Adoption of Accounting Pronouncement

3 Months Ended

Mar. 31, 2023

Accounting Changes and Error Corrections [Abstract]

Adoption of Accounting Pronouncement

2. Adoption of Accounting Pronouncement

The following table summarizes future policy benefits and changes to the liability:

(In millions)	Traditional deferred annuities		Indexed annuities		Payout annuities		Reconciling items1		Total
Balance as of January 1, 2022	$	221	$	5,389	$	32,872	$	8,632	$	47,114
Change in discount rate assumptions	—		—		2,406		—		2,406
Adjustment for removal of balances related to market risk benefits	(221)		(5,389)		—		—		(5,610)
Adjustment for offsetting balance in negative VOBA2	—		—		—		(2,428)		(2,428)
Adjusted balance as of January 1, 2022	$	—	$	—	$	35,278	$	6,204	$	41,482
1 Reconciling items primarily include negative VOBA associated with our liability for future policy benefits, as well as reserves for our immaterial lines of business including term and whole life, accident and health and disability, as well as other insurance benefit reserves for our no-lapse guarantees with universal life contracts, all of which are fully ceded.
2 Uneliminated adjustments were recorded to positive VOBA within deferred acquisition costs, deferred sales inducements and value of business acquired on the condensed consolidated balance sheets.

Adjustments to the deferred profit liability were not required as these balances were set to zero on the merger date. Since the liability for future policy benefits was measured at fair value on the merger date, there were no instances upon transition in which net premiums exceeded gross premiums which would have required an immediate loss to be recognized in net income.

The following table presents the net liability position of market risk benefits:

(In millions)	Traditional deferred annuities		Indexed annuities		Total
Balance as of January 1, 2022	$	—	$	—	$	—
Adjustment for addition of existing balances1	221		5,389		5,610
Adjustment to positive VOBA due to fair value adjustment for market risk benefits2	32		(1,165)		(1,133)
Adjustment to negative VOBA due to fair value adjustment for market risk benefits3	—		(30)		(30)
Adjusted balance as of January 1, 2022	$	253	$	4,194	$	4,447
1 Previously recorded within future policy benefits on the condensed consolidated balance sheets.
2 Previously recorded within deferred acquisition costs, deferred sales inducements and value of business acquired on the condensed consolidated balance sheets.
3 Previously recorded within interest sensitive contract liabilities on the condensed consolidated balance sheets.

The following table represents market risk benefits by asset and liability positions:

(In millions)	Asset1		Liability		Net liability
Traditional deferred annuities	$	—	$	253	$	253
Indexed annuities	366		4,560		4,194
Adjusted balance as of January 1, 2022	$	366	$	4,813	$	4,447
1 Included in other assets on the condensed consolidated balance sheets.

The following table summarizes the change in deferred acquisition costs, deferred sales inducements and value of business acquired:

(In millions)	VOBA
Balance as of January 1, 2022	$	4,527
Change in discount rate assumptions for future policy benefits	(22)
Fair value adjustment of market risk benefits	(1,133)
Adjusted balance as of January 1, 2022	$	3,372

The following represents the effects of LDTI adoption on the applicable financial statement lines of our condensed consolidated balance sheet:

	December 31, 2022
(In millions)	Reported		Adoption		Adjusted
Assets
Reinsurance recoverable	$	4,367	$	(9)	$	4,358
Deferred acquisition costs, deferred sales inducements and value of business acquired	5,576		(1,110)		4,466
Other assets	9,690		(997)		8,693
Total assets	$	246,047	$	(2,116)	$	243,931
Liabilities and Equity
Liabilities
Interest sensitive contract liabilities	$	173,653	$	(37)	$	173,616
Future policy benefits	55,328		(13,218)		42,110
Market risk benefits	—		2,970		2,970
Total liabilities	243,667		(10,285)		233,382
Equity
Retained deficit	(4,892)		1,252		(3,640)
Accumulated other comprehensive income (loss)	(12,311)		4,990		(7,321)
Total Athene Holding Ltd. shareholders’ equity	916		6,242		7,158
Noncontrolling interests	1,464		1,927		3,391
Total equity	2,380		8,169		10,549
Total liabilities and equity	$	246,047	$	(2,116)	$	243,931

The following represents the effects of LDTI adoption on the applicable financial statement lines of our condensed consolidated statements of income (loss):

	Three months ended March 31, 2022
(In millions)	Reported		Adoption		Adjusted
Revenues
Investment related gains (losses)	$	(4,200)	$	(12)	$	(4,212)
Total revenues	(269)		(12)		(281)
Benefits and expenses
Interest sensitive contract benefits	(41)		(58)		(99)
Future policy and other policy benefits	2,085		99		2,184
Market risk benefits remeasurement (gains) losses	—		(622)		(622)
Amortization of deferred acquisition costs, deferred sales inducements and value of business acquired	125		(27)		98
Policy and other operating expenses	335		3		338
Total benefits and expenses	2,504		(605)		1,899
Income (loss) before income taxes	(2,773)		593		(2,180)
Income tax expense (benefit)	(407)		123		(284)
Net income (loss)	(2,366)		470		(1,896)
Less: Net income (loss) attributable to noncontrolling interests	(883)		2		(881)
Net income (loss) attributable to Athene Holding Ltd. shareholders	(1,483)		468		(1,015)
Less: Preferred stock dividends	35		—		35
Net income (loss) available to Athene Holding Ltd. common shareholder	$	(1,518)	$	468	$	(1,050)

	Six months ended June 30, 2022
(In millions)	Reported		Adoption		Adjusted
Revenues
Total revenues	$	1,526	$	—	$	1,526
Benefits and expenses
Interest sensitive contract benefits	(662)		(90)		(752)
Future policy and other policy benefits	7,694		266		7,960
Market risk benefits remeasurement (gains) losses	—		(1,231)		(1,231)
Amortization of deferred acquisition costs, deferred sales inducements and value of business acquired	250		(44)		206
Policy and other operating expenses	693		2		695
Total benefits and expenses	7,975		(1,097)		6,878
Income (loss) before income taxes	(6,449)		1,097		(5,352)
Income tax expense (benefit)	(891)		229		(662)
Net income (loss)	(5,558)		868		(4,690)
Less: Net loss attributable to noncontrolling interests	(1,955)		(15)		(1,970)
Net income (loss) attributable to Athene Holding Ltd. shareholders	(3,603)		883		(2,720)
Less: Preferred stock dividends	70		—		70
Net income (loss) available to Athene Holding Ltd. common shareholder	$	(3,673)	$	883	$	(2,790)

	Nine months ended September 30, 2022
(In millions)	Reported		Adoption		Adjusted
Revenues
Investment related gains (losses)	$	(12,812)	$	1	$	(12,811)
Total revenues	3,835		1		3,836
Benefits and expenses
Interest sensitive contract benefits	(573)		(8)		(581)
Future policy and other policy benefits	10,988		242		11,230
Market risk benefits remeasurement (gains) losses	—		(1,689)		(1,689)
Amortization of deferred acquisition costs, deferred sales inducements and value of business acquired	375		(57)		318
Policy and other operating expenses	1,081		2		1,083
Total benefits and expenses	11,871		(1,510)		10,361
Income (loss) before income taxes	(8,036)		1,511		(6,525)
Income tax expense (benefit)	(1,101)		318		(783)
Net income (loss)	(6,935)		1,193		(5,742)
Less: Net income (loss) attributable to noncontrolling interests	(2,431)		(4)		(2,435)
Net income (loss) attributable to Athene Holding Ltd. shareholders	(4,504)		1,197		(3,307)
Less: Preferred stock dividends	105		—		105
Net income (loss) available to Athene Holding Ltd. common shareholder	$	(4,609)	$	1,197	$	(3,412)

	Year ended December 31, 2022
(In millions)	Reported		Adoption		Adjusted
Revenues
Total revenues	$	7,623	$	—	$	7,623
Benefits and expenses
Interest sensitive contract benefits	541		(3)		538
Future policy and other policy benefits	12,310		155		12,465
Market risk benefits remeasurement (gains) losses	—		(1,657)		(1,657)
Amortization of deferred acquisition costs, deferred sales inducements and value of business acquired	509		(65)		444
Policy and other operating expenses	1,493		2		1,495
Total benefits and expenses	14,853		(1,568)		13,285
Income (Loss) before income taxes	(7,230)		1,568		(5,662)
Income tax expense (benefit)	(976)		330		(646)
Net income (loss)	(6,254)		1,238		(5,016)
Less: Net loss attributable to noncontrolling interests	(2,092)		(14)		(2,106)
Net income (loss) attributable to Athene Holding Ltd. shareholders	(4,162)		1,252		(2,910)
Less: Preferred stock dividends	141		—		141
Net income (loss) available to Athene Holding Ltd. common shareholder	$	(4,303)	$	1,252	$	(3,051)

The following represents the effects of LDTI adoption on the applicable financial statement lines of our condensed consolidated statements of comprehensive income (loss):

	Three months ended March 31, 2022
(In millions)	Reported		Adoption		Adjusted
Net income (loss)	$	(2,366)	$	470	$	(1,896)
Other comprehensive income (loss), before tax
Unrealized investment gains (losses) on available-for-sale securities	(6,430)		(267)		(6,697)
Remeasurement gains (losses) on future policy benefits related to discount rate	—		3,562		3,562
Remeasurement gains (losses) on market risk benefits related to credit risk	—		397		397
Foreign currency translation and other adjustments	4		(6)		(2)
Other comprehensive income (loss), before tax	(6,555)		3,686		(2,869)
Income tax expense (benefit) related to other comprehensive income (loss)	(1,170)		555		(615)
Other comprehensive income (loss)	(5,385)		3,131		(2,254)
Comprehensive income (loss)	(7,751)		3,601		(4,150)
Less: Comprehensive income (loss) attributable to noncontrolling interests	(1,594)		777		(817)
Comprehensive income (loss) attributable to Athene Holding Ltd. shareholders	$	(6,157)	$	2,824	$	(3,333)

	Six months ended June 30, 2022
(In millions)	Reported		Adoption		Adjusted
Net income (loss)	$	(5,558)	$	868	$	(4,690)
Other comprehensive income (loss), before tax
Unrealized investment gains (losses) on available-for-sale securities	(13,703)		(547)		(14,250)
Remeasurement gains (losses) on future policy benefits related to discount rate	—		6,459		6,459
Remeasurement gains (losses) on market risk benefits related to credit risk	—		576		576
Foreign currency translation and other adjustments	(54)		(27)		(81)
Other comprehensive income (loss), before tax	(13,805)		6,461		(7,344)
Income tax expense (benefit) related to other comprehensive income (loss)	(2,453)		960		(1,493)
Other comprehensive income (loss)	(11,352)		5,501		(5,851)
Comprehensive income (loss)	(16,910)		6,369		(10,541)
Less: Comprehensive income (loss) attributable to noncontrolling interests	(3,520)		1,397		(2,123)
Comprehensive income (loss) attributable to Athene Holding Ltd. shareholders	$	(13,390)	$	4,972	$	(8,418)

	Nine months ended September 30, 2022
(In millions)	Reported		Adoption		Adjusted
Net income (loss)	$	(6,935)	$	1,193	$	(5,742)
Other comprehensive income (loss), before tax
Unrealized investment gains (losses) on available-for-sale securities	(19,414)		(764)		(20,178)
Remeasurement gains (losses) on future policy benefits related to discount rate	—		8,833		8,833
Remeasurement gains (losses) on market risk benefits related to credit risk	—		524		524
Foreign currency translation and other adjustments	(13)		(59)		(72)
Other comprehensive income (loss), before tax	(19,555)		8,534		(11,021)
Income tax expense (benefit) related to other comprehensive income (loss)	(3,444)		1,224		(2,220)
Other comprehensive income (loss)	(16,111)		7,310		(8,801)
Comprehensive income (loss)	(23,046)		8,503		(14,543)
Less: Comprehensive income (loss) attributable to noncontrolling interests	(4,787)		2,024		(2,763)
Comprehensive income (loss) attributable to Athene Holding Ltd. shareholders	$	(18,259)	$	6,479	$	(11,780)

	Year ended December 31, 2022
(In millions)	Reported		Adoption		Adjusted
Net income (loss)	$	(6,254)	$	1,238	$	(5,016)
Other comprehensive income (loss), before tax
Unrealized investment gains (losses) on available-for-sale securities	(17,457)		(699)		(18,156)
Remeasurement gains (losses) on future policy benefits related to discount rate	—		8,425		8,425
Remeasurement gains (losses) on market risk benefits related to credit risk	—		366		366
Foreign currency translation and other adjustments	(16)		(11)		(27)
Other comprehensive income (loss), before tax	(17,471)		8,081		(9,390)
Income tax expense (benefit) related to other comprehensive income (loss)	(3,083)		1,150		(1,933)
Other comprehensive income (loss)	(14,388)		6,931		(7,457)
Comprehensive income (loss)	(20,642)		8,169		(12,473)
Less: Comprehensive income (loss) attributable to noncontrolling interests	(4,169)		1,927		(2,242)
Comprehensive income (loss) attributable to Athene Holding Ltd. shareholders	$	(16,473)	$	6,242	$	(10,231)

We made corresponding adjustments to the condensed consolidated statements of equity for the relevant periods to reflect the changes to net loss and comprehensive loss, as presented above.

The following represents the effects of LDTI adoption on the applicable financial statement lines of our condensed consolidated statements of cash flows:

	Three months ended March 31, 2022
(In millions)	Reported		Adoption		Adjusted
Net income (loss)	$	(2,366)	$	470	$	(1,896)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of deferred acquisition costs, deferred sales inducements and value of business acquired	125		(27)		98
Net recognized (gains) losses on investments and derivatives	1,813		12		1,825
Changes in operating assets and liabilities:
Interest sensitive contract liabilities	(480)		(68)		(548)
Future policy benefits, market risk benefits and reinsurance recoverable	(266)		(510)		(776)
Other assets and liabilities	(734)		123		(611)
Net cash provided by operating activities	155		—		155
Net cash used in investing activities	(6,165)		—		(6,165)
Net cash provided by financing activities	5,463		—		5,463
Effect of exchange rate changes on cash and cash equivalents	(4)		—		(4)
Net decrease in cash and cash equivalents	(551)		—		(551)
Cash and cash equivalents at beginning of year1	10,429		—		10,429
Cash and cash equivalents at end of period1	$	9,878	$	—	$	9,878
1 Includes cash and cash equivalents, restricted cash and cash and cash equivalents of consolidated variable interest entities.

	Six months ended June 30, 2022
(In millions)	Reported		Adoption		Adjusted
Net income (loss)	$	(5,558)	$	868	$	(4,690)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of deferred acquisition costs, deferred sales inducements and value of business acquired	250		(44)		206
Changes in operating assets and liabilities:
Interest sensitive contract liabilities	(1,604)		(120)		(1,724)
Future policy benefits, market risk benefits and reinsurance recoverable	3,933		(933)		3,000
Other assets and liabilities	(1,139)		229		(910)
Net cash provided by operating activities	4,726		—		4,726
Net cash used in investing activities	(11,719)		—		(11,719)
Net cash provided by financing activities	8,707		—		8,707
Effect of exchange rate changes on cash and cash equivalents	(20)		—		(20)
Net increase in cash and cash equivalents	1,694		—		1,694
Cash and cash equivalents at beginning of year1	10,429		—		10,429
Cash and cash equivalents at end of period1	$	12,123	$	—	$	12,123
1 Includes cash and cash equivalents, restricted cash and cash and cash equivalents of consolidated variable interest entities.

	Nine months ended September 30, 2022
(In millions)	Reported		Adoption		Adjusted
Net income (loss)	$	(6,935)	$	1,193	$	(5,742)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of deferred acquisition costs, deferred sales inducements and value of business acquired	375		(57)		318
Net recognized (gains) losses on investments and derivatives	5,958		(1)		5,957
Changes in operating assets and liabilities:
Interest sensitive contract liabilities	(2,002)		(50)		(2,052)
Future policy benefits, market risk benefits and reinsurance recoverable	5,240		(1,403)		3,837
Other assets and liabilities	(1,586)		318		(1,268)
Net cash provided by operating activities	6,077		—		6,077
Net cash used in investing activities	(22,338)		—		(22,338)
Net cash provided by financing activities	17,115		—		17,115
Effect of exchange rate changes on cash and cash equivalents	(18)		—		(18)
Net increase in cash and cash equivalents	836		—		836
Cash and cash equivalents at beginning of year1	10,429		—		10,429
Cash and cash equivalents at end of period1	$	11,265	$	—	$	11,265
1 Includes cash and cash equivalents, restricted cash and cash and cash equivalents of consolidated variable interest entities.

	Year ended December 31, 2022
(In millions)	Reported		Adoption		Adjusted
Net income (loss)	$	(6,254)	$	1,238	$	(5,016)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of deferred acquisition costs, deferred sales inducements and value of business acquired	509		(65)		444
Changes in operating assets and liabilities:
Interest sensitive contract liabilities	(1,269)		(68)		(1,337)
Future policy benefits, market risk benefits and reinsurance recoverable	5,339		(1,438)		3,901
Other assets and liabilities	(1,527)		333		(1,194)
Net cash provided by operating activities	6,258		—		6,258
Net cash used in investing activities	(34,375)		—		(34,375)
Net cash provided by financing activities	26,472		—		26,472
Effect of exchange rate changes on cash and cash equivalents	(15)		—		(15)
Net decrease in cash and cash equivalents	(1,660)		—		(1,660)
Cash and cash equivalents at beginning of year1	10,429		—		10,429
Cash and cash equivalents at end of year1	$	8,769	$	—	$	8,769
1 Includes cash and cash equivalents, restricted cash and cash and cash equivalents of consolidated variable interest entities.