COLUMBUS, Ga., Feb. 4, 2014 /PRNewswire/ -- Aflac
Incorporated today reported its fourth quarter results.
Reflecting the weaker yen/dollar exchange rate, total revenues
fell 9.0% to $5.8 billion during the
fourth quarter of 2013, compared with $6.4
billion in the fourth quarter of 2012. Net earnings were
$675 million, or $1.45 per diluted share, compared with
$581 million, or $1.24 per share, a year ago.
Net earnings in the fourth quarter of 2013 included after-tax
net realized investment gains of $6
million, or $.01 per diluted
share, compared with net after-tax losses of $111 million, or $.23 per diluted share, a year ago. After-tax
realized investment losses from securities transactions in the
quarter were $9 million, or
$.02 per diluted share. On an
after-tax basis, impairments were $88
million in the quarter, or $.19 per diluted share. On an after-tax basis,
hedging costs related to certain dollar investments of Aflac Japan
were $5 million in the quarter, or
$.01 per diluted share. Realized
after-tax net investment gains from other derivative and hedging
activities in the quarter were $108
million, or $.23 per diluted
share. In addition, net earnings benefited from other and
nonrecurring items of $18 million, or
$.04 per diluted share.
Aflac believes that an analysis of operating earnings, a
non-GAAP financial measure, is vitally important to an
understanding of the company's underlying profitability drivers.
Aflac defines operating earnings as the profits derived from
operations, inclusive of interest cash flows associated with notes
payable, before realized investment gains and losses from
securities transactions, impairments, and derivative and hedging
activities, as well as other and nonrecurring items. Aflac's
derivative activities primarily include: foreign currency, interest
rate and credit default swaps in variable interest entities that
are consolidated; foreign currency swaps associated with certain
senior notes and the company's subordinated debentures; foreign
currency forwards used in hedging foreign exchange risk and
interest rate swaptions used in hedging interest rate risk on U.S.
dollar-denominated securities in Aflac Japan's portfolio; and
foreign currency forwards and options used to hedge certain
portions of forecasted cash flows denominated in yen. Management
uses operating earnings to evaluate the financial performance of
Aflac's insurance operations because realized gains and losses from
securities transactions, impairments, and derivative and hedging
activities, as well as other and nonrecurring items, tend to be
driven by general economic conditions and events or related to
infrequent activities not directly associated with the company's
insurance operations, and therefore may obscure the underlying
fundamentals and trends in Aflac's insurance operations.
Furthermore, because a significant portion of Aflac's business
is in Japan, where the functional
currency is the yen, the company believes it is equally important
to understand the impact on operating earnings from translating yen
into dollars. Aflac Japan's yen-denominated income statement is
translated from yen into dollars using an average exchange rate for
the reporting period, and the balance sheet is translated using the
exchange rate at the end of the period. However, except for certain
transactions that include the Aflac Japan dollar investment
program, the company does not actually convert yen into dollars. As
a result, Aflac views foreign currency as a financial reporting
issue and not as an economic event for the company or its
shareholders. Because changes in exchange rates distort the growth
rates of operations, readers of Aflac's financial statements are
also encouraged to evaluate financial performance excluding the
impact of foreign currency translation. The chart toward the end of
this release presents a comparison of selected income statement
items with and without foreign currency changes to illustrate the
effect of currency.
The average yen/dollar exchange rate in the fourth quarter of
2013 was 100.54, or 19.5% weaker than the average rate of 80.93 in
the fourth quarter of 2012. Operating earnings in the fourth
quarter were $651 million, compared
with $697 million in the fourth
quarter of 2012. Operating earnings per diluted share in the
quarter declined from $1.48 a year
ago to $1.40. The weaker yen/dollar
exchange rate decreased operating earnings per diluted share by
$.18 for the fourth quarter.
Excluding the impact from the weaker yen, operating earnings per
diluted share increased 6.8%.
Results for the full year were also suppressed because the yen
weakened by 18.2% to 97.54, from 79.81 a year ago. Total revenues
were down 5.6% to $23.9 billion,
compared with $25.4 billion a year
ago. Net earnings were $3.2 billion,
or $6.76 per diluted share, compared
with $2.9 billion, or $6.11 per diluted share, in 2012. Operating
earnings for the full year were $2.9
billion, or $6.18 per diluted
share, compared with $3.1 billion, or
$6.60 per diluted share, in 2012.
Excluding the negative impact of $.76
per share from the weaker yen, operating earnings per diluted share
rose 5.2% for the year.
Total investments and cash at the end of December 2013 were $108.5
billion, compared with $106.7
billion at September 30,
2013.
In the fourth quarter, Aflac repurchased $502 million, or 7.6 million shares, of its
common stock. For the full year, the company purchased $800 million, or 13.2 million of its shares. At
the end of December, the company had 49.2 million shares available
for purchase under its share repurchase authorizations.
Shareholders' equity was $14.6
billion, or $31.82 per share,
at December 31, 2013, compared with
$14.7 billion, or $31.47 per share, at September 30, 2013. Shareholders' equity at the
end of the fourth quarter included a net unrealized gain on
investment securities and derivatives of $1.0 billion, compared with a net unrealized gain
of $135 million at the end of
September 2013. The annualized return
on average shareholders' equity in the fourth quarter was 18.4%. On
an operating basis (excluding total net realized investment
gains/losses in net earnings, unrealized investment gains/losses,
and derivative gains/losses in shareholders' equity), the
annualized return on average shareholders' equity was 18.5% for the
fourth quarter, or 22.4%, excluding the impact of the yen.
AFLAC JAPAN
In yen terms, Aflac Japan's premium income rose 2.3% in the
fourth quarter. Net investment income increased 15.7%. Investment
income growth was magnified by the weaker yen/dollar exchange rate
because approximately 45% of Aflac Japan's fourth quarter
investment income was dollar-denominated, compared with 34% a year
ago. Total revenues were up 4.1% in the fourth quarter. The pretax
operating profit margin increased in the fourth quarter to 19.9%
from 17.7% in the prior year. Pretax operating earnings in yen
increased 16.9%. For the year, premium income in yen increased
6.8%, and net investment income rose 13.9%. Total revenues in yen
were up 7.8%, and pretax operating earnings grew
13.6%.
Aflac Japan's growth rates in dollar terms for the fourth
quarter and full year were suppressed as a result of the weaker
yen/dollar exchange rate. Premium income decreased 17.3% to
$3.6 billion in the fourth quarter.
Net investment income was down 6.5% to $665
million. Total revenues decreased 15.9% to $4.3 billion. Pretax operating earnings declined
5.9% to $853 million. For the year,
premium income was $15.0 billion, or
12.7% lower than a year ago. Net investment income fell 6.8% to
$2.7 billion. Total revenues were
down 11.8% to $17.7 billion. Pretax
operating earnings were $3.6 billion,
or 7.1% lower than a year ago.
In the fourth quarter, total new annualized premium sales fell
33.3% to ¥32.9 billion, or $327
million. Third sector sales, which include cancer and
medical products, increased 15.7% in the quarter. As expected,
sales of the first sector WAYS product declined sharply in the
fourth quarter, leading to a 59.5% decrease in bank channel
sales.
For the full year, new annualized premium sales were down 29.1%
to ¥149.3 billion, or $1.5 billion,
and third sector sales increased 4.0%.
AFLAC U.S.
Aflac U.S. premium income increased 2.0% to $1.3 billion in the fourth quarter. Net
investment income was up 2.0% to $159
million. Total revenues increased 1.4% to $1.4 billion. The pretax operating profit margin
decreased to 14.2% from 14.6% a year ago, reflecting a higher
benefit ratio, which was partially offset by improvement in the
expense ratio. Pretax operating earnings were $205 million, a decrease of 1.3% for the quarter.
For the year, total revenues were up 2.9% to $5.8 billion, and premium income rose 3.1% to
$5.2 billion. Net investment income
increased 3.2% to $632 million.
Pretax operating earnings were $1.0
billion, 4.1% higher than a year
ago.
Aflac U.S. total new annualized premium sales decreased 10.4% in
the quarter to $397 million.
Additionally, persistency in the quarter was 76.8%, compared with
77.1% a year ago. For the year, total new sales declined 4.3% to
$1.4 billion.
DIVIDEND
The board of directors declared the first quarter cash dividend.
The first quarter dividend of $.37
per share is payable on March 3,
2014, to shareholders of record at the close of business on
February 14, 2014.
OUTLOOK
Commenting on the company's fourth quarter and full year
results, Chairman and Chief Executive Officer Daniel P. Amos stated: "We are very pleased with
Aflac's financial performance for both the quarter and year. As the
year progressed, operating earnings per diluted share were better
than expected, and we finished the year slightly ahead of our
expectation for operating earnings to increase 5%, excluding the
impact of the yen.
"Aflac Japan produced solid results for both the quarter and the
year. Sales of our third sector products were at the high end of
our sales target range in 2013, primarily reflecting a positive
response to our EVER medical product and the advertising we created
to promote it. Consistent with our expectations, Aflac Japan's new
annualized premium sales in the fourth quarter and for the year
were down significantly following the repricing of first sector
products in April. However, we remain pleased with our expanded
distribution system. Our agreement with Japan Post Holdings, which
was announced in July 2013, further
demonstrates the overall strength of the Aflac brand, our
reputation for quality customer service, and the value our products
provide.
"From a financial perspective, Aflac U.S. continued to perform
well for the quarter and for the full year. However, we remain
disappointed with sales growth in the
United States. With more than 90% of our accounts coming
through the small business market, continued low levels of optimism
have prompted small employers to remain guarded in their hiring
outlook, which limits our universe of potential new policyholders.
Additionally, ongoing uncertainties around health care reform
implementation have prompted many businesses and consumers to defer
decisions related to health care coverage. However, we believe the
need for our products remains very strong and we continue to work
on helping our distribution reach more employers, both small and
large. At the same time, we seek opportunities to leverage our
strong brand and relevant product portfolio in the evolving health
care environment.
"Overall, we were pleased with our investment results in 2013,
especially in light of the low-yield environment in both
Japan and the U.S. We
position ourselves first to ensure we meet our policyholder
obligations. We then seek to achieve a high degree of confidence in
allocating capital to our shareholders while also pursuing
investment strategies that enhance our overall income growth. As
anticipated, our decision to allocate more of our investment
portfolio to JGBs in the second half of 2013 suppressed our new
money yields. However, our average new money yield of 2.47% was
slightly higher than our 2012 results. Based on our current capital
position and market outlook, we have resumed purchasing U.S. dollar
securities for Aflac Japan's portfolio within ranges consistent
with our strategic asset allocation plans and product needs.
We will continue to evaluate the allocation strategy based on
investment market dynamics and capital, making tactical changes
consistent with our outlook.
"We remain committed to maintaining strong capital ratios on
behalf of our policyholders and bondholders. We had conveyed that
our goal was to end 2013 with a risk-based capital (RBC) ratio in
the range of 500% to 600%. Although we have not yet finalized our
statutory financial statements, we estimate our 2013 RBC ratio will
exceed 750%. Additionally, we expect that Aflac Japan's estimated
solvency margin ratio (SMR) at year-end also exceeded 750%, which
is an improvement over the SMR at September
30, 2013, of 732% and is well above our objective for
2013.
"As we have said for many years, when it comes to deploying
capital, we still believe that growing the cash dividend and
repurchasing our shares are the most attractive means, and those
are avenues we will continue to pursue. In 2013, we repurchased
$800 million, or 13.2 million of our
shares, which is consistent with what we had communicated.
Additionally, as we indicated last quarter, we increased the cash
dividend 5.7%, effective with the fourth quarter. This marks the
31st consecutive year in which we've increased the cash
dividend.
"As we look ahead to 2014 sales opportunities, we expect Aflac
U.S. sales to be flat to up 5%. We expect Aflac Japan sales of
third sector cancer and medical products to be up 2% to 7%.
"I want to reiterate that our primary financial objective for
2014 is to increase operating earnings per diluted share 2% to 5%
on a currency neutral basis. As we communicated last quarter, our
2014 EPS will benefit significantly from increased share repurchase
activities, but will also be challenged by several headwinds. Those
include a difficult low-interest-rate environment in Japan, sizeable expenditures in both
Japan and the U.S. to enhance our
operational infrastructure, and an increase in Japan's consumption tax, rising from 5% to 8%
starting in April 2014. It is
important to note that absent certain headwinds and tailwinds, our
2014 EPS growth rate objective would have been comparable with our
2013 EPS growth rate. As we look to the future, we anticipate the
headwinds we face in 2014 will diminish significantly in 2015. We
continue to believe we are well-positioned in the two best
insurance markets in the world."
ABOUT AFLAC
When a policyholder gets sick or hurt, Aflac pays cash benefits
fast. For nearly six decades, Aflac insurance policies have given
policyholders the opportunity to focus on recovery, not financial
stress. In the United States,
Aflac is the leading provider of voluntary insurance. In
Japan, Aflac is the number one
life insurance company in terms of individual policies in force.
Aflac individual and group insurance products help provide
protection to more than 50 million people worldwide. For seven
consecutive years, Aflac has been recognized by Ethisphere magazine
as one of the World's Most Ethical Companies. In 2014, FORTUNE
magazine recognized Aflac as one of the 100 Best Companies to Work
For in America for the 16th consecutive year. Also, in 2013,
FORTUNE magazine included Aflac on its list of Most Admired
Companies for the 12th time, ranking the company number one in the
life and health insurance category. Aflac Incorporated is a Fortune
500 company listed on the New York Stock Exchange under the symbol
AFL. To find out more about Aflac, visit aflac.com or
espanol.aflac.com.
A copy of Aflac's Financial Analysts Briefing (FAB) supplement
for the quarter can be found on the "Investors" page at aflac.com,
as well as a complete listing of Aflac's investment holdings in the
financial sector that includes separate listings of the company's
sovereign and financial investments in both perpetual and
peripheral Eurozone securities.
Aflac Incorporated will webcast its quarterly conference call
via the "Investors" page of aflac.com at 9:00 a.m. (EDT) on Wednesday, February 5, 2014.
AFLAC INCORPORATED
AND SUBSIDIARIES CONDENSED INCOME STATEMENT
|
(UNAUDITED – IN
MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED
DECEMBER 31,
|
|
2013
|
|
|
2012
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
$
|
5,801
|
|
$
|
6,375
|
|
(9.0)
|
%
|
|
|
|
|
|
|
|
|
|
Benefits and
claims
|
|
3,396
|
|
|
3,989
|
|
(14.9)
|
|
|
|
|
|
|
|
|
|
|
Total acquisition and
operating expenses
|
|
1,377
|
|
|
1,506
|
|
(8.6)
|
|
|
|
|
|
|
|
|
|
|
Earnings before
income taxes
|
|
1,028
|
|
|
880
|
|
16.9
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
353
|
|
|
299
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
675
|
|
$
|
581
|
|
16.1
|
%
|
|
|
|
|
|
|
|
|
|
Net earnings per
share – basic
|
$
|
1.46
|
|
$
|
1.24
|
|
17.7
|
%
|
|
|
|
|
|
|
|
|
|
Net earnings per
share – diluted
|
|
1.45
|
|
|
1.24
|
|
16.9
|
|
|
|
|
|
|
|
|
|
|
Shares used to
compute earnings per share (000):
|
|
|
|
|
|
|
|
|
|
Basic
|
462,058
|
|
467,364
|
|
(1.1)
|
%
|
|
Diluted
|
465,505
|
|
470,291
|
|
(1.0)
|
|
|
|
|
|
|
|
|
|
|
Dividends paid per
share
|
$
|
.37
|
|
$
|
.35
|
|
5.7
|
%
|
|
|
|
|
AFLAC INCORPORATED
AND SUBSIDIARIES CONDENSED INCOME STATEMENT
|
|
(UNAUDITED – IN
MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
|
|
TWELVE MONTHS
ENDED DECEMBER 31,
|
|
2013
|
|
|
2012
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
$
|
23,939
|
|
$
|
25,364
|
|
(5.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and
claims
|
|
13,813
|
|
|
15,330
|
|
(9.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition and
operating expenses
|
|
5,310
|
|
|
5,732
|
|
(7.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before
income taxes
|
|
4,816
|
|
|
4,302
|
|
11.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
1,658
|
|
|
1,436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
3,158
|
|
$
|
2,866
|
|
10.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
share – basic
|
$
|
6.80
|
|
$
|
6.14
|
|
10.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
share – diluted
|
|
6.76
|
|
|
6.11
|
|
10.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to
compute earnings per share (000):
|
|
|
|
|
|
|
|
|
|
|
Basic
|
464,502
|
|
466,868
|
|
(.5)
|
%
|
|
|
Diluted
|
467,408
|
|
469,287
|
|
(.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid per
share
|
$
|
1.42
|
|
$
|
1.34
|
|
6.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFLAC INCORPORATED
AND SUBSIDIARIES CONDENSED BALANCE SHEET
|
(UNAUDITED – IN
MILLIONS, EXCEPT FOR SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
DECEMBER
31,
|
|
2013
|
|
|
2012
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments and
cash
|
$
|
108,459
|
|
$
|
118,219
|
|
(8.3)
|
%
|
|
|
|
|
|
|
|
|
|
Deferred policy
acquisition costs
|
|
8,798
|
|
|
9,658
|
|
(8.9)
|
|
|
|
|
|
|
|
|
|
|
Other
assets
|
|
4,050
|
|
|
3,217
|
|
25.9
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
$
|
121,307
|
|
$
|
131,094
|
|
(7.5)
|
%
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Policy
liabilities
|
$
|
89,402
|
|
$
|
97,720
|
|
(8.5)
|
%
|
|
|
|
|
|
|
|
|
|
Notes
payable
|
|
4,897
|
|
|
4,352
|
|
12.5
|
|
|
|
|
|
|
|
|
|
|
Other
liabilities
|
|
12,388
|
|
|
13,044
|
|
(5.0)
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
14,620
|
|
|
15,978
|
|
(8.5)
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
121,307
|
|
$
|
131,094
|
|
(7.5)
|
%
|
|
|
|
|
|
|
|
|
|
Shares outstanding at
end of period (000)
|
|
459,413
|
|
|
467,786
|
|
(1.8)
|
%
|
|
|
RECONCILIATION OF
OPERATING EARNINGS TO NET EARNINGS
|
|
(UNAUDITED – IN
MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED
DECEMBER 31,
|
|
2013
|
|
|
2012
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
Operating
earnings
|
$
|
651
|
|
$
|
697
|
|
(6.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling items,
net of tax:
|
|
|
|
|
|
|
|
|
|
Realized investment
gains (losses):
|
|
|
|
|
|
|
|
|
|
Securities transactions and
impairments
|
|
(97)
|
|
|
(141)
|
|
|
|
|
Hedge costs
related to
foreign
|
|
|
|
|
|
|
|
|
|
currency investments
|
|
(5)
|
|
|
(3)
|
|
|
|
|
Impact of other
derivative/hedging activities
|
|
108
|
|
|
33
|
|
|
|
|
Other and non-recurring income (loss)
|
|
18
|
|
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
675
|
|
$
|
581
|
|
16.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings
per diluted share
|
$
|
1.40
|
|
$
|
1.48
|
|
(5.4)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling items,
net of tax:
|
|
|
|
|
|
|
|
|
|
Realized investment gains
(losses):
|
|
|
|
|
|
|
|
|
|
Securities transactions and
impairments
|
|
(.21)
|
|
|
(.29)
|
|
|
|
|
Hedge
costs related to
foreign
|
|
|
|
|
|
|
|
|
|
currency
investments
|
|
(.01)
|
|
|
(.01)
|
|
|
|
|
Impact of other derivative/hedging activities
|
|
.23
|
|
|
.07
|
|
|
|
|
Other and non-recurring
income (loss)
|
|
.04
|
|
|
(.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
diluted share
|
$
|
1.45
|
|
$
|
1.24
|
|
16.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
OPERATING EARNINGS TO NET EARNINGS
|
|
(UNAUDITED – IN
MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
TWELVE MONTHS
ENDED DECEMBER 31,
|
|
2013
|
|
|
2012
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
Operating
earnings
|
$
|
2,887
|
|
$
|
3,097
|
|
(6.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling items,
net of tax:
|
|
|
|
|
|
|
|
|
|
Realized investment
gains (losses):
|
|
|
|
|
|
|
|
|
|
Securities transactions and
impairments
|
|
41
|
|
|
(326)
|
|
|
|
|
Hedge costs
related to
foreign
|
|
|
|
|
|
|
|
|
|
currency investments
|
|
(17)
|
|
|
(5)
|
|
|
|
|
Impact of other
derivative/hedging activities
|
|
229
|
|
|
105
|
|
|
|
|
Other and non-recurring
income (loss)
|
|
18
|
|
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
3,158
|
|
$
|
2,866
|
|
10.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings
per diluted share
|
$
|
6.18
|
|
$
|
6.60
|
|
(6.4)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling items,
net of tax:
|
|
|
|
|
|
|
|
|
|
Realized investment gains
(losses):
|
|
|
|
|
|
|
|
|
|
Securities transactions and
impairments
|
|
.09
|
|
|
(.69)
|
|
|
|
|
Hedge
costs related to
foreign
|
|
|
|
|
|
|
|
|
|
currency
investments
|
|
(.04)
|
|
|
(.01)
|
|
|
|
|
Impact of other derivative/hedging activities
|
|
.49
|
|
|
.22
|
|
|
|
|
Other and
non-recurring income (loss)
|
|
.04
|
|
|
(.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
diluted share
|
$
|
6.76
|
|
$
|
6.11
|
|
10.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EFFECT OF FOREIGN
CURRENCY ON OPERATING RESULTS1
|
(SELECTED PERCENTAGE
CHANGES, UNAUDITED)
|
|
|
|
THREE MONTHS
ENDED DECEMBER 31, 2013
|
Including
Currency
Changes
|
Excluding
Currency
Changes2
|
|
|
|
Premium
income
|
(13.0)
|
%
|
2.5
|
%
|
|
|
|
|
|
Net investment
income
|
(5.7)
|
|
4.4
|
|
|
|
|
|
|
Total benefits and
expenses
|
(13.1)
|
|
2.0
|
|
|
|
|
|
|
Operating
earnings
|
(6.8)
|
|
5.4
|
|
|
|
|
|
|
Operating earnings
per diluted share
|
(5.4)
|
|
6.8
|
|
|
1 The
numbers in this table are presented on an operating basis, as
previously described.
|
2 Amounts
excluding currency changes were determined using the same
yen/dollar exchange rate for the current period as the comparable
period in the prior year.
|
|
|
EFFECT OF FOREIGN
CURRENCY ON OPERATING RESULTS1
|
(SELECTED PERCENTAGE
CHANGES, UNAUDITED)
|
|
|
|
TWELVE MONTHS
ENDED DECEMBER 31, 2013
|
Including
Currency
Changes
|
Excluding
Currency
Changes2
|
|
|
|
Premium
income
|
(9.1)
|
%
|
5.9
|
%
|
|
|
|
|
|
Net investment
income
|
(5.2)
|
|
4.4
|
|
|
|
|
|
|
Total benefits and
expenses
|
(9.2)
|
|
5.6
|
|
|
|
|
|
|
Operating
earnings
|
(6.8)
|
|
4.7
|
|
|
|
|
|
|
Operating earnings
per diluted share
|
(6.4)
|
|
5.2
|
|
|
1 The
numbers in this table are presented on an operating basis, as
previously described.
|
2 Amounts
excluding currency changes were determined using the same
yen/dollar exchange rate for the current period as the comparable
period in the prior year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 OPERATING
EARNINGS PER SHARE SCENARIOS
|
|
|
|
|
|
|
|
|
|
|
Average
Exchange
Rate
|
|
Annual
Operating
EPS
|
|
% Growth
Over 2013
|
|
Yen
Impact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
95
|
|
|
$
|
6.40
|
-
|
6.58
|
3.6
|
-
|
6.5%
|
|
$
.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
97.54*
|
|
|
|
6.31
|
-
|
6.49
|
|
2.1
|
-
|
5.0
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
|
|
|
6.22
|
-
|
6.40
|
|
.6
|
-
|
3.6
|
|
(.09)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
105
|
|
|
|
6.06
|
-
|
6.24
|
|
(1.9)
|
-
|
1.0
|
|
(.25)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
110
|
|
|
|
5.91
|
-
|
6.09
|
|
(4.4)
|
-
|
(1.5)
|
|
(.40)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Actual 2013
weighted-average exchange rate
|
|
|
|
|
|
|
|
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. We desire 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" 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. We caution
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; governmental actions for the purpose of stabilizing the
financial markets; defaults and credit downgrades of securities in
our investment portfolio; impairment of financial institutions;
credit and other risks associated with Aflac's investment in
perpetual securities; differing judgments applied to investment
valuations; significant valuation judgments in determination of
amount of impairments taken on our investments; limited
availability of acceptable yen-denominated investments;
concentration of our investments in any particular single-issuer or
sector; concentration of business in Japan; increased derivative activities;
ongoing changes in our industry; exposure to significant financial
and capital markets risk; fluctuations in foreign currency exchange
rates; significant changes in investment yield rates; deviations in
actual experience from pricing and reserving assumptions;
subsidiaries' ability to pay dividends to Aflac Incorporated;
changes in law or regulation by governmental authorities; ability
to attract and retain qualified sales associates and
employees; decreases in our financial strength or
debt ratings; ability to continue to develop and implement
improvements in information technology systems; interruption in
telecommunications, information technology, and other operational
systems, or a failure to maintain the security, confidentiality or
privacy of sensitive data residing on such systems; changes in U.S.
and/or Japanese accounting standards; failure to comply with
restrictions on patient privacy and information security; level and
outcome of litigation; ability to effectively manage key executive
succession; catastrophic events including, but not necessarily
limited to, epidemics, pandemics, tornadoes, hurricanes,
earthquakes, tsunamis, acts of terrorism and damage incidental to
such events; and failure of internal controls or corporate
governance policies and procedures.
(Logo: http://photos.prnewswire.com/prnh/20100423/CL92305LOGO
)
Analyst and investor contact – Robin Y.
Wilkey, 706.596.3264 or 800.235.2667, FAX: 706.324.6330 or
rwilkey@aflac.com
Media contact – Laura Kane,
706.593.0786, FAX: 706.320.2288, or lkane@aflac.com
SOURCE Aflac Incorporated