COLUMBUS, Ga., Oct. 28, 2014 /PRNewswire/ -- Aflac
Incorporated (NYSE: AFL) today reported its third quarter
results.
Reflecting the weaker yen/dollar exchange rate, total revenues
fell 2.5% to $5.7 billion during the
third quarter of 2014, compared with $5.9
billion in the third quarter of 2013. Net earnings were
$706 million, or $1.56 per diluted share, compared with
$702 million, or $1.50 per share, a year ago.
Net earnings in the third quarter of 2014 included after-tax net
realized investment gains of $4
million, or $.01 per diluted
share, compared with net after-tax gains of $15 million, or $.03 per diluted share, a year ago. After-tax
realized investment gains from securities transactions in the
quarter were $21 million, or
$.05 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 losses from other derivative and hedging activities in
the quarter were $16 million, or
$.04 per diluted share. In
addition, net earnings included a gain of $17 million, or $.04 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 our 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 third quarter of
2014 was 103.92, or 4.8% weaker than the average rate of 98.93 in
the third quarter of 2013. For the first nine months, the average
exchange rate was 102.89, or 6.1% weaker than the rate of 96.61 a
year ago. Aflac Japan's growth rates in dollar terms for the third
quarter and first nine months were suppressed as a result of the
weaker yen/dollar exchange rate.
Operating earnings in the third quarter were $685 million, compared with $687 million in the third quarter of 2013.
Operating earnings per diluted share increased by 2.7% to
$1.51 in the quarter, compared with
$1.47 a year ago. The weaker
yen/dollar exchange rate decreased operating earnings per diluted
share by $.04 for the third quarter.
Excluding the impact from the weaker yen, operating earnings per
diluted share increased 5.4%.
Results for the first nine months of 2014 were also suppressed
by the weaker yen. Total revenues were down 5.1% to $17.2 billion, compared with $18.1 billion in the first nine months of 2013.
Net earnings were $2.2 billion, or
$4.93 per diluted share, compared
with $2.5 billion, or $5.31 per diluted share, for the first nine
months of 2013. Operating earnings for the first nine months of
2014 were $2.2 billion, or
$4.86 per diluted share, compared
with $2.2 billion, or $4.78 per diluted share, in 2013. Excluding the
negative impact of $.18 per share
from the weaker yen, operating earnings per diluted share rose 5.4%
for the first nine months of 2014.
Total investments and cash at the end of September 2014 were $114.7
billion, unchanged from June 30,
2014.
In the third quarter, Aflac repurchased $175 million, or 2.9 million shares, of its
common stock. For the first nine months of the year, the company
purchased $690 million, or 11.1
million of its shares. At the end of September, the company had
38.1 million shares available for purchase under its share
repurchase authorizations.
Shareholders' equity was $17.9
billion, or $39.63 per share,
at September 30, 2014, compared with
$17.6 billion, or $38.76 per share, at June
30, 2014. Shareholders' equity at the end of the third
quarter included a net unrealized gain on investment securities and
derivatives of $3.4 billion, compared
with a net unrealized gain of $2.9
billion at the end of June
2014. The annualized return on average shareholders' equity
in the third quarter was 15.9%. 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 18.8% for the third quarter of 2014, or
20.8%, excluding the impact of the yen.
AFLAC JAPAN
In yen terms, Aflac Japan's premium income fell .7% in the third
quarter. The decline in premium income has been influenced by the
impact of weak sales this year and in 2013 in addition to premiums
ceded in the 2013 reinsurance transaction. Excluding the impact of
the reinsurance transaction, premium income would have been up
approximately 1%. Net investment income increased 7.8%. Investment
income growth was magnified by the weaker yen/dollar exchange rate
because approximately 46% of Aflac Japan's third quarter investment
income was dollar-denominated, compared with 45% a year ago. Total
revenues were up .6% in the third quarter. The pretax operating
profit margin increased in the third quarter to 19.6% from 19.2% in
the prior year. Pretax operating earnings in yen increased 2.8% on
a reported basis and .9% on a currency-neutral
basis. For the first nine months of the year, premium
income in yen increased .1%, and net investment income rose 8.2%.
Total revenues in yen were up 1.2%, and pretax operating earnings
grew 3.1%.
Aflac Japan's growth rates in dollar terms for the third quarter
were suppressed as a result of the weaker yen/dollar exchange rate.
Premium income decreased 5.4% to $3.5
billion in the third quarter. Net investment income was up
2.7% to $676 million. Total revenues
decreased 4.2% to $4.2 billion.
Pretax operating earnings declined 2.1% to $828 million. For the first nine months, premium
income was $10.7 billion, or 6.0%
lower than a year ago. Net investment income increased 1.6% to
$2.0 billion. Total revenues were
down 5.0% to $12.7 billion. Pretax
operating earnings were $2.7 billion,
or 3.1% lower than a year ago.
In the third quarter, total new annualized premium sales fell
20.8% to ¥25.6 billion, or $247
million. Third sector sales, which include cancer and
medical products, decreased 12.6% in the quarter. Bank channel
sales declined 42.7%, primarily reflecting continued declines in
sales of the company's first sector WAYS product.
For the first nine months of the year, new annualized premium
sales were down 30.3% to ¥81.2 billion, or $789 million. Third sector sales decreased 2.8%
in the first nine months of the year.
AFLAC U.S.
Aflac U.S. premium income increased 1.1% to $1.3 billion in the third quarter. Net investment
income was up 1.6% to $162 million.
Total revenues increased 1.0% to $1.5
billion. The pretax operating profit margin decreased to
18.4% from 18.5% a year ago. Pretax operating earnings were
$269 million, an increase of .3% for
the quarter. For the first nine months, total revenues were up 1.2%
to $4.4 billion and premium income
rose 1.1% to $3.9 billion. Net
investment income increased 2.2% to $484
million. Pretax operating earnings were $872 million, 4.7% higher than a year ago.
Aflac U.S. total new annualized premium sales decreased .6% in
the quarter to $328 million. For the
first nine months of the year, total new sales declined 4.5% to
$979 million.
DIVIDEND
The board of directors announced a 5.4% increase in the fourth
quarter cash dividend. The fourth quarter dividend of $.39 per share is payable on December 1, 2014, to shareholders of record at
the close of business on November 19,
2014.
OUTLOOK
Commenting on the company's third quarter results, Chairman and
Chief Executive Officer Daniel P.
Amos stated: "We are pleased with our overall financial
results in the third quarter of 2014 and for the first nine months
of the year. Aflac Japan, our largest earnings contributor,
generated strong financial results for the quarter. During the
quarter, we successfully launched our "New Cancer DAYS" product
available for sale through all distribution channels in
Japan. Additionally, as expected,
we are continuing to make gradual but steady progress selling
through postal outlets. While it's early in the fourth quarter, we
anticipate our sales through Japan Post will benefit from the
October 1 introduction of our
exclusive new cancer product as well as the expansion of locations
selling our cancer product from 3,000 postal outlets to 10,000.
Although third sector sales this quarter were down as we
anticipated, we continue to believe full year sales for third
sector products will come in at the low end of our expectation of a
2% to 7% increase.
"From a financial perspective, Aflac U.S. also continued to
perform well in the third quarter. While we expected that changes
made to our sales organization could have resulted in short-term
disruption, we were instead pleased to see an improved trajectory
of U.S. sales, which were essentially flat in the quarter. However,
we want to see sustained sales growth before we view this as a
turnaround. To that end, we continue to work on initiatives
designed to empower our sales channels to grow our new business.
Given sales production in the first nine months of the year, we now
expect sales for the full year will likely be down 2% to down 4%,
which is an improved outlook since the release of our second
quarter results.
"We remain committed to maintaining strong capital ratios on
behalf of our policyholders and bondholders. Although we have not
yet finalized our statutory financial statements, we estimate our
third quarter 2014 risk-based capital, or RBC ratio, will exceed
775%. Additionally, we expect that Aflac Japan's estimated third
quarter solvency margin ratio, or SMR, will be above 750%. We are
currently exploring the possibility of increasing the frequency of
capital transfers from Japan to
the United States pending
completion of our internal governance process. As a result, we have
increased the provision for capital repatriation reflected in our
estimated September 30 SMR. It is
this increased provision that resulted in a lower estimated SMR at
the end of the third quarter compared with our ratio at
June 30, 2014.
"As part of our capital strategy, we entered into a reinsurance
agreement on October 1, which was
similar to the transaction we executed in September 2013. This transaction will release
approximately ¥55 billion of Aflac Japan's regulatory reserves. Our
capital strength gives us the confidence to increase our 2014 share
repurchase objective from $1 billion
to $1.2 billion of our common stock.
In addition, it is our current plan to repurchase $1.3 billion of our common stock in 2015. I am
also pleased with the action by the board of directors to increase
the quarterly cash dividend by 5.4%, effective with the fourth
quarter of 2014. This marks the 32nd consecutive year of
increasing our 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.
"As we've previously stated, we anticipate increased spending in
the fourth quarter related to our infrastructure in Japan and our sales force repositioning in
the United States. Taking these
factors into account, we continue to expect operating earnings per
diluted share will increase 3% to 4% for 2014, excluding the impact
of the yen. If we achieve that rate of growth and the yen averages
105 to 110 for the last three months of the year, we would expect
reported operating earnings for the fourth quarter to be in the
range of $1.28 to $1.37 per diluted
share. Under that same scenario, we would expect full year
operating earnings of $6.14 to $6.23
per diluted share.
"After assessing our business and opportunities for growth in
2015, we're establishing an objective of increasing operating
earnings per diluted share 2% to 7% on a currency neutral basis.
This range reflects the stability of our businesses in the United States and Japan, the continued opportunities we see for
sales growth in both markets and our ability to deploy capital for
the benefit of our shareholders."
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 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
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. (EDT) on Wednesday, October 29, 2014.
AFLAC INCORPORATED
AND SUBSIDIARIES CONDENSED INCOME STATEMENT
|
(UNAUDITED – IN
MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED
SEPTEMBER 30,
|
2014
|
|
2013
|
|
%
Change
|
|
|
|
|
|
|
|
|
Total
revenues
|
$
|
5,736
|
|
$
|
5,886
|
|
(2.5)%
|
|
|
|
|
|
|
|
|
Benefits and
claims
|
|
3,355
|
|
|
3,485
|
|
(3.7)
|
|
|
|
|
|
|
|
|
Total acquisition and
operating expenses
|
|
1,307
|
|
|
1,332
|
|
(1.9)
|
|
|
|
|
|
|
|
|
Earnings before
income taxes
|
|
1,074
|
|
|
1,069
|
|
.6
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
368
|
|
|
367
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
706
|
|
$
|
702
|
|
.5%
|
|
|
|
|
|
|
|
|
Net earnings per
share – basic
|
$
|
1.56
|
|
$
|
1.51
|
|
3.3%
|
|
|
|
|
|
|
|
|
Net earnings per
share – diluted
|
|
1.56
|
|
|
1.50
|
|
4.0
|
|
|
|
|
|
|
|
|
Shares used to
compute earnings per share (000):
|
|
|
|
|
|
|
|
|
Basic
|
451,246
|
|
464,324
|
|
(2.8)%
|
|
Diluted
|
453,981
|
|
467,391
|
|
(2.9)
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
NINE MONTHS ENDED
SEPTEMBER 30,
|
2014
|
|
2013
|
|
%
Change
|
|
|
|
|
|
|
|
|
Total
revenues
|
$
|
17,214
|
|
$
|
18,138
|
|
(5.1)%
|
|
|
|
|
|
|
|
|
Benefits and
claims
|
|
9,868
|
|
|
10,417
|
|
(5.3)
|
|
|
|
|
|
|
|
|
Total acquisition and
operating expenses
|
|
3,930
|
|
|
3,933
|
|
(.1)
|
|
|
|
|
|
|
|
|
Earnings before
income taxes
|
|
3,416
|
|
|
3,788
|
|
(9.8)
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
1,168
|
|
|
1,305
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
2,248
|
|
$
|
2,483
|
|
(9.5)%
|
|
|
|
|
|
|
|
|
Net earnings per
share – basic
|
$
|
4.96
|
|
$
|
5.34
|
|
(7.1)%
|
|
|
|
|
|
|
|
|
Net earnings per
share – diluted
|
|
4.93
|
|
|
5.31
|
|
(7.2)
|
|
|
|
|
|
|
|
|
Shares used to
compute earnings per share (000):
|
|
|
|
|
|
|
|
|
Basic
|
452,833
|
|
465,325
|
|
(2.7)%
|
|
Diluted
|
455,674
|
|
468,052
|
|
(2.6)
|
|
|
|
|
|
|
|
|
Dividends paid per
share
|
$
|
1.11
|
|
$
|
1.05
|
|
5.7%
|
|
AFLAC INCORPORATED
AND SUBSIDIARIES CONDENSED BALANCE SHEET
(UNAUDITED – IN
MILLIONS, EXCEPT FOR SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
SEPTEMBER
30,
|
2014
|
|
2013
|
|
%
Change
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments and
cash
|
$
|
114,691
|
|
$
|
106,712
|
|
7.5%
|
|
|
|
|
|
|
|
|
Deferred policy
acquisition costs
|
|
8,713
|
|
|
9,173
|
|
(5.0)
|
|
|
|
|
|
|
|
|
Other
assets
|
|
3,849
|
|
|
4,033
|
|
(4.6)
|
|
|
|
|
|
|
|
|
Total
assets
|
$
|
127,253
|
|
$
|
119,918
|
|
6.1%
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Policy
liabilities
|
$
|
90,200
|
|
$
|
93,937
|
|
(4.0)%
|
|
|
|
|
|
|
|
|
Notes
payable
|
|
4,558
|
|
|
4,953
|
|
(8.0)
|
|
|
|
|
|
|
|
|
Other
liabilities
|
|
14,642
|
|
|
6,370
|
|
129.9
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
17,853
|
|
|
14,658
|
|
21.8
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
127,253
|
|
$
|
119,918
|
|
6.1%
|
|
|
|
|
|
|
|
|
Shares outstanding at
end of period (000)
|
|
450,499
|
|
|
465,710
|
|
(3.3)%
|
|
RECONCILIATION OF
OPERATING EARNINGS TO NET EARNINGS (UNAUDITED – IN MILLIONS,
EXCEPT FOR PER-SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED SEPTEMBER 30,
|
2014
|
|
2013
|
|
%
Change
|
|
|
|
|
|
|
|
|
Operating
earnings
|
$
|
685
|
|
$
|
687
|
|
(.5)%
|
|
|
|
|
|
|
|
|
Reconciling items,
net of tax:
|
|
|
|
|
|
|
|
Realized investment
gains (losses):
|
|
|
|
|
|
|
|
Securities transactions and
impairments
|
|
21
|
|
|
41
|
|
|
Hedge costs
related to
foreign
|
|
|
|
|
|
|
|
currency investments
|
|
(1)
|
|
|
(4)
|
|
|
Impact of other
derivative/hedging activities
|
|
(16)
|
|
|
(22)
|
|
|
Other and non-recurring income (loss)
|
|
17
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
706
|
|
$
|
702
|
|
.5%
|
|
|
|
|
|
|
|
|
Operating earnings
per diluted share
|
$
|
1.51
|
|
$
|
1.47
|
|
2.7%
|
|
|
|
|
|
|
|
|
Reconciling items,
net of tax:
|
|
|
|
|
|
|
|
Realized investment gains
(losses):
|
|
|
|
|
|
|
|
Securities transactions and
impairments
|
|
.05
|
|
|
.09
|
|
|
Hedge
costs related to
foreign
|
|
|
|
|
|
|
|
currency
investments
|
|
–
|
|
|
(.01)
|
|
|
Impact of other derivative/hedging activities
|
|
(.04)
|
|
|
(.05)
|
|
|
Other and
non-recurring income (loss)
|
|
.04
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
diluted share
|
$
|
1.56
|
|
$
|
1.50
|
|
4.0%
|
RECONCILIATION OF
OPERATING EARNINGS TO NET EARNINGS
|
(UNAUDITED – IN
MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
NINE MONTHS
ENDED SEPTEMBER 30,
|
2014
|
|
2013
|
|
%
Change
|
|
|
|
|
|
|
|
|
Operating
earnings
|
$
|
2,216
|
|
$
|
2,236
|
|
(.9)%
|
|
|
|
|
|
|
|
|
Reconciling items,
net of tax:
|
|
|
|
|
|
|
|
Realized investment
gains (losses):
|
|
|
|
|
|
|
|
Securities transactions and
impairments
|
|
91
|
|
|
138
|
|
|
Hedge costs
related to
foreign
|
|
|
|
|
|
|
|
currency investments
|
|
(23)
|
|
|
(12)
|
|
|
Impact of other
derivative/hedging activities
|
|
(40)
|
|
|
121
|
|
|
Other and non-recurring income (loss)
|
|
4
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
2,248
|
|
$
|
2,483
|
|
(9.5)%
|
|
|
|
|
|
|
|
|
Operating earnings
per diluted share
|
$
|
4.86
|
|
$
|
4.78
|
|
1.7%
|
|
|
|
|
|
|
|
|
Reconciling items,
net of tax:
|
|
|
|
|
|
|
|
Realized investment gains
(losses):
|
|
|
|
|
|
|
|
Securities transactions and
impairments
|
|
.20
|
|
|
.30
|
|
|
Hedge
costs related to
foreign
|
|
|
|
|
|
|
|
currency
investments
|
|
(.05)
|
|
|
(.03)
|
|
|
Impact of other derivative/hedging activities
|
|
(.09)
|
|
|
.26
|
|
|
Other and
non-recurring income (loss)
|
|
.01
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
diluted share
|
$
|
4.93
|
|
$
|
5.31
|
|
(7.2)%
|
|
|
|
|
|
|
|
|
|
EFFECT OF FOREIGN
CURRENCY ON OPERATING RESULTS1
(SELECTED PERCENTAGE
CHANGES, UNAUDITED)
|
|
THREE MONTHS ENDED
SEPTEMBER 30, 2014
|
Including
Currency
Changes
|
|
Excluding
Currency
Changes2
|
|
|
|
|
Premium
income
|
(3.7)%
|
|
–%
|
|
|
|
|
Net investment
income
|
2.4
|
|
4.7
|
|
|
|
|
Total benefits and
expenses
|
(3.2)
|
|
.5
|
|
|
|
|
Operating
earnings
|
(.5)
|
|
2.2
|
|
|
|
|
Operating earnings
per diluted share
|
2.7
|
|
5.4
|
|
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)
|
|
|
|
NINE MONTHS ENDED
SEPTEMBER 30, 2014
|
Including
Currency
Changes
|
|
Excluding
Currency
Changes2
|
|
|
|
|
Premium
income
|
(4.2)%
|
|
.4%
|
|
|
|
|
Net investment
income
|
1.8
|
|
4.7
|
|
|
|
|
Total benefits and
expenses
|
(3.9)
|
|
.7
|
|
|
|
|
Operating
earnings
|
(.9)
|
|
2.7
|
|
|
|
|
Operating earnings
per diluted share
|
1.7
|
|
5.4
|
|
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; 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