COLUMBUS, Ga., April 29,
2020 /PRNewswire/ -- Aflac Incorporated (NYSE: AFL) today
reported its first quarter results.
Total revenues were $5.2 billion
during the first quarter of 2020, compared with $5.7 billion in the first quarter of 2019. Net
earnings were $566 million, or
$0.78 per diluted share, compared
with $928 million, or $1.23 per diluted share a year ago. The declines
in total revenues and net earnings in the first quarter of 2020
were both driven primarily by an increase in net investment
losses.
Net earnings in the first quarter of 2020 included pretax net
investment losses of $448 million, or
$0.62 per diluted share, compared
with pretax net investment gains of $103
million, or $0.14 per diluted
share a year ago. The net investment losses were driven by multiple
factors, including: a decrease in the fair value of equity
securities of $149 million;
losses from certain derivatives and foreign currency
activities of $146 million; credit
losses of $145 million, of which
$65 million resulted from application
of the new Current Expected Credit Losses (CECL) accounting
standard; and losses from sales and redemptions of $7 million.
The average yen/dollar exchange rate* in the first quarter of
2020 was 108.84, or 1.3% stronger than the average rate of 110.24
in the first quarter of 2019.
Total investments and cash at the end of March 2020 were $137.0
billion, compared with $131.4
billion at March 31, 2019. In the first
quarter, Aflac Incorporated repurchased $449
million, or 10.0 million of its common shares. At the end of
March 2020, the company had 27.1
million remaining shares authorized for repurchase.
Shareholders' equity was $26.4
billion, or $36.75 per share,
at March 31, 2020, compared with $26.0
billion, or $34.90 per share,
at March 31, 2019. Shareholders' equity at the end of
the first quarter included a net unrealized gain on investment
securities and derivatives of $6.0
billion, compared with a net unrealized gain of $6.5 billion at March 31, 2019.
Shareholders' equity at the end of the first quarter also included
an unrealized foreign currency translation loss of
$1.5 billion, compared with an
unrealized foreign currency translation loss of $1.8 billion at March 31, 2019. The
annualized return on average shareholders' equity in the first
quarter was 8.2%.
Adjusted earnings* in the first quarter were $882 million, compared with $849 million in the first quarter of 2019,
reflecting an increase of 3.9%. Adjusted earnings included
$7.1 million of pretax variable
investment income on alternative investments, in line with
expectations. Adjusted earnings per diluted share* increased 8.0%
to $1.21 in the quarter. The stronger
yen/dollar exchange rate impacted adjusted earnings per diluted
share by $0.01. Adjusted earnings per
diluted share excluding the impact of foreign currency* increased
7.1% to $1.20.
Shareholders' equity excluding AOCI* was $22.2 billion, or $30.92 per share at March 31, 2020, compared
with $21.6 billion, or $28.89 per share, at March 31, 2019. The
annualized adjusted return on equity excluding foreign currency
impact* in the first quarter was 15.7%.
AFLAC JAPAN
In yen terms, Aflac Japan's net premium income was ¥343.1
billion for the quarter, or 2.1% lower than a year ago, mainly due
to limited-pay products reaching paid-up status. Net investment
income, net of amortized hedge costs*, increased 4.0% to ¥69.8
billion . Total revenues in yen declined 1.1% to ¥414.0 billion.
Pretax adjusted earnings in yen for the quarter increased 1.2% on a
reported basis, reflecting strength in the benefit ratio and
favorable net investment income. Pretax adjusted earnings increased
1.7% on a currency-neutral basis. The pretax adjusted profit margin
for the Japan segment was 22.5%,
compared with 21.9% a year ago.
In dollar terms, net premium income decreased 0.9% to
$3.2 billion in the first quarter.
Net investment income, net of amortized hedge costs, increased 5.2%
to $642 million. Total revenues were
flat at $3.8 billion. Pretax adjusted
earnings increased 2.5% to $855
million.
For the quarter, new annualized premium sales (sales) for
protection-type first sector and third sector products decreased
25.8% to ¥13.6 billion, and total sales decreased 25.4% to ¥14.0
billion, or $129 million. Results in
the quarter were impacted primarily by a reduction in cancer
insurance sales through Japan Post.
AFLAC U.S.
Aflac U.S. net premium income rose 1.5% to $1.5 billion in the first quarter. Net investment
income remained flat at $177 million.
Total revenues were up 2.9% to $1.7
billion. Pretax adjusted earnings were $326 million, 0.9% higher than a year ago,
despite higher anticipated expenses in the quarter and reflecting a
favorable benefit ratio. The pretax adjusted profit margin for the
U.S. segment was 19.3%, compared with 19.7% a year ago.
Aflac U.S. sales decreased 5.2% in the quarter to $323 million. Results in the quarter reflect
growth in group sales offset by weakness in individual
sales.
CORPORATE AND OTHER
For the quarter, total revenue increased 9.5% to $104 million, reflecting net investment income of
$53 million and lower corporate
expenses. Net investment income, which increased $11 million, benefited primarily from a
$29 million pretax contribution from
the company's enterprise corporate hedging program. Pretax adjusted
earnings were a gain of $2 million,
compared with a loss of $18 million a
year ago, primarily reflecting higher net investment income from
the corporate enterprise hedging program.
DIVIDEND
The board of directors declared the second quarter dividend of
$0.28 per share, payable on
June 1, 2020 to shareholders of record at the close of
business on May 20, 2020.
OUTLOOK
Commenting on the company's results, Chairman and Chief
Executive Officer Daniel P. Amos
stated: "Throughout this incredibly challenging and unprecedented
time prompted by the global COVID-19 pandemic, I am very
appreciative of the flexibility, compassion and spirit of our
management, employees, and sales agents. Their safety and
health, along with that of our policyholders, is our greatest
priority, and we strive each day to be there for our policyholders
in their time of need.
"We ended the first quarter and entered this crisis with strong
earnings, a strong, well-diversified portfolio, strong capital
ratios and ample holding company liquidity further strengthened by
recent debt offerings. However, sales production in both
Japan and the U.S. did begin to
fall off in March, and the decline accelerated in the month of
April, impacted by a reduction in face-to-face activity. While our
respective sales platforms and distribution partners are working to
adapt to the new environment, we believe these trends point to
depressed sales at least until we see COVID-19 restrictions
subside.
"Recognizing challenges to production and the potential for
volatility in core earnings drivers associated with the evolving
nature of the global COVID-19 pandemic, it is challenging to
forecast with reasonable accuracy the full duration, magnitude, and
pace of recovery across our distribution and operations. Therefore,
we believe it is prudent to withdraw adjusted earnings guidance for
2020. However, we will continue to provide color on the
drivers of our earnings and any trends that we see for the
remainder of the year.
"With this in mind, we also remain committed to prudent
liquidity and capital management. We are understandably taking a
tactical approach to capital allocation, leaving all of our options
open for deployment and defense. In terms of repurchase guidance,
we remain in the market at reduced levels, and are being tactical
in our approach to repurchasing our stock. This will provide us
additional flexibility to maintain strong capital ratios on behalf
of our policyholders in both the U.S. and Japan. We remain committed to defending and
extending our 37-year track record of annual dividend increases. We
will also continue to invest opportunistically in our platform and
strengthen our franchise through growth investments such as our
recent definitive agreement to acquire Zurich North America's U.S.
Corporate Life and Pensions (Group Benefits) business. By doing so,
we look to emerge from this period in a continued position of
strength and leadership."
*See Non-U.S. GAAP Financial Measures section for an explanation
of foreign exchange and its impact on the financial statements and
definitions of the non-U.S. GAAP financial measures used in this
earnings release, as well as a reconciliation of such non-U.S. GAAP
financial measures to the most comparable U.S. GAAP financial
measures.
ABOUT AFLAC INCORPORATED
Aflac Incorporated (NYSE:
AFL) is a Fortune 500 company, helping provide protection to more
than 50 million people through its subsidiaries in Japan and the U.S., where it is a leading
supplemental insurer by paying cash fast when policyholders get
sick or injured. For more than six decades, insurance policies of
Aflac Incorporated's subsidiaries have given policyholders the
opportunity to focus on recovery, not financial stress. Aflac Life
Insurance Japan is the leading provider of medical and cancer
insurance in Japan, where it
insures 1 in 4 households. Fortune magazine recognized Aflac as one
of the 100 Best Companies to Work for in America for 20 consecutive
years. For 14 consecutive years, Aflac has been recognized by
Ethisphere as one of the World's Most Ethical Companies. In 2020,
Fortune included Aflac Incorporated on its list of World's Most
Admired Companies for the 19th time, and Bloomberg added Aflac
Incorporated to its Gender-Equality Index, which tracks the
financial performance of public companies committed to supporting
gender equality through policy development, representation and
transparency. To learn how to get help with expenses health
insurance doesn't cover, get to know us at 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. (ET) on Thursday, April 30,
2020.
AFLAC INCORPORATED
AND SUBSIDIARIES CONDENSED INCOME STATEMENT
|
(UNAUDITED – IN
MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS)
|
|
|
|
|
|
|
|
THREE MONTHS ENDED
MARCH 31,
|
|
2020
|
|
2019
|
|
% Change
|
Total
revenues
|
|
$
|
5,162
|
|
|
$
|
5,657
|
|
|
(8.8)
|
%
|
Benefits and claims,
net
|
|
2,939
|
|
|
2,967
|
|
|
(0.9)
|
|
Total acquisition and
operating expenses
|
|
1,503
|
|
|
1,448
|
|
|
3.8
|
|
Earnings before
income taxes
|
|
720
|
|
|
1,242
|
|
|
(42.0)
|
|
Income
taxes
|
|
154
|
|
|
314
|
|
|
|
Net
earnings
|
|
$
|
566
|
|
|
$
|
928
|
|
|
(39.0)
|
%
|
Net earnings per
share – basic
|
|
$
|
0.78
|
|
|
$
|
1.23
|
|
|
(36.6)
|
%
|
Net earnings per
share – diluted
|
|
0.78
|
|
|
1.23
|
|
|
(36.6)
|
|
Shares used to
compute earnings per share (000):
|
|
|
|
|
|
|
Basic
|
|
724,366
|
|
|
751,423
|
|
|
(3.6)
|
%
|
Diluted
|
|
727,512
|
|
|
755,790
|
|
|
(3.7)
|
|
Dividends paid per
share
|
|
$
|
0.28
|
|
|
$
|
0.27
|
|
|
3.7
|
%
|
AFLAC INCORPORATED
AND SUBSIDIARIES CONDENSED BALANCE SHEET
|
(UNAUDITED – IN
MILLIONS, EXCEPT FOR SHARE AMOUNTS)
|
|
|
|
|
|
|
|
MARCH
31,
|
|
2020
|
|
2019
|
|
% Change
|
Assets:
|
|
|
|
|
|
|
Total investments and
cash
|
|
$
|
136,967
|
|
|
$
|
131,438
|
|
|
4.2
|
%
|
Deferred policy
acquisition costs
|
|
10,164
|
|
|
9,892
|
|
|
2.7
|
|
Other
assets
|
|
4,485
|
|
|
4,349
|
|
|
3.1
|
|
Total
assets
|
|
$
|
151,616
|
|
|
$
|
145,679
|
|
|
4.1
|
%
|
Liabilities and
shareholders' equity:
|
|
|
|
|
|
|
Policy
liabilities
|
|
$
|
107,552
|
|
|
$
|
103,680
|
|
|
3.7
|
%
|
Notes payable and
lease obligations
|
|
6,758
|
|
|
5,900
|
|
|
14.5
|
|
Other
liabilities
|
|
10,904
|
|
|
10,050
|
|
|
8.5
|
|
Shareholders'
equity
|
|
26,402
|
|
|
26,049
|
|
|
1.4
|
|
Total liabilities and
shareholders' equity
|
|
$
|
151,616
|
|
|
$
|
145,679
|
|
|
4.1
|
%
|
Shares outstanding at
end of period (000)
|
|
718,382
|
|
|
746,487
|
|
|
(3.8)
|
%
|
NON-U.S. GAAP FINANCIAL MEASURES
This earnings release includes references to Aflac's non-U.S.
GAAP financial measures, adjusted earnings, adjusted earnings per
diluted share, adjusted return on equity, amortized hedge
costs/income, and adjusted book value. These measures are not
calculated in accordance with U.S. GAAP. The measures exclude items
that the company believes may obscure the underlying fundamentals
and trends in insurance operations because they tend to be driven
by general economic conditions and events or related to infrequent
activities not directly associated with insurance operations.
Management uses adjusted earnings, adjusted earnings per diluted
share, and adjusted return on equity to evaluate the financial
performance of Aflac's insurance operations on a consolidated basis
and believes that a presentation of these measures is vitally
important to an understanding of the underlying profitability
drivers and trends of Aflac's insurance business. The company
believes that amortized hedge costs/income, which are a component
of adjusted earnings, measure the periodic currency risk management
costs/income related to hedging certain foreign currency exchange
risks and are an important component of net investment income.
The company considers adjusted book value important as it excludes
accumulated other comprehensive income (AOCI), which fluctuates due
to market movements that are outside management's control.
Definitions of the company's non-U.S. GAAP financial measures and
reconciliations to the most comparable U.S. GAAP measures are
provided below and in the following schedules.
Due to the size of Aflac Japan, where the functional currency is
the Japanese yen, fluctuations in the yen/dollar exchange rate can
have a significant effect on reported results. In periods when the
yen weakens, translating yen into dollars results in fewer dollars
being reported. When the yen strengthens, translating yen into
dollars results in more dollars being reported. Consequently, yen
weakening has the effect of suppressing current period results in
relation to the comparable prior period, while yen strengthening
has the effect of magnifying current period results in relation to
the comparable prior period. A significant portion of the company's
business is conducted in yen and never converted into dollars but
translated into dollars for U.S. GAAP reporting purposes, which
results in foreign currency impact to earnings, cash flows and book
value on a U.S. GAAP basis. Because foreign exchange rates are
outside of management's control, Aflac believes it is important to
understand the impact of translating Japanese yen into U.S.
dollars. Adjusted earnings, adjusted earnings per diluted share,
and adjusted return on equity, all excluding current period foreign
currency impact, are computed using the average yen/dollar exchange
rate for the comparable prior year period, which eliminates
fluctuations driven solely by yen-to-dollar currency rate changes.
The average yen/dollar exchange rate is based on the published MUFG
Bank, Ltd. telegraphic transfer middle rate (TTM).
The company defines the non-U.S. GAAP financial measures
included in this earnings release as follows:
- Adjusted earnings are adjusted revenues less benefits and
adjusted expenses. The adjustments to both revenues and expenses
account for certain items that cannot be predicted or that are
outside management's control. Adjusted revenues are U.S. GAAP total
revenues excluding net investment gains and losses, except for
amortized hedge costs/income related to foreign currency exposure
management strategies and net interest cash flows from derivatives
associated with certain investment strategies. Adjusted expenses
are U.S. GAAP total acquisition and operating expenses including
the impact of interest cash flows from derivatives associated with
notes payable but excluding any nonrecurring or other items not
associated with the normal course of the company's insurance
operations and that do not reflect the company's underlying
business performance. The most comparable U.S. GAAP measure is net
earnings.
- Adjusted earnings per share (basic or diluted) are the adjusted
earnings for the period divided by the weighted average outstanding
shares (basic or diluted) for the period presented. The most
comparable U.S. GAAP measure is net earnings per share.
- Adjusted return on equity excluding foreign currency impact is
calculated using adjusted earnings excluding the current period
foreign currency impact divided by average shareholders' equity,
excluding AOCI. The most comparable U.S. GAAP financial measure is
return on average equity (ROE) as determined using net earnings and
average total shareholders' equity.
- Amortized hedge costs/income represent costs/income incurred or
recognized as a result of using foreign currency derivatives to
hedge certain foreign exchange risks in the Company's Japan segment or in the Corporate and Other
segment. These amortized hedge costs/income are estimated at the
inception of the derivatives based on the specific terms of each
contract and are recognized on a straight line basis over the term
of the hedge. There is no comparable U.S. GAAP financial measure
for amortized hedge costs/income.
- Adjusted book value is the U.S. GAAP book value (representing
total shareholders' equity), less AOCI as recorded on the U.S. GAAP
balance sheet. The company considers adjusted book value important
as it excludes AOCI, which fluctuates due to market movements that
are outside management's control.
- Adjusted book value per share is the adjusted book value at the
period end divided by the outstanding common shares at the period
end. The most comparable U.S. GAAP measure is total book value per
share.
RECONCILIATION OF
NET EARNINGS TO ADJUSTED EARNINGS1
|
(UNAUDITED – IN
MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS)
|
|
|
|
|
|
|
|
THREE MONTHS ENDED
MARCH 31,
|
|
2020
|
|
2019
|
|
% Change
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
566
|
|
|
$
|
928
|
|
|
(39.0)
|
%
|
|
|
|
|
|
|
|
Items impacting net
earnings:
|
|
|
|
|
|
|
Net investment (gains)
losses
|
|
448
|
|
|
(103)
|
|
|
|
Other and
non-recurring (income) loss
|
|
15
|
|
|
—
|
|
|
|
Income tax (benefit)
expense on items excluded
from adjusted earnings
|
|
(146)
|
|
|
23
|
|
|
|
|
|
|
|
|
|
|
Adjusted
earnings
|
|
882
|
|
|
849
|
|
|
3.9
|
%
|
Current period
foreign currency impact 2
|
|
(9)
|
|
|
N/A
|
|
|
Adjusted earnings
excluding current period foreign
currency impact 3
|
|
$
|
873
|
|
|
$
|
849
|
|
|
2.8
|
%
|
|
|
|
|
|
|
|
Net earnings per
diluted share
|
|
$
|
0.78
|
|
|
$
|
1.23
|
|
|
(36.6)
|
%
|
|
|
|
|
|
|
|
Items impacting net
earnings:
|
|
|
|
|
|
|
Net investment (gains)
losses
|
|
0.62
|
|
|
(0.14)
|
|
|
|
Other and
non-recurring (income) loss
|
|
0.02
|
|
|
—
|
|
|
|
Income tax (benefit)
expense on items excluded
from adjusted earnings
|
|
(0.20)
|
|
|
0.03
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per
diluted share
|
|
1.21
|
|
|
1.12
|
|
|
8.0
|
%
|
Current period
foreign currency impact 2
|
|
(0.01)
|
|
|
N/A
|
|
|
Adjusted earnings per
diluted share excluding
current period foreign currency impact
3
|
|
$
|
1.20
|
|
|
$
|
1.12
|
|
|
7.1
|
%
|
|
|
1
|
Amounts may not foot
due to rounding.
|
2
|
Prior period foreign
currency impact reflected as "N/A" to isolate change for current
period only.
|
3
|
Amounts excluding
current period foreign currency impact are computed using the
average foreign currency exchange rate for the comparable
prior-year period, which eliminates fluctuations driven solely by
foreign currency exchange rate changes.
|
RECONCILIATION OF
U.S. GAAP BOOK VALUE TO ADJUSTED BOOK
VALUE 1
|
(UNAUDITED - IN
MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS)
|
|
|
|
|
|
|
|
MARCH
31,
|
|
2020
|
|
2019
|
|
%
Change
|
U.S. GAAP book
value
|
|
$
|
26,402
|
|
|
$
|
26,049
|
|
|
|
Less:
|
|
|
|
|
|
|
Unrealized foreign
currency translation gains (losses)
|
|
(1,543)
|
|
|
(1,848)
|
|
|
|
Unrealized gains
(losses) on securities and derivatives
|
|
6,008
|
|
|
6,535
|
|
|
|
Pension liability
adjustment
|
|
(277)
|
|
|
(206)
|
|
|
|
Total AOCI
|
|
4,188
|
|
|
4,481
|
|
|
|
Adjusted book value
2
|
|
$
|
22,214
|
|
|
$
|
21,568
|
|
|
|
Add:
|
|
|
|
|
|
|
Unrealized foreign
currency translation gains (losses)
|
|
(1,543)
|
|
|
(1,848)
|
|
|
|
Adjusted book value
including unrealized foreign currency translation gains (losses)
3
|
|
$
|
20,671
|
|
|
$
|
19,720
|
|
|
|
|
|
|
|
|
|
|
Number of outstanding
shares at end of period (000)
|
|
718,382
|
|
|
746,487
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP book value
per common share
|
|
$
|
36.75
|
|
|
$
|
34.90
|
|
|
5.3
|
%
|
Less:
|
|
|
|
|
|
|
Unrealized foreign
currency translation gains (losses) per common share
|
|
(2.15)
|
|
|
(2.48)
|
|
|
|
Unrealized gains
(losses) on securities and derivatives per common share
|
|
8.36
|
|
|
8.75
|
|
|
|
Pension liability
adjustment per common share
|
|
(0.39)
|
|
|
(0.28)
|
|
|
|
Total AOCI per common
share
|
|
5.83
|
|
|
6.00
|
|
|
|
Adjusted book value
per common share 4
|
|
$
|
30.92
|
|
|
$
|
28.89
|
|
|
7.0
|
%
|
Add:
|
|
|
|
|
|
|
Unrealized foreign
currency translation gains (losses) per common share
|
|
(2.15)
|
|
|
(2.48)
|
|
|
|
Adjusted book value
including foreign currency translation gains (losses) per common
share 3
|
|
$
|
28.77
|
|
|
$
|
26.42
|
|
|
8.9
|
%
|
|
|
1
|
Amounts may not foot
due to rounding.
|
2
|
Adjusted book value
is the U.S. GAAP book value (representing total shareholder's
equity), excluding AOCI (as recorded on the U.S. GAAP balance
sheet).
|
3
|
Adjusted book value
including unrealized foreign currency translation gains (losses) is
adjusted book value plus unrealized foreign currency translation
gains (losses).
|
4
|
Adjusted book value
per share is the adjusted book value at the period ended divided by
the ending outstanding common shares for the period presented. The
most comparable U.S. GAAP measure is total book value per
share.
|
RECONCILIATION OF
U.S. GAAP RETURN ON EQUITY (ROE) TO ADJUSTED
ROE 1
|
(EXCLUDING IMPACT OF
FOREIGN CURRENCY)
|
|
|
|
|
|
THREE MONTHS ENDED
MARCH 31,
|
|
2020
|
|
2019
|
|
Net earnings - U.S.
GAAP ROE 2
|
|
8.2
|
%
|
|
15.0
|
%
|
Impact of excluding
unrealized foreign currency translation gains (losses)
|
|
(0.6)
|
|
|
(1.3)
|
|
Impact of excluding
unrealized gains (losses) on securities and derivatives
|
|
2.7
|
|
|
3.7
|
|
Impact of excluding
pension liability adjustment
|
|
(0.1)
|
|
|
(0.1)
|
|
Impact of excluding
AOCI
|
|
2.0
|
|
|
2.3
|
|
U.S. GAAP ROE - less
AOCI
|
|
10.2
|
|
|
17.3
|
|
Differences between
adjusted earnings and net earnings 3
|
|
5.7
|
|
|
(1.5)
|
|
Adjusted ROE -
reported
|
|
15.8
|
|
|
15.8
|
|
Less: Impact of
foreign currency 4
|
|
0.2
|
|
|
N/A
|
|
Adjusted ROE,
excluding impact of foreign currency
|
|
15.7
|
|
|
15.8
|
|
|
|
1
|
Amounts presented may
not foot due to rounding.
|
2
|
U.S. GAAP ROE is
calculated by dividing net earnings (annualized) by average
shareholders' equity.
|
3
|
See separate
reconciliation of net income to adjusted earnings.
|
4
|
Impact of foreign
currency is calculated by restating all foreign currency components
of the income statement to the weighted average foreign currency
exchange rate for the comparable prior year period. The impact is
the difference of the restated adjusted earnings compared to
reported adjusted earnings. For comparative purposes, only current
period income is restated using the weighted average prior period
exchange rate, which eliminates the foreign currency impact for the
current period. This allows for equal comparison of this financial
measure.
|
EFFECT OF FOREIGN
CURRENCY ON ADJUSTED RESULTS1
|
(SELECTED PERCENTAGE
CHANGES, UNAUDITED)
|
|
THREE MONTHS ENDED
MARCH 31, 2020
|
|
Including
Currency
Changes
|
|
Excluding
Currency
Changes2
|
Net premium income
3
|
|
(0.2)
|
%
|
|
(1.0)
|
%
|
Net investment income
4
|
|
5.2
|
|
|
4.7
|
|
Total benefits and
expenses
|
|
0.3
|
|
|
(0.4)
|
|
Adjusted
earnings
|
|
3.9
|
|
|
2.8
|
|
Adjusted earnings per
diluted share
|
|
8.0
|
|
|
7.1
|
|
|
|
1
|
Refer to previously
defined adjusted earnings and adjusted earnings per diluted
share.
|
2
|
Amounts excluding
currency changes were determined using the same foreign currency
exchange rate for the current period as the comparable period in
the prior year, which eliminates dollar-based fluctuations driven
solely from currency rate changes.
|
3
|
Net of
reinsurance
|
4
|
Less amortized hedge
costs/income on foreign investments
|
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. The company desires 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,"
"outlook" 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.
The company cautions 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:
- the effects of
COVID-19 and any resulting economic effects and
government interventions on the Company's business and
financial results
- ability to
attract and retain qualified sales associates, brokers,
employees, and distribution partners
- events related
to the ongoing Japan Post investigation and other
matters
- competitive
environment and ability to anticipate and respond to
market trends
- deviations in actual experience from
pricing and reserving
assumptions
- ability to continue to develop and
implement improvements in
information technology systems
- defaults and credit downgrades of
investments
- exposure to significant interest rate
risk
- concentration of business in
Japan
- limited availability of acceptable
yen-denominated investments
- failure to comply with restrictions on
policyholder privacy and
information security
- 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
- catastrophic
events including, but not necessarily limited to,
epidemics, pandemics, tornadoes, hurricanes, earthquakes,
tsunamis, war or other military action, terrorism or other acts
of violence, and damage incidental to such events
|
- difficult conditions in global capital
markets and the economy
- ability to protect the Aflac brand and the
Company's reputation
- extensive regulation and changes in law or
regulation by
governmental authorities
- foreign currency fluctuations in the
yen/dollar exchange rate
- tax rates applicable to the Company may
change
- decline in creditworthiness of other
financial institutions
- significant valuation judgments in
determination of amount of
impairments taken on the Company's investments
- U.S. tax audit risk related to conversion
of the Japan branch to a
subsidiary
- subsidiaries' ability to pay dividends to
the Parent Company
- decreases in the Company's financial
strength or debt ratings
- inherent limitations to risk management
policies and procedures
- concentration of the Company's investments
in any particular
single-issuer or sector
- differing judgments applied to investment
valuations
- ability to effectively manage key
executive succession
- changes in accounting standards
- level and outcome of litigation
- allegations or determinations of worker
misclassification in the
United States
|
Analyst and investor contact - David A.
Young, 706.596.3264 or 800.235.2667 or dyoung@aflac.com
Media contact - Catherine H.
Blades, 706.596.3014; FAX: 706.320.2288 or
cblades@aflac.com
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SOURCE Aflac Incorporated