loan payable	—			—			(100,000		)
Proceeds from issuance of notes payable	—			—			499,650
Repayment of subordinated debentures	(88,160		)	—			—
Proceeds from issuance of common stock, net	1,691			9,681			14,028
Proceeds from issuance of preferred stock, net	388,893			—			—
Dividends paid	(27,304		)	(25,265		)	(23,152		)
Net cash provided by (used in) financing activities	275,120			(15,584		)	(28,543		)
Increase (decrease) in cash and cash equivalents	263,650			46,390			(13,908		)
Cash and cash equivalents at beginning of year	68,876			22,486			36,394
Cash and cash equivalents at end of year	$	332,526		$	68,876		$	22,486

Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest on notes and loan payable	$	25,000		$	25,000		$	40,537
Interest on subordinated debentures	16,891			13,593			14,573

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 our audited consolidated financial statements in this Form 10-K for a description of the Parent Company's notes payable and subordinated debentures payable to subsidiary trusts.