Athene Holding Ltd.ATH-PA
Athene Holding Ltd. Income Taxes Disclosure
13. Income Taxes
Income tax expense (benefit) consists of the following:
| (In millions) | Year ended December 31, 2025 | ||||
Federal income tax1 | $ | 468 | |||
Foreign income tax2 | 18 | ||||
| State and local income tax | (9) | ||||
| Deferred | |||||
Federal income tax1 | 150 | ||||
Foreign income tax2 | 245 | ||||
| State and local income tax | 14 | ||||
| Income tax expense (benefit) | $ | 886 | |||
| Years ended December 31, | |||||||||||
| (In millions) | 2024 | 2023 | |||||||||
Current1 | $ | 975 | $ | 720 | |||||||
| Deferred | (245) | (1,881) | |||||||||
| Income tax expense (benefit) | $ | 730 | $ | (1,161) | |||||||
1 For the years ended December 31, 2025, 2024 and 2023, income tax expense (benefit) above includes: Proportional amortization of $513 million, $56 million and $49 million, respectively; tax credits of $(588) million, $(332) million and $(164) million, respectively; and transaction costs relating to low-income housing, transferable energy and other tax credits of $103 million, $238 million and $103 million, respectively. | |||||||||||
2 Foreign income tax expense (benefit) was calculated on $7,318 million of pre-tax income (loss) generated in foreign jurisdictions for the year ended December 31, 2025. Foreign consists of entities located outside the US. | |||||||||||
Income tax expense (benefit) was calculated based on the following income (loss) before income taxes by jurisdiction:
| Years ended December 31, | |||||||||||
| (In millions) | 2024 | 2023 | |||||||||
| Bermuda | $ | 2,146 | $ | 2,652 | |||||||
| US | 3,526 | 2,179 | |||||||||
| United Kingdom | (36) | (240) | |||||||||
| Japan | (2) | — | |||||||||
| Income before income taxes | $ | 5,634 | $ | 4,591 | |||||||
Beginning in 2025 annual reporting, we adopted ASU 2023-09 prospectively. Our expected tax provision computed on pre-tax income is based upon the statutory US tax rate of 21%. A reconciliation of the difference between the expected tax provision at the statutory US tax rate and income tax expense (benefit) is as follows:
| Year ended December 31, 2025 | |||||||||||
| (In millions, except percentages) | Amount | Percent | |||||||||
| US federal statutory tax rate | $ | 1,072 | 21.0 | % | |||||||
State and local income taxes, net of federal income tax effect1 | 8 | 0.2 | % | ||||||||
| State and local income taxes, net of federal income tax effect | (52) | (1.0) | % | ||||||||
| Change in valuation allowance | 60 | 1.2 | % | ||||||||
| Foreign tax effects | (1,291) | (25.2) | % | ||||||||
| Bermuda | |||||||||||
| Statutory tax rate difference between Bermuda and US | (441) | (8.6) | % | ||||||||
| Income passed through to noncontrolling interests | (105) | (2.1) | % | ||||||||
| Anticipatory foreign tax credit | (99) | (1.9) | % | ||||||||
| Bermuda foreign tax credits | (664) | (13.0) | % | ||||||||
| Other foreign jurisdictions | 18 | 0.4 | % | ||||||||
| Effect of cross-border tax laws | 1,086 | 21.2 | % | ||||||||
| Subpart F | 414 | 8.1 | % | ||||||||
| US tax on foreign insurance 953(d) income | 730 | 14.2 | % | ||||||||
| Other | (58) | (1.1) | % | ||||||||
| Changes in valuation allowances | 63 | 1.2 | % | ||||||||
| Nontaxable or nondeductible items | (32) | (0.6) | % | ||||||||
| Insurance company owned life insurance | (32) | (0.6) | % | ||||||||
| Other adjustments | (20) | (0.5) | % | ||||||||
| Investment tax credits accounted for under the proportional amortization method | (40) | (0.8) | % | ||||||||
| Purchase of transferable credits | (27) | (0.5) | % | ||||||||
| Other | 47 | 0.8 | % | ||||||||
| Effective tax rate | $ | 886 | 17.3 | % | |||||||
1 State taxes in Florida and Iowa made up the majority (greater than 50%) of the tax effect in this category. | |||||||||||
| Years ended December 31, | |||||||||||
| (In millions, except percentages) | 2024 | 2023 | |||||||||
| Expected tax provision computed on pre-tax income | $ | 1,183 | $ | 964 | |||||||
| Increase (decrease) in income taxes resulting from: | |||||||||||
| Deferred tax valuation allowance | 23 | (80) | |||||||||
| Non-deductible expenses | 12 | 11 | |||||||||
| Prior year true-up | (22) | (38) | |||||||||
| Stock compensation expense | (11) | (1) | |||||||||
| Noncontrolling interests | (241) | (245) | |||||||||
| Other | 11 | 73 | |||||||||
| Bermuda tax | (195) | (1,764) | |||||||||
| Interest expense attribute | 8 | (68) | |||||||||
| Tax credits | (38) | (13) | |||||||||
| Income tax expense (benefit) | $ | 730 | $ | (1,161) | |||||||
| Effective tax rate | 13 | % | (25) | % | |||||||
Total income taxes were as follows:
| Years ended December 31, | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Income tax expense (benefit) | $ | 886 | $ | 730 | $ | (1,161) | |||||||||||
| Income tax expense (benefit) from OCI | 830 | 22 | 511 | ||||||||||||||
| Total income tax expense (benefit) | $ | 1,716 | $ | 752 | $ | (650) | |||||||||||
Cash paid for taxes, net of refunds received, were as follows:
| (In millions) | Year ended December 31, 2025 | ||||
| Federal | $ | 388 | |||
| State | (8) | ||||
| Foreign | 19 | ||||
| Total cash paid for taxes | $ | 399 | |||
Current income tax recoverable and deferred tax assets are included in other assets on the consolidated balance sheets, and current income tax payable and deferred tax liabilities are included in other liabilities on the consolidated balance sheets. Current and deferred income tax assets and liabilities were as follows:
| December 31, | |||||||||||
| (In millions) | 2025 | 2024 | |||||||||
| Current income tax recoverable | $ | 926 | $ | 364 | |||||||
| Current income tax payable | 1 | 199 | |||||||||
| Net current income tax recoverable | $ | 925 | $ | 165 | |||||||
| Deferred tax assets | $ | 5,129 | $ | 6,259 | |||||||
| Deferred tax liabilities | 589 | 282 | |||||||||
| Net deferred tax assets | $ | 4,540 | $ | 5,977 | |||||||
Deferred income tax assets and liabilities consisted of the following:
| December 31, | |||||||||||
| (In millions) | 2025 | 2024 | |||||||||
| Deferred tax assets | |||||||||||
| Insurance liabilities | $ | 3,117 | $ | 2,383 | |||||||
| Net operating loss and credit carryforwards | 318 | 253 | |||||||||
| Investments, including derivatives and unrealized losses on AFS | 740 | 2,360 | |||||||||
| Employee benefits | 9 | 10 | |||||||||
| Investment in foreign subsidiaries | 480 | 552 | |||||||||
| Bermuda tax | 1,714 | 1,959 | |||||||||
| Other | 19 | — | |||||||||
| Total deferred tax assets | 6,397 | 7,517 | |||||||||
| Valuation allowance | (197) | (48) | |||||||||
| Deferred tax assets, net of valuation allowance | 6,200 | 7,469 | |||||||||
| 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 | |||||||||
| Net deferred tax assets | $ | 4,540 | $ | 5,977 | |||||||
The net operating losses and tax credit carryforwards consist of the following:
| December 31, 2025 | |||||||||||
| (In millions, except years) | Amount | Expiration Year1 | |||||||||
| US federal net operating losses | $ | 684 | 2026 | ||||||||
| US general business credits | 32 | 2045 | |||||||||
| US corporate alternative minimum tax (CAMT) credit carryforward | 4 | No expiration | |||||||||
| US state net operating losses | 229 | 2031 | |||||||||
| UK net operating losses | 286 | No expiration | |||||||||
| Bermuda tax loss carryforward | 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 | |||||||||
| US federal and state net operating losses and other deferred tax assets | $ | 126 | $ | 3 | |||||||
| UK net operating losses and other deferred tax assets | 71 | 45 | |||||||||
| Total valuation allowance | $ | 197 | $ | 48 | |||||||
The primary jurisdictions in which we operate and incur income taxes are the US, UK and Bermuda. We have accumulated undistributed earnings generated by certain foreign subsidiaries, which we intend to indefinitely reinvest. As such, we have not recorded deferred taxes related to the accumulated undistributed earnings. We determined that estimating the unrecognized tax liability is not practicable.
The UK enacted legislation in July 2023 implementing certain provisions of the Organisation for Economic Cooperation and Development’s “Pillar Two” global minimum tax initiative (Pillar Two) that applies to multinational enterprises for accounting periods beginning on or after December 31, 2023. In 2025, the UK introduced additional provisions which took effect for accounting periods beginning on or after December 31, 2024. We are continuing 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. We evaluated the enacted legislation and concluded there was no material impact to the effective tax rate for the years ended December 31, 2025 and 2024.
On December 27, 2023, the Government of Bermuda enacted the Bermuda Corporate Income Tax Act 2023 (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, we made interim elections to align the membership of our Bermuda CIT tax group with the membership of our 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, we 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 US-parented groups from the Income Inclusion Rule (IIR) or Undertaxed Profits Rule (UTPR) taxes under the Pillar Two regime. The UK government has publicly announced its intention to enact this guidance into law. While the precise timing of such enactment is subject to the UK government’s legislative process, once enacted, we expect that Athene and ACRA Bermuda entities would be exempt from the IIR and UTPR taxes in the UK. In light of these developments, and our expectation that maintaining alignment between the Bermuda CIT and Pillar Two tax groups would no longer be beneficial, in January 2026, we revoked ACRA’s election to be subject to the Bermuda CIT.
Although we believe such an outcome would be unlikely, if the UK government does not enact the announced legislation, or subsequently amends its legislation in a manner that does not conform to the OECD guidance, we expect 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, we will record a full valuation allowance against our Bermuda deferred tax assets, as we no longer expect 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 income tax expense equal to the net amount of the Bermuda deferred tax assets of $1.7 billion.
On July 4, 2025, the US government enacted H.R. 1, which includes several tax-related provisions. We have 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. We have 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 our effective tax rate or consolidated financial statements. We 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.
AHL’s Bermuda subsidiaries file protective US income tax returns, and AHL and its US subsidiaries file income tax returns with the US federal government and various US state governments. AHL and its subsidiaries are not subject to US federal, US state, or foreign examinations by tax authorities for years prior to 2021. The Internal Revenue Service recently initiated an audit of the 2022 consolidated tax return filed by AUSA. The UK tax authorities are conducting a compliance check of ALRe for tax years 2021 through 2023. No material adverse proposed adjustments have been issued with respect to the audit or compliance check.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2018 | Feb 27, 2019 | |
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.