10-QPeriod: Q3 FY2021

AFLAC INC Quarterly Report for Q3 Ended Sep 30, 2021

Filed October 28, 2021For Securities:AFL

Summary

Aflac Incorporated reported solid financial results for the nine months ended September 30, 2021. Total revenues increased to $16.7 billion, up from $16.2 billion in the prior year period, driven by growth in net investment income. Net earnings for the nine months were $3.3 billion, a decrease from $3.8 billion in the same period last year, impacted by a significant one-time tax benefit recognized in the prior year. However, excluding this prior year benefit, adjusted earnings showed strong growth, reaching $3.2 billion compared to $2.8 billion in the prior year, indicating operational strength. The company demonstrated resilience in its core insurance segments. Aflac Japan experienced a slight decline in net premium income in yen terms due to product mix and pandemic impacts, but saw an increase in adjusted net investment income. Aflac U.S. reported an increase in sales driven by economic reopening and a favorable claims environment, leading to higher pretax adjusted earnings. The company maintained a strong capital and liquidity position, with total investments and cash at $146.0 billion and shareholders' equity at $33.6 billion. Share repurchases continued, with $1.7 billion of common stock repurchased in the first nine months of 2021, demonstrating a commitment to returning capital to shareholders.

Financial Highlights

34 data points
Beta

Revenue

$5.24B

Net Income

$888.00M

17.0% Net Margin

EPS (Diluted)

$1.32

Total Assets

$160.60B

Cash & Equivalents

$6.21B

Free Cash Flow

$1.85B

Financial Statements
Beta
Revenue$5.24B
SG&A Expenses$869.00M
Operating Expenses$1.51B
Operating Income$1.29B
Interest Expense$57.00M
Net Income$888.00M
EPS (Basic)$1.33
EPS (Diluted)$1.32
Shares Outstanding (Basic)668.76M
Shares Outstanding (Diluted)671.92M

Key Highlights

  • 1Total revenues grew to $16.7 billion for the nine months ended September 30, 2021, compared to $16.2 billion in the prior year.
  • 2Net earnings decreased to $3.3 billion for the nine months ended September 30, 2021, from $3.8 billion in the prior year, largely due to a significant one-time tax benefit in the prior year.
  • 3Adjusted earnings (a non-GAAP measure) increased to $3.2 billion for the nine months ended September 30, 2021, from $2.8 billion in the prior year, showing operational improvement.
  • 4Aflac Japan's pretax adjusted earnings increased by 17.4% to $2.9 billion for the nine months ended September 30, 2021.
  • 5Aflac U.S. pretax adjusted earnings increased by 12.5% to $1.2 billion for the nine months ended September 30, 2021.
  • 6The company repurchased $1.7 billion of common stock in the first nine months of 2021, demonstrating capital return to shareholders.
  • 7Total investments and cash remained strong at $146.0 billion as of September 30, 2021.

Frequently Asked Questions

The decrease in net earnings for the nine months ended September 30, 2021, compared to the prior year, was primarily due to a significant one-time tax benefit of $1.4 billion recognized in the third quarter of 2020, related to the release of valuation allowances on deferred foreign tax credits. Excluding this item, adjusted earnings showed a healthy increase.

Aflac Japan's pretax adjusted earnings increased by 17.4% to $2.9 billion, driven by higher adjusted net investment income. Aflac U.S. pretax adjusted earnings increased by 12.5% to $1.2 billion, primarily due to lower benefit ratios resulting from reduced incurred claims.

Aflac Incorporated demonstrated a commitment to returning capital to shareholders through share repurchases and dividends. In the first nine months of 2021, the company repurchased $1.7 billion of its common stock. Additionally, the board declared a cash dividend of $0.33 per share for the fourth quarter of 2021, an increase from the prior year's comparable quarter.