Income Taxes |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | 11. Income Taxes The Company’s income tax provision totaled $1,694 million and $243 million for the three months ended March 31, 2026 and 2025, respectively. The Company’s effective income tax rate was approximately 598.6% and 20.6% for the three months ended March 31, 2026 and 2025, respectively. 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 recorded 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 resulted 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. Under U.S. GAAP, a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation, based on the technical merits of the position. As of March 31, 2026, the Company recorded $3 million of unrecognized tax benefits for uncertain tax positions. Approximately all of the unrecognized tax benefits, if recognized, would impact the effective tax rate. The primary jurisdictions in which the Company operates and incurs income taxes are the U.S., the U.K. and Bermuda. There are no material unremitted earnings with respect to the U.K. or other foreign jurisdictions. In the normal course of business, the Company is subject to examination by federal, state, local and foreign tax authorities. As of March 31, 2026, 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 (“IRS”) 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. The Company received a draft Notice of Proposed Adjustment (“NOPA”) from the IRS on April 13, 2026 proposing a significant increase to taxable income for tax years 2019 through 2021. The proposed adjustment primarily relates to the inclusion of additional income from some of the Company’s minority interest investments in foreign entities. While the 2022 and 2023 tax years are also under examination by the IRS on the same issue, the IRS has not yet proposed any adjustments to the Company’s historical position. The Company disagrees with the IRS’ position and intends to pursue all available administrative and judicial remedies. There can be no assurance as to the outcome of these IRS examinations, any subsequent challenge, or the impact of adverse judicial rulings in other cases. At this time, the Company cannot reasonably estimate the actual potential loss. If the Company is required to pay additional federal and state tax, interest, and, potentially, penalties, then such amounts could be material. 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.
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