Company: APO
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0001858681-25-000034
Chunk: 182

Company: Apollo Global Management, Inc.
Filing Date: 2025-02-24
Form: 10-K
Item: Item 8
Chunk 182
---
 intervals.Other swapsOther swaps include total return swaps, credit default swaps and swaptions. Athene purchases total rate of return swaps to gain exposure and benefit from a reference asset or index without ownership. Credit default swaps provide a measure of protection against the default of an issuer or allow Athene to gain credit exposure to an issuer or traded index. Athene uses credit default swaps coupled with a bond to synthetically create the characteristics of a reference bond. Swaptions provide an option to enter into an interest rate swap and are used by Athene to hedge against interest rate exposure.Embedded derivativesAthene has embedded derivatives which are required to be separated from their host contracts and reported as derivatives. Host contracts include reinsurance agreements structured on a modco or funds withheld basis and indexed annuity products.

183

Table of ContentsAPOLLO GLOBAL MANAGEMENT, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary of the gains (losses) related to derivatives not designated as hedges:Years ended December 31,(In millions)202420232022Equity options$1,921 $1,564 $(2,647)Futures72 73 (144)Interest rate swaps and forwards and other swaps344 (108)56 Foreign currency forwards(775)(495)505 Embedded derivatives on funds withheld2 934 (6,534)Amounts recognized in investment related gains (losses)1,564 1,968 (8,764)Embedded derivatives in indexed annuity products1(174)(1,443)2,768 Total gains (losses) on derivatives not designated as hedges$1,390 $525 $(5,996)1 Included in interest sensitive contract benefits on the consolidated statements of operations.Credit RiskAthene may be exposed to credit-related losses in the event of counterparty nonperformance on derivative financial instruments. Generally, the current credit exposure of Athene’s derivative contracts is the fair value at the reporting date less any collateral received from the counterparty.Athene manages credit risk related to over-the-counter derivatives by entering into transactions with creditworthy counterparties. Where possible, Athene maintains collateral arrangements and uses master netting agreements that provide for a single net payment from one counterparty to another at each due date and upon termination. Athene has also established counterparty exposure limits, where possible, in order to evaluate if there is sufficient collateral to support the net exposure. Collateral arrangements typically require the posting of collateral