Apollo Global Management, Inc.APO
Apollo Global Management, Inc. Income Taxes Disclosure
13. Income Taxes
The Company’s income tax (provision) benefit totaled $(1,276) million, $(1,062) million and $923 million for the years ended December 31, 2025, 2024 and 2023, respectively. The Company’s effective income tax rate was approximately 19.1%, 14.3% and (16.5)% for the years ended December 31, 2025, 2024 and 2023, respectively.
The provision (benefit) for income taxes is presented in the following table:
| Years ended December 31, | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Current | |||||||||||||||||
Federal income tax1 | $ | 474 | $ | 1,083 | $ | 809 | |||||||||||
Foreign income tax2 | 86 | 23 | 104 | ||||||||||||||
| State and local income tax | 73 | 55 | 64 | ||||||||||||||
| $ | 633 | $ | 1,161 | $ | 977 | ||||||||||||
| Deferred | |||||||||||||||||
Federal income tax1 | 349 | (77) | 331 | ||||||||||||||
Foreign income tax2 | 274 | (30) | (2,239) | ||||||||||||||
| State and local income tax | 20 | 8 | 8 | ||||||||||||||
| 643 | (99) | (1,900) | |||||||||||||||
| Total Income Tax Provision (Benefit) | $ | 1,276 | $ | 1,062 | $ | (923) | |||||||||||
1 For the years ended December 31, 2025, 2024 and 2023, income tax provision (benefit) includes proportional amortization of $513 million, $56 million and $49 million, respectively; tax credits of $(743) million, $(367) million and $(186) million, respectively; and transaction costs relating to low-income housing and transferable energy tax credits of $225 million, $248 million and $103 million, respectively. | |||||||||||||||||
2 The foreign income tax provision (benefit) was calculated on $7,656 million, $2,393 million and $2,600 million of pre-tax income (loss) generated in foreign jurisdictions for the years ended December 31, 2025, 2024 and 2023, respectively. | |||||||||||||||||
On July 4, 2025, the U.S. government enacted H.R. 1, which includes several tax-related provisions. The Company has evaluated the enacted legislation and concluded that it does not have a material impact on our consolidated financial statements.
In addition, the U.S. Department of the Treasury and the Internal Revenue Service have issued, and may continue to issue, regulatory guidance under the current administration related to previously enacted tax legislation, including interpretive guidance and notices related to CAMT. The Company has evaluated such guidance as issued to date and, based on its interpretations and assumptions, has reflected the impact of applicable guidance in its income tax provision. The guidance issued to date is not expected to have a material impact on the Company’s effective tax rate or consolidated financial statements. The Company will continue to monitor future guidance and rulemaking and will record any resulting impacts in the period such guidance is issued or becomes effective, as applicable.
The U.K. enacted legislation in July 2023 implementing certain provisions of the Organisation for Economic Cooperation and Development’s “Pillar Two” global minimum tax initiative that applies to multinational enterprises for accounting periods beginning on or after December 31, 2023. On February 22, 2024, the U.K. enacted certain amendments to its Pillar Two legislation which similarly took effect for accounting periods beginning on or after December 31, 2024. The Company continues to evaluate the potential impact on future periods of Pillar Two, pending legislative adoption by individual countries, as such legislative changes could result in changes to our effective tax rate. The Company evaluated the enacted legislation and concluded there was no material impact to our consolidated financial statements for the year ended December 31, 2025.
On December 27, 2023, the Government of Bermuda enacted the Bermuda CIT in response to the OECD’s Pillar Two initiative. Commencing on January 1, 2025, the Bermuda CIT generally imposed a 15% corporate income tax on in-scope entities that are resident in Bermuda or have a Bermuda permanent establishment, without regard to any assurances that were given pursuant to the Exempted Undertakings Tax Protection Act 1966. In connection with the enactment of the Bermuda CIT, the Company made interim elections to align the membership of the Company’s Bermuda CIT tax group with the membership of the Company’s Pillar Two Bermuda tax group, and recorded a deferred tax asset of $2.0 billion as of December 31, 2024 for entry into the Bermuda CIT regime. As of December 31, 2025, the Company had $1.7 billion of net Bermuda deferred tax assets and concluded that it was more likely than not that sufficient future taxable income would be generated to realize these deferred tax assets.
On January 5, 2026, the OECD issued guidance exempting U.S.-parented groups from the IIR or UTPR taxes under the Pillar Two regime. The U.K. government has publicly announced its intention to enact this guidance into law. While the precise timing of such enactment is subject to the U.K. government’s legislative process, once enacted, the Company expects that Athene and ACRA Bermuda entities would be exempt from the IIR and UTPR taxes in the U.K. In light of these developments, and the Company’s expectation that maintaining alignment between the Bermuda CIT and Pillar Two tax groups would no longer be beneficial, in January 2026, the Company revoked ACRA’s election to be subject to the Bermuda CIT.
Although the Company believes such an outcome would be unlikely, if the U.K. government does not enact the announced legislation, or subsequently amends its legislation in a manner that does not conform to the OECD guidance, the Company expects to re-elect ACRA into the Bermuda CIT regime at that time and utilize the Bermuda deferred tax assets to offset any resulting Bermuda CIT or Pillar Two cash tax obligations.
As a result of the foregoing, in the first quarter of 2026, the Company will record a full valuation allowance against its Bermuda deferred tax assets, as the Company no longer expects Athene or ACRA to incur Bermuda CIT or Pillar Two tax expense against which such deferred tax assets could be utilized. This will result in a reduction to other assets and a corresponding increase to the income tax provision equal to the net amount of the Bermuda deferred tax assets of $1.7 billion.
The primary jurisdictions in which the Company operates and incurs income taxes are the U.S., the U.K. and Bermuda. The Company has accumulated undistributed earnings generated by certain foreign subsidiaries, which are intended to be indefinitely reinvested. As such, no deferred taxes have been recorded related to the accumulated undistributed earnings. The Company determined that estimating the unrecognized tax liability is not practicable.
Beginning in 2025 annual reporting, the Company adopted ASU 2023-09 prospectively. A reconciliation of the U.S. federal statutory income tax rate to our effective tax rate for the year ended December 31, 2025 is as follows:
| Year ended December 31, | |||||||||||
| 2025 | |||||||||||
| (In millions, except percentages) | Amount | Percentage | |||||||||
| U.S. federal statutory tax rate | $ | 1,401 | 21.0 | % | |||||||
State and local income taxes, net of federal income tax effect1 | 78 | 1.2 | |||||||||
| State and local income taxes, net of federal income tax effect | 10 | 0.2 | |||||||||
| Change in valuation allowance | 68 | 1.0 | |||||||||
| Foreign tax effects | (1,272) | (19.1) | |||||||||
| Bermuda | |||||||||||
| Statutory tax rate difference between Bermuda and U.S. | (441) | (6.6) | |||||||||
| Income passed through to non-controlling interests | (105) | (1.6) | |||||||||
| Anticipatory foreign tax credit | (99) | (1.5) | |||||||||
| Bermuda foreign tax credit | (664) | (10.0) | |||||||||
| Other foreign jurisdictions | 37 | 0.6 | |||||||||
| Effect of cross-border tax laws | 1,062 | 15.9 | |||||||||
| Subpart F income | 415 | 6.2 | |||||||||
| U.S. tax on foreign insurance 953(d) income | 730 | 11.0 | |||||||||
| Other | (83) | (1.3) | |||||||||
| Tax credits | (25) | (0.4) | |||||||||
| Changes in valuation allowances | 77 | 1.2 | |||||||||
| Nontaxable or nondeductible items | (58) | (0.9) | |||||||||
| Impact of equity-based compensation | (70) | (1.1) | |||||||||
| Nondeductible executive compensation | 58 | 0.9 | |||||||||
| Insurance company owned life insurance | (32) | (0.5) | |||||||||
| Other nontaxable or nondeductible items | (14) | (0.2) | |||||||||
| Changes in unrecognized tax benefits | 8 | 0.1 | |||||||||
| Other adjustments | 5 | 0.1 | |||||||||
| Investment tax credits accounted for under the proportional amortization method | (40) | (0.6) | |||||||||
| Purchase of transferable credits | (35) | (0.5) | |||||||||
| Other | 80 | 1.2 | |||||||||
| Effective tax rate | $ | 1,276 | 19.1 | % | |||||||
1 State and local income taxes in California, Illinois, Iowa, New York State and New York City made up the majority (greater than 50 percent) of the tax effect in this category. | |||||||||||
A reconciliation of the U.S. federal statutory income tax rates to our effective tax rate for the years ended December 31, 2024 and 2023 is as follows:
| Years ended December 31, | |||||||||||
| (In percentages) | 2024 | 2023 | |||||||||
| U.S. federal statutory tax rate | 21.0 | % | 21.0 | % | |||||||
| Income passed through to non-controlling interests | (3.5) | (4.6) | |||||||||
| State and local income taxes (net of federal benefit) | 0.5 | 1.2 | |||||||||
| Impact of foreign taxes (net of foreign tax credit) | (2.6) | (31.0) | |||||||||
| Impact of equity-based compensation | (1.0) | 1.0 | |||||||||
| Impact of valuation allowance | 0.6 | (1.3) | |||||||||
| Tax Credits | (0.5) | (0.6) | |||||||||
| Redomicile | 0.1 | (1.2) | |||||||||
| Other | (0.3) | (1.0) | |||||||||
| Effective income tax rate | 14.3 | % | (16.5) | % | |||||||
The income tax provision (benefit) is presented in the following table:
| Years ended December 31, | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Income tax provision (benefit) | $ | 1,276 | $ | 1,062 | $ | (923) | |||||||||||
| Income tax provision (benefit) from other comprehensive income (loss) | 835 | 21 | 513 | ||||||||||||||
| Total income tax provision (benefit) | $ | 2,111 | $ | 1,083 | $ | (410) | |||||||||||
The Company’s cash paid for taxes for the year ended December 31, 2025 included in the consolidated statements of cash flows consists of the following:
| Year ended December 31, | |||||
| (In millions) | 2025 | ||||
| Federal | $ | 458 | |||
| State and local | 76 | ||||
| Foreign | 56 | ||||
| Cash paid for taxes | $ | 590 | |||
| State and local | |||||
| New York State and City | $ | 59 | |||
| Other State | 17 | ||||
| Total State & local | $ | 76 | |||
| Foreign | |||||
| U.K. | $ | 36 | |||
| Other foreign | 20 | ||||
| Total Foreign | $ | 56 | |||
Deferred income taxes are recorded due to temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated statements of financial condition. These temporary differences result in taxable or deductible amounts in future years.
The Company’s deferred tax assets and liabilities in the consolidated statements of financial condition consist of the following:
| December 31, | |||||||||||
| (In millions) | 2025 | 2024 | |||||||||
| Asset Management | |||||||||||
| Deferred Tax Assets | |||||||||||
| Depreciation and amortization | $ | 254 | $ | 303 | |||||||
| Tax credit carryforwards | 14 | 167 | |||||||||
| Deferred revenue | 7 | 9 | |||||||||
| Equity-based compensation | 274 | 166 | |||||||||
| Net operating loss carryforwards | 40 | 23 | |||||||||
| Other | 40 | 47 | |||||||||
| Total Deferred Tax Assets | 629 | 715 | |||||||||
| Valuation Allowance | (54) | (27) | |||||||||
| Deferred Tax Assets, Net of Valuation Allowance | 575 | 688 | |||||||||
| Deferred Tax Liabilities | |||||||||||
| Basis difference in investments | 317 | 252 | |||||||||
| Other | 5 | — | |||||||||
| Total Deferred Tax Liabilities | 322 | 252 | |||||||||
| Total Deferred Tax Assets, Net – Asset Management | $ | 253 | $ | 436 | |||||||
| Retirement Services | |||||||||||
| Deferred Tax Assets | |||||||||||
| Insurance liabilities | $ | 3,117 | $ | 2,383 | |||||||
| Net operating loss and tax credit carryforwards | 382 | 206 | |||||||||
| Investments, including derivatives | 749 | 2,331 | |||||||||
| Employee benefits | 9 | 10 | |||||||||
| Bermuda tax | 1,714 | 1,959 | |||||||||
| Investment in foreign subsidiaries | 480 | 552 | |||||||||
| Other | 19 | — | |||||||||
| Total Deferred Tax Assets | 6,470 | 7,441 | |||||||||
| Valuation Allowance | (197) | (48) | |||||||||
| Deferred Tax Assets, Net of Valuation Allowance | 6,273 | 7,393 | |||||||||
| Deferred Tax Liabilities | |||||||||||
| Intangible assets | 338 | 362 | |||||||||
| DAC, DSI and VOBA | 1,322 | 1,120 | |||||||||
| Other | — | 10 | |||||||||
| Total Deferred Tax Liabilities | 1,660 | 1,492 | |||||||||
| Total Deferred Tax Assets, Net – Retirement Services | $ | 4,613 | $ | 5,901 | |||||||
The net operating loss and tax credit carryforwards consist of the following:
December 31, 2025 | ||||||||||||||
| Amount (in millions) | Expiration Year1 | |||||||||||||
| U.S. Federal net operating losses | $ | 711 | 2026 | |||||||||||
| U.S. foreign tax credit | 49 | 2033 | ||||||||||||
| U.S. general business credits | 66 | 2045 | ||||||||||||
| U.S. corporate alternative minimum tax credits | 4 | No expiration | ||||||||||||
| U.S. State net operating losses | 284 | 2031 | ||||||||||||
| U.K. net operating losses | 286 | No expiration | ||||||||||||
| Bermuda net operating losses | 5,936 | No expiration | ||||||||||||
1 Represents the year that operating losses and credits begin to expire. | ||||||||||||||
The valuation allowance consists of the following:
| December 31, | |||||||||||
| (In millions) | 2025 | 2024 | |||||||||
| U.S. federal and state net operating losses and other deferred tax assets | $ | 180 | $ | 30 | |||||||
| U.K. net operating losses and other deferred tax assets | 71 | 45 | |||||||||
| Total Valuation Allowance | $ | 251 | $ | 75 | |||||||
Tax Contingencies
In the normal course of business, the Company is subject to examination by federal, state, local and foreign tax authorities. As of December 31, 2025, the Company’s U.S. federal, state, local and foreign income tax returns for the years 2022 through 2024 are open under the general statute of limitations provisions and therefore subject to examination. Currently, the Internal Revenue Service is examining the tax returns of the Company and certain subsidiaries for tax years 2019 to 2023. The State and City of New York are examining certain subsidiaries’ tax returns for tax years 2014 to 2023. The U.K. tax authorities are currently examining certain subsidiaries’ tax returns for tax years 2015 to 2022.
There are other routine examinations ongoing in other state, local, and foreign jurisdictions in which the Company operates. The Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. The Company continues to monitor the progress of ongoing discussions with tax authorities. No provisions with respect to these examinations have been recorded, other than the unrecognized tax benefits discussed below.
The following table presents a roll-forward of the beginning and ending aggregate unrecognized tax benefits for the periods presented:
| Years ended December 31, | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Balance at beginning of period | $ | 10 | $ | 19 | $ | 15 | |||||||||||
| Increases based on tax positions taken in the prior years | 5 | 8 | 4 | ||||||||||||||
| Decreases due to settlements with tax authorities | (7) | (17) | — | ||||||||||||||
| Balance at end of period | $ | 8 | $ | 10 | $ | 19 | |||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Mar 1, 2023 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.