Aflac Incorporated Announces Third Quarter Results, Reports Third Quarter Net Losses of $93 Million, Declares Fourth Quarter Cash Dividend
Aflac Incorporated reported third quarter 2024 results with total revenues of $2.9 billion, a decline from $5.0 billion in Q3 2023. The company posted net losses of $93 million ($0.17 per diluted share) compared to earnings of $1.6 billion ($2.64 per diluted share) a year ago, primarily due to foreign exchange-related losses from yen strengthening by 12.9%.
Net investment losses were $1.4 billion, driven by losses on derivatives and foreign currency activities. However, adjusted earnings increased by 10.6% to $1.2 billion, with adjusted EPS rising 17.4% to $2.16.
Shareholders' equity grew to $24.8 billion ($44.60 per share) from $22.7 billion ($38.63 per share) a year ago. Aflac declared a fourth quarter dividend of $0.50 per share and repurchased $500 million in common shares.
In Japan, net earned premiums in yen fell 10.5%, while in the U.S., net earned premiums increased 2.8%. The company emphasized continued focus on profitable growth in both markets.
Aflac Incorporated ha riportato i risultati del terzo trimestre 2024 con ricavi totali di 2,9 miliardi di dollari, in calo rispetto ai 5,0 miliardi di dollari nel Q3 2023. L'azienda ha registrato perdite nette di 93 milioni di dollari (0,17 dollari per azione diluita) rispetto agli utili di 1,6 miliardi di dollari (2,64 dollari per azione diluita) dell'anno precedente, principalmente a causa delle perdite legate ai cambi dovute al rafforzamento dello yen del 12,9%.
Le perdite nette da investimenti sono state di 1,4 miliardi di dollari, determinate da perdite su derivati e attività in valuta estera. Tuttavia, gli utili rettificati sono aumentati del 10,6% a 1,2 miliardi di dollari, con un incremento del 17,4% dell'EPS rettificato a 2,16 dollari.
Il patrimonio netto degli azionisti è cresciuto a 24,8 miliardi di dollari (44,60 dollari per azione) rispetto ai 22,7 miliardi di dollari (38,63 dollari per azione) dell'anno precedente. Aflac ha dichiarato un dividendo del quarto trimestre di 0,50 dollari per azione e ha riacquistato 500 milioni di dollari in azioni ordinarie.
In Giappone, i premi netti guadagnati in yen sono diminuiti del 10,5%, mentre negli Stati Uniti, i premi netti guadagnati sono aumentati del 2,8%. L'azienda ha sottolineato il continuo impegno per una crescita redditizia in entrambi i mercati.
Aflac Incorporated informó resultados del tercer trimestre de 2024 con ingresos totales de 2.9 mil millones de dólares, una disminución de 5.0 mil millones de dólares en el Q3 de 2023. La compañía registró pérdidas netas de 93 millones de dólares (0.17 dólares por acción diluida) en comparación con ganancias de 1.6 mil millones de dólares (2.64 dólares por acción diluida) el año pasado, principalmente debido a pérdidas relacionadas con el intercambio de divisas por el fortalecimiento del yen en un 12.9%.
Las pérdidas netas por inversiones ascendieron a 1.4 mil millones de dólares, impulsadas por pérdidas en derivados y actividades en moneda extranjera. Sin embargo, los beneficios ajustados aumentaron un 10.6% a 1.2 mil millones de dólares, con un aumento del EPS ajustado del 17.4% a 2.16 dólares.
El patrimonio neto de los accionistas creció a 24.8 mil millones de dólares (44.60 dólares por acción) desde 22.7 mil millones de dólares (38.63 dólares por acción) hace un año. Aflac declaró un dividendo del cuarto trimestre de 0.50 dólares por acción y recompró 500 millones de dólares en acciones comunes.
En Japón, las primas netas obtenidas en yenes cayeron un 10.5%, mientras que en EE. UU., las primas netas obtenidas aumentaron un 2.8%. La empresa enfatizó su continuo enfoque en el crecimiento rentable en ambos mercados.
Aflac Incorporated는 2024년 3분기 실적을 발표하며 총 수익이 29억 달러로 2023년 3분기의 50억 달러에서 감소했다고 보고했습니다. 회사는 1년 전 16억 달러(주당 2.64달러)의 수익과 비교해 9300만 달러(주당 0.17달러)의 순손실을 기록했습니다. 이는 주로 엔화가 12.9% 강세를 보이면서 발생한 외환 관련 손실 때문입니다.
순 투자 손실은 파생상품 및 외화 활동에서의 손실에 의해 14억 달러에 이르렀습니다. 그럼에도 불구하고 조정 후 수익은 10.6% 증가하여 12억 달러에 달했으며, 조정 후 주당 순이익(EPS)은 17.4% 상승하여 2.16달러에 이르렀습니다.
주주 지분은 1년 전 22.7억 달러(주당 38.63달러)에서 248억 달러(주당 44.60달러)로 성장했습니다. Aflac은 주당 0.50달러의 4분기 배당금을 선언하고 5억 달러의 보통주를 재매입했습니다.
일본에서는 엔화로 발생한 순서 보험료가 10.5% 감소했지만, 미국에서는 순서 보험료가 2.8% 증가했습니다. 회사는 두 시장에서의 수익성 있는 성장에 지속적으로 집중할 것임을 강조했습니다.
Aflac Incorporated a annoncé des résultats pour le troisième trimestre 2024 avec des recettes totales de 2,9 milliards de dollars, en baisse par rapport à 5,0 milliards de dollars au T3 2023. L'entreprise a enregistré des pertes nettes de 93 millions de dollars (0,17 dollar par action diluée) par rapport à des bénéfices de 1,6 milliard de dollars (2,64 dollars par action diluée) l'année dernière, principalement en raison de pertes liées aux fluctuations de change en raison du renforcement du yen de 12,9 %.
Les pertes nettes d'investissement se sont élevées à 1,4 milliard de dollars, attribuées à des pertes sur des dérivés et des activités en devises étrangères. Cependant, les bénéfices ajustés ont augmenté de 10,6 % pour atteindre 1,2 milliard de dollars, tandis que le BPA ajusté a augmenté de 17,4 % pour atteindre 2,16 dollars.
Les capitaux propres des actionnaires ont augmenté à 24,8 milliards de dollars (44,60 dollars par action) contre 22,7 milliards de dollars (38,63 dollars par action) l'année précédente. Aflac a déclaré un dividende pour le quatrième trimestre de 0,50 dollar par action et a racheté pour 500 millions de dollars d'actions ordinaires.
Au Japon, les primes nettes perçues en yens ont diminué de 10,5 %, tandis qu'aux États-Unis, les primes nettes perçues ont augmenté de 2,8 %. L'entreprise a souligné son engagement continu envers une croissance rentable dans les deux marchés.
Aflac Incorporated hat die Ergebnisse des dritten Quartals 2024 veröffentlicht, mit Gesamterlösen von 2,9 Milliarden Dollar, was einem Rückgang von 5,0 Milliarden Dollar im Q3 2023 entspricht. Das Unternehmen verzeichnete Nettoverluste von 93 Millionen Dollar (0,17 Dollar pro verwässerter Aktie) im Vergleich zu Gewinnen von 1,6 Milliarden Dollar (2,64 Dollar pro verwässerter Aktie) im letzten Jahr, hauptsächlich aufgrund von Währungsverlusten durch die 12,9%ige Stärkung des Yen.
Die Netto-Investitionsverluste betrugen 1,4 Milliarden Dollar, bedingt durch Verluste aus Derivaten und Geschäften mit Fremdwährungen. Dennoch stiegen die bereinigten Erträge um 10,6% auf 1,2 Milliarden Dollar, während der bereinigte EPS um 17,4% auf 2,16 Dollar anstieg.
Eigenkapital der Aktionäre wuchs auf 24,8 Milliarden Dollar (44,60 Dollar pro Aktie), von 22,7 Milliarden Dollar (38,63 Dollar pro Aktie) vor einem Jahr. Aflac erklärte eine Dividende für das vierte Quartal von 0,50 Dollar pro Aktie und hat 500 Millionen Dollar an Stammaktien zurückgekauft.
In Japan sanken die netto verdienten Prämien in Yen um 10,5%, während die netto verdienten Prämien in den USA um 2,8% stiegen. Das Unternehmen betonte die anhaltende Fokussierung auf profitables Wachstum in beiden Märkten.
- Adjusted earnings increased by 10.6% to $1.2 billion.
- Adjusted EPS rose 17.4% to $2.16.
- Shareholders' equity grew to $24.8 billion ($44.60 per share) from $22.7 billion ($38.63 per share) a year ago.
- Declared fourth quarter dividend of $0.50 per share.
- Repurchased $500 million in common shares.
- Total revenues declined to $2.9 billion from $5.0 billion in Q3 2023.
- Net losses of $93 million compared to earnings of $1.6 billion a year ago.
- Net investment losses of $1.4 billion.
- Variable investment income was $27 million below long-term return expectations.
- Net earned premiums in yen fell 10.5%.
Insights
Aflac's Q3 results reveal significant challenges with a
Key positives include U.S. segment sales growth of
The yen's
The
Total revenues were
Net losses in the third quarter of 2024 included net investment losses of
Adjusted earnings* in the third quarter were
The average yen/dollar exchange rate in the third quarter of 2024 was 147.95, or
Shareholders' equity was
For the first nine months of 2024, total revenues were down
Shareholders' equity excluding AOCI (or adjusted book value*) was
AFLAC
In yen terms, Aflac Japan's net earned premiums were
For the first nine months, net earned premiums in yen were
In dollar terms, net earned premiums decreased
For the first nine months, net earned premiums in dollars were
For the quarter, total new annualized premium sales (sales) increased
AFLAC
Aflac
For the first nine months, net earned premiums increased
Aflac
CORPORATE AND OTHER
For the quarter, total adjusted revenues increased
For the first nine months, total adjusted revenues increased
DIVIDEND AND CAPITAL RETURNED TO SHAREHOLDERS
The board of directors declared the fourth quarter dividend of
In the third quarter, Aflac Incorporated deployed
OUTLOOK
Commenting on the company's results, Aflac Incorporated Chairman and Chief Executive Officer Daniel P. Amos stated: "I am pleased that Aflac delivered very solid adjusted earnings for the quarter and the first nine months. We have continued to actively concentrate on generating profitable growth in the
"Looking at our operations in
"In the
"We continue to generate strong capital and cash flows while maintaining our commitment to prudent liquidity and capital management. We have been very pleased with our investments, which have continued to produce strong net investment income with minimal losses and impairments. I am very pleased that 2024 marks 42 consecutive years of dividend increases, a record we treasure. We remain committed to extending this record, supported by our financial strength. In the quarter, we repurchased
*See Non-
ABOUT AFLAC INCORPORATED
Aflac Incorporated (NYSE: AFL), a Fortune 500 company, has helped provide financial protection and peace of mind for nearly seven decades to millions of policyholders and customers through its subsidiaries in the
1 LIMRA 2023 U.S. Supplemental Health Insurance Total Market Report |
A copy of Aflac's financial supplement for the quarter can be found on the "Investors" page at aflac.com.
Aflac Incorporated will webcast its quarterly conference call via the "Investors" page of aflac.com at 8:00 a.m. (ET) on October 31, 2024.
Note: Tables within this document may not foot due to rounding.
AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED INCOME STATEMENT | ||||||
(UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS) | ||||||
THREE MONTHS ENDED SEPTEMBER 30, | 2024 | 2023 | % Change | |||
Total revenues | $ 2,949 | $ 4,950 | (40.4) % | |||
Benefits and claims, net | 1,595 | 1,860 | (14.2) | |||
Total acquisition and operating expenses | 1,262 | 1,285 | (1.8) | |||
Earnings before income taxes | 92 | 1,805 | (94.9) | |||
Income taxes | 185 | 236 | ||||
Net earnings | $ (93) | $ 1,569 | (105.9) % | |||
Net earnings per share – basic | $ (0.17) | $ 2.65 | (106.4) % | |||
Net earnings per share – diluted | (0.17) | 2.64 | (106.4) | |||
Shares used to compute earnings per share (000): | ||||||
Basic | 557,899 | 591,246 | (5.6) % | |||
Diluted | 560,414 | 593,596 | (5.6) | |||
Dividends paid per share | $ 0.50 | $ 0.42 | 19.0 % |
AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED INCOME STATEMENT | ||||||
(UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS) | ||||||
NINE MONTHS ENDED SEPTEMBER 30, | 2024 | 2023 | % Change | |||
Total revenues | (9.4) % | |||||
Benefits and claims, net | 5,527 | 6,108 | (9.5) | |||
Total acquisition and operating expenses | 3,715 | 3,843 | (3.3) | |||
Earnings before income taxes | 4,282 | 4,972 | (13.9) | |||
Income taxes | 741 | 581 | ||||
Net earnings | $ 3,541 | $ 4,391 | (19.4) % | |||
Net earnings per share – basic | $ 6.26 | $ 7.31 | (14.4) % | |||
Net earnings per share – diluted | 6.23 | 7.28 | (14.4) | |||
Shares used to compute earnings per share (000): | ||||||
Basic | 565,757 | 600,991 | (5.9) % | |||
Diluted | 568,216 | 603,419 | (5.8) | |||
Dividends paid per share | $ 1.50 | $ 1.26 | 19.0 % |
AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED BALANCE SHEET | ||||||
(UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AMOUNTS) | ||||||
SEPTEMBER 30, | 2024 | 2023 | % Change | |||
Assets: | ||||||
Total investments and cash | 3.9 % | |||||
Deferred policy acquisition costs | 9,232 | 8,771 | 5.3 | |||
Other assets | 3,609 | 5,034 | (28.3) | |||
Total assets | 2.7 % | |||||
Liabilities and shareholders' equity: | ||||||
Policy liabilities | $ 87,554 | $ 86,028 | 1.8 % | |||
Notes payable and lease obligations | 7,978 | 6,961 | 14.6 | |||
Other liabilities | 8,080 | 9,453 | (14.5) | |||
Shareholders' equity | 24,830 | 22,669 | 9.5 | |||
Total liabilities and shareholders' equity | 2.7 % | |||||
Shares outstanding at end of period (000) | 556,717 | 586,897 | (5.1) % |
NON-
This document includes references to the Company's financial performance measures which are not calculated in accordance with
Due to the size of Aflac Japan, where the functional currency is the Japanese yen, fluctuations in the yen/dollar exchange rate can have a significant effect on reported results. In periods when the yen weakens, translating yen into dollars results in fewer dollars being reported. When the yen strengthens, translating yen into dollars results in more dollars being reported. Consequently, yen weakening has the effect of suppressing current period results in relation to the comparable prior period, while yen strengthening has the effect of magnifying current period results in relation to the comparable prior period. A significant portion of the Company's business is conducted in yen and never converted into dollars but translated into dollars for
The company defines the non-
- Adjusted earnings are adjusted revenues less benefits and adjusted expenses. Adjusted earnings per share (basic or diluted) are the adjusted earnings for the period divided by the weighted average outstanding shares (basic or diluted) for the period presented. The adjustments to both revenues and expenses account for certain items that are outside of management's control because they tend to be driven by general economic conditions and events or are related to infrequent activities not directly associated with insurance operations. Adjusted revenues are
U.S. GAAP total revenues excluding adjusted net investment gains and losses. Adjusted expenses areU.S. GAAP total acquisition and operating expenses including the impact of interest from derivatives associated with notes payable but excluding any non-recurring or other items not associated with the normal course of the Company's insurance operations and that do not reflect the Company's underlying business performance. Management uses adjusted earnings and adjusted earnings per diluted share to evaluate the financial performance of the Company's insurance operations on a consolidated basis and believes that a presentation of these financial measures is vitally important to an understanding of the underlying profitability drivers and trends of the Company's insurance business. The most comparableU.S. GAAP financial measures for adjusted earnings and adjusted earnings per share (basic or diluted) are net earnings and net earnings per share, respectively. - Adjusted earnings excluding current period foreign currency impact are computed using the average foreign currency exchange rate for the comparable prior-year period, which eliminates fluctuations driven solely by foreign currency exchange rate changes. Adjusted earnings per diluted share excluding current period foreign currency impact is adjusted earnings excluding current period foreign currency impact divided by the weighted average outstanding diluted shares for the period presented. The Company considers adjusted earnings excluding current period foreign currency impact and adjusted earnings per diluted share excluding current period foreign currency impact important because a significant portion of the Company's business is conducted in
Japan and foreign exchange rates are outside management's control; therefore, the Company believes it is important to understand the impact of translating foreign currency (primarily Japanese yen) intoU.S. dollars. The most comparableU.S. GAAP financial measures for adjusted earnings excluding current period foreign currency impact and adjusted earnings per diluted share excluding current period foreign currency impact are net earnings and net earnings per share, respectively. - Adjusted return on equity is adjusted earnings divided by average shareholders' equity, excluding accumulated other comprehensive income (AOCI). Management uses adjusted return on equity to evaluate the financial performance of the Company's insurance operations on a consolidated basis and believes that a presentation of this financial measure is vitally important to an understanding of the underlying profitability drivers and trends of the Company's insurance business. The Company considers adjusted return on equity important as it excludes components of AOCI, which fluctuate due to market movements that are outside management's control. The most comparable
U.S. GAAP financial measure for adjusted return on equity is return on average equity (ROE) as determined using net earnings and average total shareholders' equity. - Adjusted return on equity excluding foreign currency impact is adjusted earnings excluding the current period foreign currency impact divided by average shareholders' equity, excluding AOCI. The Company considers adjusted return on equity excluding foreign currency impact important as it excludes changes in foreign currency and components of AOCI, which fluctuate due to market movements that are outside management's control. The most comparable
U.S. GAAP financial measure for adjusted return on equity excluding foreign currency impact is return on average equity (ROE) as determined using net earnings and average total shareholders' equity. - Amortized hedge costs/income represent costs/income incurred or recognized as a result of using foreign currency derivatives to hedge certain foreign exchange risks in the Company's
Japan segment or in Corporate and other. These amortized hedge costs/income are estimated at the inception of the derivatives based on the specific terms of each contract and are recognized on a straight-line basis over the contractual term of the derivative. The Company believes that amortized hedge costs/income measure the periodic currency risk management costs/income related to hedging certain foreign currency exchange risks and are an important component of net investment income. There is no comparableU.S. GAAP financial measure for amortized hedge costs/income. - Adjusted book value is the
U.S. GAAP book value (representing total shareholders' equity), less AOCI as recorded on theU.S. GAAP balance sheet. Adjusted book value per common share is adjusted book value at the period end divided by the ending outstanding common shares for the period presented. The Company considers adjusted book value and adjusted book value per common share important as they exclude AOCI, which fluctuates due to market movements that are outside management's control. The most comparableU.S. GAAP financial measures for adjusted book value and adjusted book value per common share are total book value and total book value per common share, respectively. - Adjusted book value including unrealized foreign currency translation gains and losses is adjusted book value plus unrealized foreign currency translation gains and losses. Adjusted book value including unrealized foreign currency translation gains and losses per common share is adjusted book value plus unrealized foreign currency translation gains and losses at the period end divided by the ending outstanding common shares for the period presented. The Company considers adjusted book value including unrealized foreign currency translation gains and losses, and its related per share financial measure, important as they exclude certain components of AOCI, which fluctuate due to market movements that are outside management's control; however, it includes the impact of foreign currency as a result of the significance of Aflac's
Japan operation. The most comparableU.S. GAAP financial measures for adjusted book value including unrealized foreign currency translation gains and losses and adjusted book value including unrealized foreign currency translation gains and losses per common share are total book value and total book value per common share, respectively. - Adjusted net investment income is net investment income adjusted for i) amortized hedge cost/income related to foreign currency exposure management strategies and certain derivative activity, and ii) net interest income/expense from foreign currency and interest rate derivatives associated with certain investment strategies, which are reclassified from net investment gains and losses to net investment income. The Company considers adjusted net investment income important because it provides a more comprehensive understanding of the costs and income associated with the Company's investments and related hedging strategies. The most comparable
U.S. GAAP financial measure for adjusted net investment income is net investment income. - Adjusted net investment gains and losses are net investment gains and losses adjusted for i) amortized hedge cost/income related to foreign currency exposure management strategies and certain derivative activity, ii) net interest income/expense from foreign currency and interest rate derivatives associated with certain investment strategies, which are both reclassified to net investment income, and iii) the impact of interest from derivatives associated with notes payable, which is reclassified to interest expense as a component of total adjusted expenses. The Company considers adjusted net investment gains and losses important as it represents the remainder amount that is considered outside management's control, while excluding the components that are within management's control and are accordingly reclassified to net investment income and interest expense. The most comparable
U.S. GAAP financial measure for adjusted net investment gains and losses is net investment gains and losses.
RECONCILIATION OF NET EARNINGS TO ADJUSTED EARNINGS | ||||||
(UNAUDITED – IN MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS) | ||||||
THREE MONTHS ENDED SEPTEMBER 30, | 2024 | 2023 | % Change | |||
Net earnings | $ (93) | $ 1,569 | (105.9) % | |||
Items impacting net earnings: | ||||||
Adjusted net investment (gains) losses | 1,347 | (504) | ||||
Other and non-recurring (income) loss | — | (3) | ||||
Income tax (benefit) expense on items excluded from adjusted earnings | (43) | 33 | ||||
Adjusted earnings | 1,211 | 1,095 | 10.6 % | |||
Current period foreign currency impact 1 | 16 | N/A | ||||
Adjusted earnings excluding current period foreign | $ 1,095 | 12.1 % | ||||
Net earnings per diluted share | $ 2.64 | (106.4) % | ||||
Items impacting net earnings: | ||||||
Adjusted net investment (gains) losses | 2.40 | (0.85) | ||||
Other and non-recurring (income) loss | — | (0.01) | ||||
Income tax (benefit) expense on items excluded from adjusted earnings | (0.08) | 0.06 | ||||
Adjusted earnings per diluted share | 2.16 | 1.84 | 17.4 % | |||
Current period foreign currency impact 1 | 0.03 | N/A | ||||
Adjusted earnings per diluted share excluding | $ 2.19 | $ 1.84 | 19.0 % |
1 | Prior period foreign currency impact reflected as "N/A" to isolate change for current period only. |
2 | Amounts excluding current period foreign currency impact are computed using the average foreign currency exchange rate for the comparable prior-year period, which eliminates fluctuations driven solely by foreign currency exchange rate changes. |
RECONCILIATION OF NET EARNINGS TO ADJUSTED EARNINGS | ||||||
(UNAUDITED – IN MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS) | ||||||
NINE MONTHS ENDED SEPTEMBER 30, | 2024 | 2023 | % Change | |||
Net earnings | $ 3,541 | $ 4,391 | (19.4) % | |||
Items impacting net earnings: | ||||||
Adjusted net investment (gains) losses | (411) | (1,363) | ||||
Other and non-recurring (income) loss | 1 | (38) | ||||
Income tax (benefit) expense on items excluded from adjusted earnings | 76 | 12 | ||||
Adjusted earnings | 3,207 | 3,001 | 6.9 % | |||
Current period foreign currency impact 1 | 97 | N/A | ||||
Adjusted earnings excluding current period foreign | $ 3,304 | $ 3,001 | 10.1 % | |||
Net earnings per diluted share | $ 6.23 | $ 7.28 | (14.4) % | |||
Items impacting net earnings: | ||||||
Adjusted net investment (gains) losses | (0.72) | (2.26) | ||||
Other and non-recurring (income) loss | — | (0.06) | ||||
Income tax (benefit) expense on items excluded from adjusted earnings | 0.13 | 0.02 | ||||
Adjusted earnings per diluted share | 5.64 | 4.97 | 13.5 % | |||
Current period foreign currency impact 1 | 0.17 | N/A | ||||
Adjusted earnings excluding current period foreign | $ 5.81 | $ 4.97 | 16.9 % |
1 | Prior period foreign currency impact reflected as "N/A" to isolate change for current period only. |
2 | Amounts excluding current period foreign currency impact are computed using the average foreign currency exchange rate for the comparable prior-year period, which eliminates fluctuations driven solely by foreign currency exchange rate changes. |
RECONCILIATION OF NET INVESTMENT (GAINS) LOSSES TO ADJUSTED NET INVESTMENT (GAINS) LOSSES | ||||||
(UNAUDITED – IN MILLIONS) | ||||||
THREE MONTHS ENDED SEPTEMBER 30, | 2024 | 2023 | % Change | |||
Net investment (gains) losses | $ 1,408 | $ (423) | (432.9) % | |||
Items impacting net investment (gains) losses: | ||||||
Amortized hedge costs | (7) | (26) | ||||
Amortized hedge income | 25 | 25 | ||||
Net interest income (expense) from derivatives associated with certain investment strategies | (88) | (90) | ||||
Impact of interest from derivatives associated with notes payable1 | 8 | 10 | ||||
Adjusted net investment (gains) losses | $ 1,347 | $ (504) | (367.3) % |
1 | Amounts are included with interest expenses that are a component of adjusted expenses. |
RECONCILIATION OF NET INVESTMENT INCOME TO ADJUSTED NET INVESTMENT INCOME | ||||||
(UNAUDITED – IN MILLIONS) | ||||||
THREE MONTHS ENDED SEPTEMBER 30, | 2024 | 2023 | % Change | |||
Net investment income | $ 1,006 | $ 1,004 | 0.2 % | |||
Items impacting net investment income: | ||||||
Amortized hedge costs | (7) | (26) | ||||
Amortized hedge income | 25 | 25 | ||||
Net interest income (expense) from derivatives associated with certain investment strategies | (88) | (90) | ||||
Adjusted net investment income | $ 936 | $ 915 | 2.3 % |
RECONCILIATION OF NET INVESTMENT (GAINS) LOSSES TO ADJUSTED NET INVESTMENT (GAINS) LOSSES | ||||||
(UNAUDITED – IN MILLIONS) | ||||||
NINE MONTHS ENDED SEPTEMBER 30, | 2024 | 2023 | % Change | |||
Net investment (gains) losses | $ (239) | $ (1,101) | (78.3) % | |||
Items impacting net investment (gains) losses: | ||||||
Amortized hedge costs | (19) | (148) | ||||
Amortized hedge income | 87 | 92 | ||||
Net interest income (expense) from derivatives associated with certain investment strategies | (265) | (239) | ||||
Impact of interest from derivatives associated with notes payable1 | 25 | 33 | ||||
Adjusted net investment (gains) losses | $ (411) | $ (1,363) | (69.8) % |
1 | Amounts are included with interest expenses that are a component of adjusted expenses. |
RECONCILIATION OF NET INVESTMENT INCOME TO ADJUSTED NET INVESTMENT INCOME | ||||||
(UNAUDITED – IN MILLIONS) | ||||||
NINE MONTHS ENDED SEPTEMBER 30, | 2024 | 2023 | % Change | |||
Net investment income | $ 3,100 | $ 2,946 | 5.2 % | |||
Items impacting net investment income: | ||||||
Amortized hedge costs | (19) | (148) | ||||
Amortized hedge income | 87 | 92 | ||||
Net interest income (expense) from derivatives associated with certain investment strategies | (265) | (239) | ||||
Adjusted net investment income | $ 2,903 | $ 2,651 | 9.5 % |
RECONCILIATION OF | ||||||
(UNAUDITED - IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS) | ||||||
SEPTEMBER 30, | 2024 | 2023 | % Change | |||
$ 24,830 | $ 22,669 | |||||
Less: | ||||||
Unrealized foreign currency translation gains (losses) | (4,139) | (4,484) | ||||
Unrealized gains (losses) on securities and derivatives | 537 | (427) | ||||
Effect of changes in discount rate assumptions | (67) | (866) | ||||
Pension liability adjustment | (8) | 17 | ||||
Total AOCI | (3,677) | (5,760) | ||||
Adjusted book value | $ 28,507 | $ 28,429 | ||||
Add: | ||||||
Unrealized foreign currency translation gains (losses) | (4,139) | (4,484) | ||||
Adjusted book value including unrealized foreign currency translation gains (losses) | $ 24,368 | $ 23,945 | ||||
Number of outstanding shares at end of period (000) | 556,717 | 586,897 | ||||
$ 44.60 | $ 38.63 | 15.5 % | ||||
Less: | ||||||
Unrealized foreign currency translation gains (losses) per common share | (7.43) | (7.64) | ||||
Unrealized gains (losses) on securities and derivatives per common share | 0.96 | (0.73) | ||||
Effect of changes in discount rate assumptions per common share | (0.12) | (1.48) | ||||
Pension liability adjustment per common share | (0.01) | 0.03 | ||||
Total AOCI per common share | (6.60) | (9.81) | ||||
Adjusted book value per common share | $ 51.21 | $ 48.44 | 5.7 % | |||
Add: | ||||||
Unrealized foreign currency translation gains (losses) per common share | (7.43) | (7.64) | ||||
Adjusted book value including unrealized foreign currency translation gains (losses) per common share | $ 43.77 | $ 40.80 | 7.3 % |
RECONCILIATION OF | ||||
(EXCLUDING IMPACT OF FOREIGN CURRENCY) | ||||
THREE MONTHS ENDED SEPTEMBER 30, | 2024 | 2023 | ||
(1.5) % | 29.1 % | |||
Impact of excluding unrealized foreign currency translation gains (losses) | 0.3 | (4.5) | ||
Impact of excluding unrealized gains (losses) on securities and derivatives | — | 0.8 | ||
Impact of excluding effect of changes in discount rate assumptions | — | (3.1) | ||
Impact of excluding pension liability adjustment | — | — | ||
Impact of excluding AOCI | 0.2 | (6.8) | ||
(1.3) | 22.3 | |||
Differences between adjusted earnings and net earnings2 | 18.0 | (6.7) | ||
Adjusted ROE - reported | 16.7 | 15.6 | ||
Less: Impact of foreign currency3 | (0.2) | N/A | ||
Adjusted ROE, excluding impact of foreign currency | 17.0 | 15.6 |
1 | |
2 | See separate reconciliation of net income to adjusted earnings. |
3 | Impact of foreign currency is calculated by restating all foreign currency components of the income statement to the weighted average foreign currency exchange rate for the comparable prior year period. The impact is the difference of the restated adjusted earnings compared to reported adjusted earnings. For comparative purposes, only current period income is restated using the weighted average prior period exchange rate, which eliminates the foreign currency impact for the current period. This allows for equal comparison of this financial measure. |
RECONCILIATION OF | ||||
(EXCLUDING IMPACT OF FOREIGN CURRENCY) | ||||
NINE MONTHS ENDED SEPTEMBER 30, | 2024 | 2023 | ||
20.2 % | 27.4 % | |||
Impact of excluding unrealized foreign currency translation gains (losses) | (2.9) | (4.0) | ||
Impact of excluding unrealized gains (losses) on securities and derivatives | 0.6 | (0.6) | ||
Impact of excluding effect of changes in discount rate assumptions | (0.9) | (1.5) | ||
Impact of excluding pension liability adjustment | — | — | ||
Impact of excluding AOCI | (3.3) | (6.1) | ||
16.9 | 21.3 | |||
Differences between adjusted earnings and net earnings2 | (1.6) | (6.7) | ||
Adjusted ROE - reported | 15.3 | 14.6 | ||
Less: Impact of foreign currency3 | (0.5) | N/A | ||
Adjusted ROE, excluding impact of foreign currency | 15.7 | 14.6 |
1 | |
2 | See separate reconciliation of net income to adjusted earnings. |
3 | Impact of foreign currency is calculated by restating all foreign currency components of the income statement to the weighted average foreign currency exchange rate for the comparable prior year period. The impact is the difference of the restated adjusted earnings compared to reported adjusted earnings. For comparative purposes, only current period income is restated using the weighted average prior period exchange rate, which eliminates the foreign currency impact for the current period. This allows for equal comparison of this financial measure. |
EFFECT OF FOREIGN CURRENCY ON ADJUSTED RESULTS1 | ||||
(SELECTED PERCENTAGE CHANGES, UNAUDITED) | ||||
THREE MONTHS ENDED SEPTEMBER 30, 2024 | Including Currency Changes | Excluding Currency Changes2 | ||
Net earned premiums3 | (4.3) % | (3.1) % | ||
Adjusted net investment income4 | 2.3 | 2.7 | ||
Total benefits and expenses | (9.2) | (8.3) | ||
Adjusted earnings | 10.6 | 12.1 | ||
Adjusted earnings per diluted share | 17.4 | 19.0 |
1 | Refer to previously defined adjusted earnings and adjusted earnings per diluted share. |
2 | Amounts excluding currency changes were determined using the same foreign currency exchange rate for the current period as the comparable period in the prior year, which eliminates dollar-based fluctuations driven solely from currency rate changes. |
3 | Net of reinsurance |
4 | Refer to previously defined adjusted net investment income. |
EFFECT OF FOREIGN CURRENCY ON ADJUSTED RESULTS1 | ||||
(SELECTED PERCENTAGE CHANGES, UNAUDITED) | ||||
NINE MONTHS ENDED SEPTEMBER 30, 2024 | Including Currency Changes | Excluding Currency Changes2 | ||
Net earned premiums3 | (5.8) % | (0.9) % | ||
Adjusted net investment income4 | 9.5 | 11.9 | ||
Total benefits and expenses | (7.4) | (2.6) | ||
Adjusted earnings | 6.9 | 10.1 | ||
Adjusted earnings per diluted share | 13.5 | 16.9 |
1 | Refer to previously defined adjusted earnings and adjusted earnings per diluted share. |
2 | Amounts excluding currency changes were determined using the same foreign currency exchange rate for the current period as the comparable period in the prior year, which eliminates dollar-based fluctuations driven solely from currency rate changes. |
3 | Net of reinsurance |
4 | Refer to previously defined adjusted net investment income. |
FORWARD-LOOKING INFORMATION
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" to encourage companies to provide prospective information, so long as those informational statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those included in the forward-looking statements. The company desires to take advantage of these provisions. This document contains cautionary statements identifying important factors that could cause actual results to differ materially from those projected herein, and in any other statements made by company officials in communications with the financial community and contained in documents filed with the Securities and Exchange Commission (SEC). Forward-looking statements are not based on historical information and relate to future operations, strategies, financial results or other developments. Furthermore, forward-looking information is subject to numerous assumptions, risks and uncertainties. In particular, statements containing words such as "expect," "anticipate," "believe," "goal," "objective," "may," "should," "estimate," "intends," "projects," "will," "assumes," "potential," "target," "outlook" or similar words as well as specific projections of future results, generally qualify as forward-looking. Aflac undertakes no obligation to update such forward-looking statements.
The company cautions readers that the following factors, in addition to other factors mentioned from time to time, could cause actual results to differ materially from those contemplated by the forward-looking statements:
- difficult conditions in global capital markets and the economy, including inflation
- defaults and credit downgrades of investments
- global fluctuations in interest rates and exposure to significant interest rate risk
- concentration of business in
Japan - limited availability of acceptable yen-denominated investments
- foreign currency fluctuations in the yen/dollar exchange rate
- differing interpretations applied to investment valuations
- significant valuation judgments in determination of expected credit losses recorded on the Company's investments
- decreases in the Company's financial strength or debt ratings
- decline in creditworthiness of other financial institutions
- the Company's ability to attract and retain qualified sales associates, brokers, employees, and distribution partners
- deviations in actual experience from pricing and reserving assumptions
- ability to continue to develop and implement improvements in information technology systems and on successful execution of revenue growth and expense management initiatives
- interruption in telecommunication, information technology and other operational systems, or a failure to maintain the security, confidentiality, integrity or privacy of sensitive data residing on such systems
- subsidiaries' ability to pay dividends to the Parent Company
- inherent limitations to risk management policies and procedures
- operational risks of third-party vendors
- tax rates applicable to the Company may change
- failure to comply with restrictions on policyholder privacy and information security
- extensive regulation and changes in law or regulation by governmental authorities
- competitive environment and ability to anticipate and respond to market trends
- catastrophic events, including, but not limited to, as a result of climate change, epidemics, pandemics, tornadoes, hurricanes, earthquakes, tsunamis, war or other military action, major public health issues, terrorism or other acts of violence, and damage incidental to such events
- ability to protect the Aflac brand and the Company's reputation
- ability to effectively manage key executive succession
- changes in accounting standards
- level and outcome of litigation or regulatory inquiries
- allegations or determinations of worker misclassification in
the United States
Analyst and investor contact - David A. Young, 706.596.3264; 800.235.2667 or dyoung@aflac.com
Media contact - Ines Gutzmer, 762.207.7601 or igutzmer@aflac.com
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SOURCE Aflac Incorporated
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