American Equity Reports Third Quarter 2016 Results

American Equity Investment Life Holding Company (NYSE: AEL), a leading issuer of fixed index annuities, today reported third quarter 2016 net loss of $7.4 million, or $0.09 per diluted common share, compared to net income of $97.3 million, or $1.19 per diluted common share, for third quarter 2015.

Operating loss 1 for the third quarter of 2016 was $4.7 million, or $0.05 per diluted common share, compared to operating income of $45.9 million, or $0.56 per diluted common share, for third quarter 2015.

The third quarter 2016 net loss and operating loss 1 were negatively affected by $52.9 million ($0.61 per diluted common share) and $52.6 million ($0.60 per diluted common share), respectively, for revisions to assumptions utilized in the determination of deferred policy acquisition costs, deferred sales inducements and the liability for future benefits to be paid under lifetime income benefit riders. Net income and operating income 1 for the third quarter of 2015 were impacted by similar assumption revisions which decreased net income by $1.1 million ($0.01 per diluted common share) and operating income 1 by $8.7 million ($0.10 per diluted common share).

In addition, the third quarter 2016 net loss and operating loss 1 were increased by $1.3 million after tax or $0.02 per diluted common share for items that were discrete to the quarter. The discrete items included $1.1 million for income tax adjustments related to income earned in 2015 and the first half of 2016 and $0.2 million after tax for the write off of capitalized debt issuance costs associated with the Company's November 2013 revolving line of credit facility which was refinanced and terminated at the end of the third quarter.

POLICYHOLDER FUNDS UNDER MANAGEMENT UP 1.9% ON $1.5 BILLION OF SALES

Policyholder funds under management at September 30, 2016 were $44.5 billion, an $820 million or 1.9% increase from the end of the second quarter. Third quarter sales were $1.5 billion before coinsurance ceded and $1.1 billion after coinsurance ceded. Gross and net sales for the quarter were down sequentially and compared to the prior year third quarter with decreases ranging between 16% and 35%.

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