COLUMBUS, Ga., Feb. 3,
2015 /PRNewswire/ -- Aflac Incorporated today reported its
fourth quarter results.
Reflecting the weaker yen/dollar exchange rate, total revenues
fell 4.9% to $5.5 billion during the
fourth quarter of 2014, compared with $5.8
billion in the fourth quarter of 2013. Net earnings were
$703 million, or $1.57 per diluted share, compared with
$675 million, or $1.45 per share, a year ago.
Net earnings in the fourth quarter of 2014 included after-tax
net realized investment gains of $83
million, or $.19 per diluted
share, compared with net after-tax gains of $6 million, or $.01
per diluted share, a year ago. After-tax realized investment gains
from securities transactions in the quarter were $28 million, or $.07 per diluted share. Hedging costs related to
certain dollar investments of Aflac Japan on an after-tax basis,
were $1 million in the quarter, or
nil per diluted share. Realized after-tax net investment gains from
other derivative and hedging activities in the quarter were
$56 million, or $.12 per diluted share. In addition, net
earnings included a gain of $39
million, or $.09 per diluted
share, from other and nonrecurring items.
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, but 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 are primarily used to hedge foreign exchange
and interest rate risk in the company's investment portfolio as
well as manage foreign exchange risk in certain notes payable and
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 such as profit repatriation and the Aflac Japan dollar
investment program, the company does not actually convert yen into
dollars. As a result, Aflac views foreign currency translation as a
financial reporting issue rather than 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
2014 was 114.44, or 12.2% weaker than the average rate of 100.54 in
the fourth quarter of 2013. For the full year, the average exchange
rate was 105.46, or 7.5% weaker than the rate of 97.54 a year ago.
Aflac Japan's growth rates in dollar terms for the fourth quarter
and the full year were suppressed as a result of the weaker
yen/dollar exchange rate.
Operating earnings in the fourth quarter were $581 million, compared with $651 million in the fourth quarter of 2013.
Operating earnings per diluted share decreased by 7.9% to
$1.29 in the quarter, compared with
$1.40 a year ago. The weaker
yen/dollar exchange rate decreased operating earnings per diluted
share by $.08 for the fourth quarter.
Excluding the impact from the weaker yen, operating earnings per
diluted share decreased 2.1%, due primarily to anticipated
increased spending in the fourth quarter.
Results for the full year of 2014 were also suppressed by the
weaker yen. Total revenues were down 5.1% to $22.7 billion, compared with $23.9 billion for the full year of 2013. Net
earnings were $3.0 billion, or
$6.50 per diluted share, compared
with $3.2 billion, or $6.76 per diluted share, for the full year of
2013. Operating earnings for the full year of 2014 were
$2.8 billion, or $6.16 per diluted share, compared with
$2.9 billion, or $6.18 per diluted share, in 2013. Excluding the
negative impact of $.26 per share
from the weaker yen, operating earnings per diluted share rose 3.9%
for the full year of 2014.
Total investments and cash at the end of December 2014 were $107.3
billion, compared with $114.7
billion at September 30,
2014.
In the fourth quarter, Aflac repurchased $510 million, or 8.6 million shares, of its
common stock. For the full year, the company purchased $1.2 billion, or 19.7 million of its shares. At
the end of December, the company had 29.6 million shares available
for purchase under its share repurchase authorizations.
Shareholders' equity was $18.7
billion, or $42.30 per share,
at December 31, 2014, compared with
$17.9 billion, or $39.63 per share, at September 30, 2014. Shareholders' equity at the
end of the fourth quarter included a net unrealized gain on
investment securities and derivatives of $4.7 billion, compared with a net unrealized gain
of $3.4 billion at the end of
September 2014. The annualized return
on average shareholders' equity in the fourth quarter was 15.4%. 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 16.3% for the
fourth quarter, or 18.9%, excluding the impact of the yen. For the
full year, operating return on average shareholders' equity,
excluding currency, was 22.6%.
AFLAC JAPAN
In yen terms, Aflac Japan's premium income, net of reinsurance,
increased .2% in the fourth quarter. Net investment income
increased 10.3%. Investment income growth was magnified by the
weaker yen/dollar exchange rate because approximately 48% of Aflac
Japan's fourth quarter investment income was dollar-denominated,
compared with 45% a year ago. Total revenues were up 1.7% in the
fourth quarter. The pretax operating profit margin increased in the
fourth quarter to 20.1% from 19.9% in the prior year. Pretax
operating earnings in yen increased 2.8% on a reported basis but
decreased 2.1% on a currency-neutral basis. For the
full year, premium income in yen increased .1%, and net investment
income rose 8.8%. Total revenues in yen were up 1.3%, and pretax
operating earnings in yen grew 3.1%. On a currency-neutral basis,
pretax operating earnings grew .3%.
Aflac Japan's growth rates in dollar terms for the fourth
quarter were suppressed as a result of the significantly weaker
yen/dollar exchange rate. Premium income decreased 12.0% to
$3.2 billion in the fourth quarter.
Net investment income decreased 3.2% to $643
million. Total revenues decreased 10.7% to $3.8 billion. Pretax operating earnings declined
9.7% to $770 million. For the full
year, premium income was $13.9
billion, or 7.5% lower than a year ago. Net investment
income increased .4% to $2.7 billion.
Total revenues were down 6.4% to $16.6
billion. Pretax operating earnings were $3.5 billion, or 4.7% lower than a year ago.
In the fourth quarter, total new annualized premium sales rose
1.5% to ¥33.4 billion, or $292
million. Third sector sales, which include cancer and
medical products, increased 28.5% in the quarter. Bank channel
sales decreased 37.6%, primarily reflecting continued declines in
sales of the company's first sector WAYS product.
For the full year, new annualized premium sales were down 23.3%
to ¥114.5 billion, or $1.1 billion.
Third sector sales increased 6.1% for the full year.
AFLAC U.S.
Aflac U.S. premium income increased 1.2% to $1.3 billion in the fourth quarter. Net
investment income was up 1.8% to $161
million. Total revenues increased 1.2% to $1.5 billion. The pretax operating profit margin
was 13.7%, compared with 14.2% a year ago. Pretax operating
earnings were $201 million, a
decrease of 2.2% for the quarter. For the full year, total revenues
were up 1.2% to $5.9 billion and
premium income rose 1.1% to $5.2
billion. Net investment income increased 2.1% to
$645 million. Pretax operating
earnings were $1.1 billion, 3.3%
higher than a year ago.
Aflac U.S. total new annualized premium sales increased 14.1% in
the quarter to $454 million. For the
full year, total new sales increased .7% to $1.4 billion.
DIVIDEND
The board of directors declared the first quarter cash dividend.
The first quarter dividend of $.39
per share is payable on March 2,
2015, to shareholders of record at the close of business on
February 17, 2015.
OUTLOOK
Commenting on the company's fourth quarter results, Chairman and
Chief Executive Officer Daniel P.
Amos stated: "We are extremely pleased with our sales in
Japan and the U.S. More
importantly, our 2014 operating earnings per diluted share growth
of 3.9% excluding currency was at the high end of our 3% to 4%
expectation.
"With 2014 marking Aflac Japan's 40th year of
operations, it is especially impressive that third sector sales
increased 28.5% in the fourth quarter, particularly in comparison
to strong third sector sales results that came in the fourth
quarter of the prior two years. Aflac Japan's third sector sales
growth for the year was 6.1%, which was at the high end of our
annual sales target. On the distribution side, our traditional
agencies have been, and remain, key to our success. I'm also
pleased that we continued to build on our partnership with Japan
Post throughout the year, expanding the number of postal outlets
and their agents selling our cancer products. Cancer insurance
sales through all distribution outlets were up an impressive 176%
for the quarter. As we look ahead to 2015, we believe that for the
first nine months, third sector sales will average a 15% increase.
With fourth quarter sales facing difficult comparisons, we believe
third sector sales in the final quarter of 2015 could be down
sharply. However, as always, we will be working to find ways to
minimize that decline. At the end of the second quarter, when we
have more insight, we will give additional guidance on the fourth
quarter.
"Turning to Aflac U.S., I am very pleased with our fourth
quarter sales results, which surpassed our expectations, increasing
14.1%. The strong fourth quarter sales drove annual sales results
to an increase of .7%, which significantly exceeded our most recent
sales expectation for the year. It is rewarding to see the changes
we made to our sales organization in 2014, both in the career agent
channel and the broker channel, yielded such promising results.
Although one quarter doesn't make a trend, I am very encouraged
with how far we've come in a short period of time. However, I am
not willing to say we've had a sales turnaround until I see first
half sales results in 2015. Saying that, I remain encouraged and
believe we should have a 3% to 7% increase in U.S. sales, with a
target of 5%.
"Although we have not yet finalized our statutory financial
statements, we estimate our 2014 risk-based capital ratio, or RBC,
remained very strong and will exceed the third quarter estimate.
Additionally, as a result of a significant decline in interest
rates that led to substantial unrealized gains in the investment
portfolio, Aflac Japan's solvency margin ratio, or SMR,
improved significantly, and we expect that it will be above
850%.
"We entered into a new reinsurance agreement on October 1, which released approximately ¥55
billion of Aflac Japan's regulatory reserves. Half of that
transaction was retroceded to an Aflac Incorporated subsidiary at
the end of the year.
"As we have said for many years, we believe that growing the
cash dividend and repurchasing our shares are the most attractive
means for deploying capital. In 2014, we repurchased $1.2 billion, or 19.7 million of our shares,
which is consistent with what we had communicated last October. We
currently plan to repurchase $1.3
billion of our shares in 2015. As we indicated last quarter,
we also increased the cash dividend 5.4%, effective with the fourth
quarter, marking the 32nd consecutive year in which
we've increased the cash dividend. Our objective is to grow the
dividend at a rate generally in line with the increase in operating
earnings before the impact of foreign currency translation.
"Once again, I was very pleased that we ended the year
with our operating earnings per share at the high end of our 2014
estimate, although that result creates a tougher comparison when we
look to 2015. Our objective remains to grow 2015 operating earnings
per diluted share before currency 2% to 7%. Because overall
financial markets are currently very challenging and interest rates
are at significantly depressed levels, it is difficult to invest
cash flows at attractive yields. Therefore, we will be very
disciplined in selling first sector products in Japan, which will reduce cash flows to
investments. I would also remind you that the progression of this
year's benefit ratios in both the U.S. and Japan, which have seen favorable trends, could
also have a significant impact on our results. As always, we are
working very hard to achieve our earnings-per-share objective while
also ensuring we deliver on our promise to policyholders."
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 at the
worksite. In Japan, Aflac insures
one in four households. Aflac individual and group insurance
products help provide protection to more than 50 million people
worldwide. For eight 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 2014, FORTUNE magazine included Aflac on its list of
Most Admired Companies for the 13th 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.
Aflac Incorporated will webcast its quarterly conference call
via the "Investors" page of aflac.com at 9:00 a.m. (EST) on Wednesday, February 4, 2015.
AFLAC INCORPORATED
AND SUBSIDIARIES CONDENSED INCOME STATEMENT
|
(UNAUDITED – IN
MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED
DECEMBER 31,
|
|
2014
|
|
|
2013
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
$
|
5,514
|
|
$
|
5,801
|
|
(4.9)
|
%
|
|
|
|
|
|
|
|
|
|
Benefits and
claims
|
|
3,069
|
|
|
3,396
|
|
(9.6)
|
|
|
|
|
|
|
|
|
|
|
Total acquisition and
operating expenses
|
|
1,370
|
|
|
1,377
|
|
(.4)
|
|
|
|
|
|
|
|
|
|
|
Earnings before
income taxes
|
|
1,075
|
|
|
1,028
|
|
4.4
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
372
|
|
|
353
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
703
|
|
$
|
675
|
|
4.2
|
%
|
|
|
|
|
|
|
|
|
|
Net earnings per
share – basic
|
$
|
1.57
|
|
$
|
1.46
|
|
7.5
|
%
|
|
|
|
|
|
|
|
|
|
Net earnings per
share – diluted
|
|
1.57
|
|
|
1.45
|
|
8.3
|
|
|
|
|
|
|
|
|
|
|
Shares used to
compute earnings per share (000):
|
|
|
|
|
|
|
|
|
|
Basic
|
446,370
|
|
462,058
|
|
(3.4)
|
%
|
|
Diluted
|
449,030
|
|
465,505
|
|
(3.5)
|
|
|
|
|
|
|
|
|
|
|
Dividends paid per
share
|
$
|
.39
|
|
$
|
.37
|
|
5.4
|
%
|
AFLAC INCORPORATED
AND SUBSIDIARIES CONDENSED INCOME STATEMENT
|
(UNAUDITED – IN
MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
TWELVE MONTHS
ENDED DECEMBER 31,
|
|
2014
|
|
|
2013
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
$
|
22,728
|
|
$
|
23,939
|
|
(5.1)
|
%
|
|
|
|
|
|
|
|
|
|
Benefits and
claims
|
|
12,937
|
|
|
13,813
|
|
(6.3)
|
|
|
|
|
|
|
|
|
|
|
Total acquisition and
operating expenses
|
|
5,300
|
|
|
5,310
|
|
(.2)
|
|
|
|
|
|
|
|
|
|
|
Earnings before
income taxes
|
|
4,491
|
|
|
4,816
|
|
(6.7)
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
1,540
|
|
|
1,658
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
2,951
|
|
$
|
3,158
|
|
(6.5)
|
%
|
|
|
|
|
|
|
|
|
|
Net earnings per
share – basic
|
$
|
6.54
|
|
$
|
6.80
|
|
(3.8)
|
%
|
|
|
|
|
|
|
|
|
|
Net earnings per
share – diluted
|
|
6.50
|
|
|
6.76
|
|
(3.8)
|
|
|
|
|
|
|
|
|
|
|
Shares used to
compute earnings per share (000):
|
|
|
|
|
|
|
|
|
|
Basic
|
451,204
|
|
464,502
|
|
(2.9)
|
%
|
|
Diluted
|
454,000
|
|
467,408
|
|
(2.9)
|
|
|
|
|
|
|
|
|
|
|
Dividends paid per
share
|
$
|
1.50
|
|
$
|
1.42
|
|
5.6
|
%
|
|
AFLAC INCORPORATED
AND SUBSIDIARIES CONDENSED BALANCE SHEET
(UNAUDITED – IN
MILLIONS, EXCEPT FOR SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
DECEMBER
31,
|
|
2014
|
|
|
2013
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments and
cash
|
$
|
107,341
|
|
$
|
108,459
|
|
(1.0)
|
%
|
|
|
|
|
|
|
|
|
|
Deferred policy
acquisition costs
|
|
8,273
|
|
|
8,798
|
|
(6.0)
|
|
|
|
|
|
|
|
|
|
|
Other
assets
|
|
4,153
|
|
|
4,050
|
|
2.5
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
$
|
119,767
|
|
$
|
121,307
|
|
(1.3)
|
%
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Policy
liabilities
|
$
|
83,933
|
|
$
|
89,402
|
|
(6.1)
|
%
|
|
|
|
|
|
|
|
|
|
Notes
payable
|
|
5,282
|
|
|
4,897
|
|
7.9
|
|
|
|
|
|
|
|
|
|
|
Other
liabilities
|
|
11,836
|
|
|
12,388
|
|
(4.5)
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
18,716
|
|
|
14,620
|
|
28.0
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
119,767
|
|
$
|
121,307
|
|
(1.3)
|
%
|
|
|
|
|
|
|
|
|
|
Shares outstanding at
end of period (000)
|
|
442,445
|
|
|
459,413
|
|
(3.7)
|
%
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
OPERATING EARNINGS TO NET EARNINGS
|
(UNAUDITED – IN
MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED DECEMBER 31,
|
|
2014
|
|
|
2013
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
Operating
earnings
|
$
|
581
|
|
$
|
651
|
|
(10.7)
|
%
|
|
|
|
|
|
|
|
|
|
Reconciling items,
net of tax:
|
|
|
|
|
|
|
|
|
Realized investment
gains (losses):
|
|
|
|
|
|
|
|
|
Securities transactions and
impairments
|
|
28
|
|
|
(97)
|
|
|
|
Hedge
costs related to
foreign
|
|
|
|
|
|
|
|
|
currency investments
|
|
(1)
|
|
|
(5)
|
|
|
|
Impact of other
derivative/hedging activities
|
|
56
|
|
|
108
|
|
|
|
Other and non-recurring income (loss)
|
|
39
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
703
|
|
$
|
675
|
|
4.2
|
%
|
|
|
|
|
|
|
|
|
|
Operating earnings
per diluted share
|
$
|
1.29
|
|
$
|
1.40
|
|
(7.9)
|
%
|
|
|
|
|
|
|
|
|
|
Reconciling items,
net of tax:
|
|
|
|
|
|
|
|
|
Realized investment gains
(losses):
|
|
|
|
|
|
|
|
|
Securities transactions and
impairments
|
|
.07
|
|
|
(.21)
|
|
|
|
Hedge costs related to
foreign
|
|
|
|
|
|
|
|
|
currency
investments
|
|
–
|
|
|
(.01)
|
|
|
|
Impact of other derivative/hedging activities
|
|
.12
|
|
|
.23
|
|
|
|
Other and
non-recurring income (loss)
|
|
.09
|
|
|
.04
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
diluted share
|
$
|
1.57
|
|
$
|
1.45
|
|
8.3
|
%
|
RECONCILIATION OF
OPERATING EARNINGS TO NET EARNINGS
|
(UNAUDITED – IN
MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
TWELVE MONTHS
ENDED DECEMBER 31,
|
|
2014
|
|
|
2013
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
Operating
earnings
|
$
|
2,797
|
|
$
|
2,887
|
|
(3.1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling items,
net of tax:
|
|
|
|
|
|
|
|
|
|
Realized investment
gains (losses):
|
|
|
|
|
|
|
|
|
|
Securities transactions and
impairments
|
|
119
|
|
|
41
|
|
|
|
|
Hedge
costs related to
foreign
|
|
|
|
|
|
|
|
|
|
currency investments
|
|
(24)
|
|
|
(17)
|
|
|
|
|
Impact of other
derivative/hedging activities
|
|
16
|
|
|
229
|
|
|
|
|
Other and non-recurring income (loss)
|
|
43
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
2,951
|
|
$
|
3,158
|
|
(6.5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings
per diluted share
|
$
|
6.16
|
|
$
|
6.18
|
|
(.3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling items,
net of tax:
|
|
|
|
|
|
|
|
|
|
Realized investment gains
(losses):
|
|
|
|
|
|
|
|
|
|
Securities transactions and
impairments
|
|
.26
|
|
|
.09
|
|
|
|
|
Hedge
costs related to
foreign
|
|
|
|
|
|
|
|
|
|
currency
investments
|
|
(.05)
|
|
|
(.04)
|
|
|
|
|
Impact of other derivative/hedging activities
|
|
.03
|
|
|
.49
|
|
|
|
|
Other and
non-recurring income (loss)
|
|
.10
|
|
|
.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
diluted share
|
$
|
6.50
|
|
$
|
6.76
|
|
(3.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
EFFECT OF FOREIGN
CURRENCY ON OPERATING RESULTS1
(SELECTED PERCENTAGE
CHANGES, UNAUDITED)
|
|
|
|
THREE MONTHS ENDED
DECEMBER 31, 2014
|
Including
Currency
Changes
|
Excluding
Currency
Changes2
|
|
|
|
Premium
income
|
(8.6)
|
%
|
.4
|
%
|
|
|
|
|
|
Net investment
income
|
(2.2)
|
|
3.4
|
|
|
|
|
|
|
Total benefits and
expenses
|
(7.0)
|
|
1.9
|
|
|
|
|
|
|
Operating
earnings
|
(10.7)
|
|
(5.1)
|
|
|
|
|
|
|
Operating earnings
per diluted share
|
(7.9)
|
|
(2.1)
|
|
|
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, 2014
|
Including
Currency
Changes
|
Excluding
Currency
Changes2
|
|
|
|
Premium
income
|
(5.3)
|
%
|
.4
|
%
|
|
|
|
|
|
Net investment
income
|
.8
|
|
4.4
|
|
|
|
|
|
|
Total benefits and
expenses
|
(4.6)
|
|
1.0
|
|
|
|
|
|
|
Operating
earnings
|
(3.1)
|
|
.9
|
|
|
|
|
|
|
Operating earnings
per diluted share
|
(.3)
|
|
3.9
|
|
|
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.
|
2015 OPERATING
EARNINGS PER SHARE SCENARIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Exchange
Rate
|
|
Annual
Operating
EPS
|
|
% Growth
Over 2014
|
|
Yen
Impact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
|
$
|
6.47
|
-
|
6.77
|
|
5.0
|
-
|
9.9%
|
|
$
|
.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
105.46*
|
|
|
6.29
|
-
|
6.59
|
|
2.1
|
-
|
7.0
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
115
|
|
|
6.01
|
-
|
6.31
|
|
(2.4)
|
-
|
2.4
|
|
|
(.28)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
125
|
|
|
5.77
|
-
|
6.07
|
|
(6.3)
|
-
|
(1.5)
|
|
|
(.52)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
135
|
|
|
5.56
|
-
|
5.86
|
|
(9.7)
|
-
|
(4.9)
|
|
|
(.73)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Actual 2014
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; exposure to
significant financial and capital markets risk; fluctuations in
foreign currency exchange rates; significant changes in investment
yield rates; 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; decline in creditworthiness of other
financial institutions; 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
telecommunication, 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; inability
to recognize tax benefits associated with capital loss
carryforwards; 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; ongoing changes in our industry;
events that damage our reputation; and failure of internal controls
or corporate governance policies and procedures.
Analyst and investor contact – Robin Y.
Wilkey, 706.596.3264 or 800.235.2667; FAX: 706.324.6330 or
rwilkey@aflac.com
Media contact – Catherine Blades,
706.596.3014; FAX: 706.320.2288 or cblades@aflac.com
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SOURCE Aflac Incorporated