Voya Financial(US:VOYA)2024-11-06 21:09PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents Voya Financial's unaudited condensed consolidated financial statements for the period ended September 30, 2024, covering balance sheets, operations, comprehensive income, equity changes, and cash flows, with detailed notes Condensed Consolidated Balance Sheets Voya Financial's total assets increased to $166.9 billion as of September 30, 2024, driven by separate accounts, with liabilities and equity also rising Condensed Consolidated Balance Sheet Highlights (in millions) | Metric | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | $166,933 | $157,085 | | Total Investments | $36,094 | $36,600 | | Assets held in separate accounts | $103,532 | $93,133 | | Total Liabilities | $160,351 | $151,032 | | Liabilities related to separate accounts | $103,532 | $93,133 | | Total Shareholders' Equity | $6,384 | $5,878 | Condensed Consolidated Statements of Operations Voya reported Q3 2024 net income of $98 million, or $0.98 diluted EPS, a decrease from Q3 2023, while year-to-date net income increased to $533 million Consolidated Statements of Operations Highlights (in millions, except per share data) | Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $1,956 | $1,823 | $6,040 | $5,529 | | Net Income (Loss) | $98 | $246 | $621 | $610 | | Net Income (Loss) available to common shareholders | $98 | $248 | $533 | $471 | | Diluted EPS | $0.98 | $2.29 | $5.20 | $4.31 | Condensed Consolidated Statements of Cash Flows Net cash from operating activities remained stable at $1.27 billion for the nine months ended September 30, 2024, while investing cash decreased and financing cash usage significantly reduced Cash Flow Summary for Nine Months Ended September 30 (in millions) | Cash Flow Category | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,266 | $1,274 | | Net cash provided by (used in) investing activities | $504 | $1,699 | | Net cash provided by (used in) financing activities | $(1,343) | $(3,063) | | Net increase (decrease) in cash and cash equivalents | $427 | $(90) | Notes to Condensed Consolidated Financial Statements This section details accounting policies and financial data, covering business operations, investments, derivatives, segment performance, equity, and financing agreements - On September 11, 2024, the Company announced a definitive agreement to acquire the full-service retirement plan business of OneAmerica Financial, expected to close on January 1, 2025, with consideration including ~$50 million in cash at closing and up to $160 million in contingent consideration27 - The company's business is organized into three primary segments: Wealth Solutions, Health Solutions, and Investment Management24 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Voya's financial performance, condition, and key business trends, covering consolidated and segment results, liquidity, capital, and accounting estimates - Voya is focused on higher-return, capital-light businesses, providing workplace benefits, savings solutions, and international asset management292293294 - On September 11, 2024, Voya announced an agreement to acquire the full-service retirement plan business of OneAmerica Financial, expected to close on January 1, 2025302 Results of Operations - Consolidated Q3 2024 total revenues increased by $133 million to $1.96 billion, driven by higher premiums and fee income, but increased expenses led to a $56 million decrease in pre-tax income Consolidated Results of Operations (in millions) | Metric | Q3 2024 | Q3 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $1,956 | $1,823 | $133 | | Total Benefits and Expenses | $1,840 | $1,651 | $189 | | Income (loss) before income taxes | $116 | $172 | $(56) | - Key drivers for the Q3 2024 revenue increase were higher premiums in Health Solutions and higher fee income in Wealth Solutions and Investment Management due to positive market performance312 Results of Operations - Segment by Segment Q3 2024 adjusted operating earnings saw Wealth Solutions increase to $211 million, Health Solutions decrease to $23 million, and Investment Management rise to $72 million Adjusted Operating Earnings Before Income Taxes by Segment (in millions) | Segment | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | | :--- | :--- | :--- | :--- | :--- | | Wealth Solutions | $211 | $179 | $611 | $485 | | Health Solutions | $23 | $53 | $142 | $271 | | Investment Management | $72 | $63 | $189 | $168 | | Corporate | $(60) | $(52) | $(178) | $(175) | Liquidity and Capital Resources As of September 30, 2024, Voya maintained strong capital with $0.4 billion in excess capital and a 395% RBC ratio, while increasing shareholder returns to $620 million - Estimated excess capital was approximately $0.4 billion as of September 30, 2024377 - The estimated combined RBC ratio was 395% as of September 30, 2024377 Capital Return to Shareholders (YTD 2024 vs YTD 2023, in millions) | Metric | YTD 2024 | YTD 2023 | | :--- | :--- | :--- | | Dividends paid on common shares | $125 | $83 | | Repurchases of common shares | $495 | $216 | | Total | $620 | $299 | - The Financial Leverage Ratio (excluding AOCI) temporarily increased to 30.6% at Q3 2024 from 27.8% at year-end 2023, due to pre-financing of a debt maturity405 Item 3. Quantitative and Qualitative Disclosures About Market Risk Voya is exposed to interest rate, equity market, and credit risks, with hypothetical scenarios showing fair value decreases from adverse shifts in interest rates or equity markets Interest Rate Risk Sensitivity (in millions) | Scenario | Potential Change in Fair Value | | :--- | :--- | | +100 bps Yield Curve Shift | $(1,716) on Fixed Maturities | | -100 bps Yield Curve Shift | $1,898 on Fixed Maturities | Equity Market Risk Sensitivity (in millions) | Scenario | Potential Change in Fair Value | | :--- | :--- | | +10% Equity Market Shock | $25 on Equity Securities | | -10% Equity Market Shock | $(25) on Equity Securities | Item 4. Controls and Procedures As of September 30, 2024, the CEO and CFO concluded that disclosure controls and procedures are effective, with no material changes to internal control over financial reporting - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of the end of the period470 - No material changes to internal control over financial reporting occurred during the quarter ended September 30, 2024471 PART II. OTHER INFORMATION Item 1. Legal Proceedings Voya is involved in various litigation and regulatory matters, with estimated reasonably possible losses up to approximately $100 million as of September 30, 2024 - The company is cooperating with a publicly reported, industry-wide SEC investigation regarding compliance with record-keeping requirements for business-related electronic communications on unapproved channels242 - As of September 30, 2024, the company estimates the aggregate range of reasonably possible losses from litigation and regulatory matters, in excess of accrued amounts, to be up to approximately $100 million244 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During Q3 2024, Voya repurchased approximately 2.1 million shares, with $382 million remaining under authorization and an additional $500 million authorized in October 2024 Share Repurchases for Q3 2024 | Period | Total Shares Purchased | Average Price Paid | | :--- | :--- | :--- | | July 2024 | 944,568 | $72.19 | | August 2024 | 49,147 | $70.70 | | September 2024 | 1,106,175 | $75.29 | | Total | 2,099,890 | $73.79 | - On October 31, 2024, the Board of Directors authorized an additional $500 million for share repurchases, with the program expiring on December 31, 2025475