XML 37 R19.htm IDEA: XBRL DOCUMENT
v3.25.0.1

INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2024
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The components of income tax expense (benefit) applicable to pretax earnings for the years ended December 31 were as follows:
(In millions) | Foreign |  | U.S. |  | Total
2024: |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | 1,196 |  |  |  |  | $ | 134 |  |  |  |  | $ | 1,330 |  |
Deferred |  | 159 |  |  |  |  | (515) |  |  |  |  | (356) |  |
Total income tax expense |  | $ | 1,355 |  |  |  |  | $ | (381) |  |  |  |  | $ | 974 |  |
2023: |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | 1,275 |  |  |  |  | $ | 388 |  |  |  |  | $ | 1,663 |  |
Deferred |  | (160) |  |  |  |  | (900) |  |  |  |  | (1,060) |  |
Total income tax expense |  | $ | 1,115 |  |  |  |  | $ | (512) |  |  |  |  | $ | 603 |  |
2022: |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | 913 |  |  |  |  | $ | 268 |  |  |  |  | $ | 1,181 |  |
Deferred |  | 200 |  |  |  |  | (930) |  |  |  |  | (730) |  |
Total income tax expense |  | $ | 1,113 |  |  |  |  | $ | (662) |  |  |  |  | $ | 451 |  |
The Japan income tax rate for the fiscal years 2024, 2023 and 2022 was 28.0%. Aflac Japan holds certain U.S. dollar-denominated assets in a Delaware Statutory Trust (DST). These assets are mostly comprised of various U.S. dollar-denominated commercial mortgage loans. The functional currency of the DST for U.S. tax purposes was historically the Japanese yen. In 2022, the Company requested a change in tax accounting method through the Internal Revenue Service's automatic consent procedures to change the functional currency of the DST for U.S. tax purposes to the U.S. dollar. As a result, foreign currency translation gains or losses on assets held in the DST are no longer recognized for U.S. tax purposes. The Company historically recorded a deferred tax liability for foreign currency translation gains on the DST assets, which was released in the third quarter of 2022 as a result of the functional currency change. The release of the deferred tax liability resulted in the Company recognizing an income tax benefit of $208 million in 2024, $174 million in 2023 and $452 million in 2022. Income tax expense in the accompanying statements of earnings varies from the amount computed by applying the expected U.S. tax rate of 21% to pretax earnings. The principal reasons for the differences and the related tax effects for the years ended December 31 were as follows:
(In millions) | 2024 |  | 2023 |  | 2022
Income taxes based on U.S. statutory rates |  | $ | 1,348 |  |  |  |  | $ | 1,105 |  |  |  |  | $ | 1,023 |  |
DST functional currency change |  | (208) |  |  |  |  | (174) |  |  |  |  | (452) |  |
Solar and historic tax credits, net of amortization |  | (164) |  |  |  |  | (348) |  |  |  |  | (83) |  |
Other, net |  | (2) |  |  |  |  | 20 |  |  |  |  | (37) |  |
Income tax expense |  | $ | 974 |  |  |  |  | $ | 603 |  |  |  |  | $ | 451 |  |
(In millions) | 2024 |  | 2023 |  | 2022
Statements of earnings |  | $ | 974 |  |  |  |  | $ | 603 |  |  |  |  | $ | 451 |  |
Other comprehensive income (loss): |  |  |  |  |  |  |  |  |  |  |
Unrealized foreign currency translation gains (losses) during period |  | 160 |  |  |  |  | 140 |  |  |  |  | 547 |  |
Unrealized gains (losses) on fixed maturity securities: |  |  |  |  |  |  |  |  |  |  |
Unrealized holding gains (losses) on fixed maturity securities during period |  | (265) |  |  |  |  | 520 |  |  |  |  | (2,657) |  |
Reclassification adjustment for (gains) losses on fixed maturity securities included in net earnings |  | (41) |  |  |  |  | (35) |  |  |  |  | (95) |  |
Unrealized gains (losses) on derivatives during period |  | 1 |  |  |  |  | 1 |  |  |  |  | 1 |  |
Effect of changes in discount rate assumptions during period |  | 1,214 |  |  |  |  | (122) |  |  |  |  | 3,650 |  |
Pension liability adjustment during period |  | 5 |  |  |  |  | 7 |  |  |  |  | 35 |  |
Total income tax expense (benefit) related to items of other comprehensive income (loss) |  | 1,074 |  |  |  |  | 511 |  |  |  |  | 1,481 |  |
Total income taxes |  | $ | 2,048 |  |  |  |  | $ | 1,114 |  |  |  |  | $ | 1,932 |  |
The income tax effects of the temporary differences that gave rise to deferred income tax assets and liabilities as of December 31 were as follows:
(In millions) | 2024 |  | 2023
Deferred income tax liabilities: |  |  |  |  |  |  |
Deferred policy acquisition costs |  | $ | 2,637 |  |  |  |  | $ | 2,883 |  |
Unrealized gains and other basis differences on investments |  | 615 |  |  |  |  | 988 |  |
Foreign currency gain on Aflac Japan |  | 1 |  |  |  |  | 2 |  |
Premiums receivable |  | 43 |  |  |  |  | 85 |  |
Policy benefit reserves |  | 2,509 |  |  |  |  | 110 |  |
Other |  | 54 |  |  |  |  | 0 |  |
Total deferred income tax liabilities |  | 5,859 |  |  |  |  | 4,068 |  |
Deferred income tax assets: |  |  |  |  |  |  |
Unfunded retirement benefits |  | 4 |  |  |  |  | 5 |  |
Other accrued expenses |  | 32 |  |  |  |  | 28 |  |
Policy and contract claims |  | 514 |  |  |  |  | 572 |  |
Deferred compensation |  | 31 |  |  |  |  | 45 |  |
Depreciation |  | 255 |  |  |  |  | 265 |  |
Anticipatory foreign tax credit |  | 3,262 |  |  |  |  | 2,210 |  |
Deferred foreign tax credit and carryforward |  | 1,428 |  |  |  |  | 1,077 |  |
Other |  | 0 |  |  |  |  | 135 |  |
Total deferred income tax assets |  | 5,526 |  |  |  |  | 4,337 |  |
Net deferred income tax (asset) liability |  | 333 |  |  |  |  | (269) |  |
Current income tax (asset) liability |  | 240 |  |  |  |  | 423 |  |
Total income tax liability |  | $ | 573 |  |  |  |  | $ | 154 |  |
The application of U.S. GAAP requires the Company to evaluate the recoverability of deferred tax assets and establish a valuation allowance if necessary to reduce the deferred tax asset to an amount that is more likely than not expected to be realized. The Company has determined no valuation allowance against its anticipatory foreign tax credits is necessary. The anticipatory foreign tax credit represents the foreign tax credit the Company will generate from the reversal of Japan deferred tax liabilities in the future. Deferred foreign tax credits are foreign tax credits generated in the current tax year by the Japanese life company, but are unable to be utilized until 2025 due to Japan's current tax year not closing until March 31, 2025. Based upon a review of the Company's anticipated future taxable income, and including all other available evidence, both positive and negative, the Company's management has concluded that it is more likely than not that all other deferred tax assets will be realized. Under U.S. income tax rules, only 35% of non-life operating losses can be offset against life insurance taxable income each year. For current U.S. income tax purposes, as of December 31, 2024, there were non-life operating loss carryforwards of $26 million available to offset against future taxable income, which expire after December 31, 2040, and there were life operating loss carryforwards available to offset against future taxable income of $92 million, which do not expire. The Company has no capital loss carryforwards available to offset capital gains. The Company has a foreign tax credit carryforward of $314 million as of December 31, 2024, which expires after December 31, 2034. The Company files federal income tax returns in the U.S. and Japan as well as state or prefecture income tax returns in various jurisdictions in the two countries. There are currently no other open Federal, State, or local U.S. income tax audits. U.S. federal income tax returns for years before 2021 are no longer subject to examination. Japan corporate income tax returns for years before the tax year ended March 2023 are no longer subject to examination. Management believes it has established adequate tax liabilities and final resolution of all open audits is not expected to have a material impact on the Company's consolidated financial statements. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows for the years ended December 31:
(In millions) |  | 2024 |  |  | 2023 |
Balance, beginning of year |  | $ | 1 |  |  |  | $ | 5 |  |
Additions for tax positions of prior years |  | 0 |  |  |  | 0 |  |
Reductions for tax positions of prior years |  | (1) |  |  |  | (4) |  |
Balance, end of year |  | $ | 0 |  |  |  | $ | 1 |  |
Included in the balance of the liability for unrecognized tax benefits at December 31, 2024 and 2023, were no tax positions for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate, but would accelerate the payment of cash to the taxing authority to an earlier period. The Company has accrued an immaterial amount as of December 31, 2024, for permanent uncertainties, which if reversed would not have a material effect on the annual effective rate. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company recognized an immaterial amount of interest and penalties in 2024, 2023 and 2022. The Company accrued an immaterial amount for the payment of interest and penalties as of December 31, 2024 and 2023, respectively. As of December 31, 2024, there were no material uncertain tax positions for which the total amounts of unrecognized tax benefits will significantly increase or decrease within the next 12 months.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income tax. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 231 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482663/740-10-55-231 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12C -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12B -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147477891/740-270-50-1 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480990/946-20-50-13 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/740/tableOfContent Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-14 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-21 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-17 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration