COLUMBUS, Ga., July 27, 2011 /PRNewswire/ -- Aflac Incorporated
today reported its second quarter results.
Reflecting the benefit from a stronger yen/dollar exchange rate
but higher realized investment losses, total revenues rose 2.2% to
$5.1 billion in the second quarter of
2011, compared with $5.0 billion in
the second quarter of 2010. Net earnings were $280 million, or $.60 per diluted share, compared with
$581 million, or $1.23 per share, a year ago.
Consistent with the company's previously stated proactive
investment derisking objectives, net earnings in the second quarter
included pretax realized investment losses of $668 million ($453
million after-tax), or $.96
per diluted share, compared with pretax losses of $89 million ($58
million after-tax), or $.12
per diluted share in the second quarter of 2010. During the second
quarter of 2011, the company sold investment securities (amortized
cost of $1.5 billion; $2.3 billion par value), and realized a pretax
loss of $182 million ($118 million after-tax). The most notable sales
in the quarter included Banco BPI (amortized cost of $306 million; $310
million par value), resulting in a pretax loss of
$99 million ($64 million after-tax); Irish Life and Permanent (amortized cost of
$112 million; $457 million par value), resulting in a pretax
loss of $74 million ($48 million after-tax); and NBG Finance PLC
(amortized cost of $212 million;
$372 million par value), resulting in
a pretax loss of $47 million
($31 million after-tax). The company
also sold EFG Hellas PLC, which was previously impaired at
March 31, 2011, (amortized cost of
$166 million; $410 million par value), resulting in a pretax
gain of $2 million ($1 million after-tax). In addition, the company
impaired certain securities, resulting in a pretax loss of
$528 million ($343 million after-tax). These impairments
included exposures to two Portuguese banks: Banco Espirito Santo
S.A., resulting in a pretax loss of $163
million ($106 million
after-tax); and Caixa Geral De Depositos, S.A., resulting in a
pretax loss of $112 million
($73 million after-tax). In addition,
the company recognized a net pretax gain of $42 million ($27
million after-tax) associated with foreign exchange and
passive derivative activities.
As a result of the company's proactive investment derisking
program, Aflac has significantly reduced peripheral Eurozone,
perpetual, and financial exposures on an amortized cost basis. At
the start of 2008, sovereign and financial investments in
peripheral Eurozone countries made up 5.9% of the total investments
and cash, declining to 2.8% by the end of the second quarter of
2011. At the start of 2008, investments in perpetual securities
made up 14.7% of total investments and cash, declining to 8.0% by
the end of the second quarter of 2011. At the start of 2008,
investments in financial securities made up 41.9% of the total
portfolio and declined to 30.1% by the end of the second quarter of
2011. As a result of the proactive investment derisking program,
the company has no direct investment exposure to Greece, only senior indebtedness in
Ireland, and materially lower
exposure to Portuguese investments.
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 before realized investment gains and losses from
securities transactions, impairments, and derivative and hedging
activities, as well as nonrecurring items. Aflac's derivative
activities, which are primarily passive in nature, include foreign
currency, interest rate and credit default swaps in variable
interest entities that are consolidated, and securities with
embedded derivatives. 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
nonrecurring items, tend to be driven by general economic
conditions and events, 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 a
limited number of transactions, 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.
Operating earnings in the second quarter were $733 million, compared with $639 million in the second quarter of 2010.
Operating earnings per diluted share rose 15.6% to
$1.56 in the quarter, compared with
$1.35 a year ago. The stronger
yen/dollar exchange rate increased operating earnings per diluted
share by $.11 during the second
quarter. Excluding the impact from the stronger yen, operating
earnings per share increased 7.4%.
Results for the first six months of 2011 also benefited from the
stronger yen. Total revenues were up 1.6% to $10.2 billion, compared with $10.0 billion in the first half of 2010. Net
earnings were $674 million, or
$1.43 per diluted share, compared
with $1.2 billion, or $2.58 per share, for the first six months of
2010. Operating earnings for the first half of 2011 were
$1.5 billion, or $3.19 per diluted share, compared with
$1.3 billion, or $2.76 per share, in 2010. Excluding the benefit
of $.21 per share from the stronger
yen, operating earnings per diluted share rose 8.0% for the first
six months of 2011.
Reflecting the benefit from a stronger yen/dollar exchange rate,
total investments and cash at the end of June 2011 were $93.0
billion, compared with $88.4
billion at March 31, 2011.
In the second quarter, Aflac repurchased 1.0 million shares of
its common stock, bringing the total number of shares repurchased
for the year to 4.1 million. At the end of June, the company had
26.3 million shares available for purchase under its share
repurchase authorization.
Shareholders' equity was $12.0
billion at June 30, 2011,
compared with $11.0 billion at
March 31, 2011. Shareholders' equity
at the end of the second quarter included a net unrealized gain on
investment securities and derivatives of $758 million, compared with a net unrealized loss
of $21 million at the end of
March 2011. Shareholders' equity per
share was $25.65 at June 30, 2011, compared with $23.58 per share at March
31, 2011. The annualized return on average shareholders'
equity in the second quarter was 9.7%. On an operating basis
(excluding realized investment losses and the impact of derivative
gains/losses on net earnings, and unrealized investment and
derivative gains/losses in shareholders' equity), the annualized
return on average shareholders' equity was 26.3% for the second
quarter.
AFLAC JAPAN
Aflac Japan's total revenues in yen were up 3.7% in the second
quarter of 2011. Premium income in yen rose 5.1%, and net
investment income declined 5.0%. Investment income growth in yen
terms was suppressed by the stronger yen/dollar exchange rate
because approximately 32% of Aflac Japan's second quarter
investment income was dollar-denominated. The pretax operating
profit margin remained unchanged from the second quarter of 2010 at
21.1%, and pretax operating earnings in yen increased 3.4%. For the
first half of the year, premium income in yen increased 5.0%, and
net investment income declined 2.8%. Total revenues in yen were up
3.7%, and pretax operating earnings grew 6.0%.
The average yen/dollar exchange rate in the second quarter of
2011 was 81.54, or 12.9% stronger than the average rate of 92.05 in
the second quarter of 2010. For the first six months, the average
exchange rate was 81.93, or 11.4% stronger than the rate of 91.26 a
year ago. Aflac Japan's growth rates in dollar terms for both
the second quarter and first six months were magnified as a result
of the stronger average yen/dollar exchange rates.
Reflecting the stronger yen, premium income in dollars rose
18.3% to $3.8 billion in the second
quarter. Net investment income was up 7.3% to $636 million. Total revenues increased 16.8% to
$4.4 billion. Pretax operating
earnings rose 16.7% to $931 million.
For the first six months, premium income was $7.5 billion, or 16.9% higher than a year ago.
Net investment income rose 8.4% to $1.3
billion. Total revenues were up 15.5% to $8.8 billion. Pretax operating earnings were
$1.9 billion, or 18.0% higher than a
year ago.
Aflac Japan again produced better-than-expected sales results.
New annualized premium sales rose 6.6% to 36.1 billion yen in the second quarter of 2011.
In dollar terms, new annualized premium sales were $442 million. Bank channel sales continued a
strong trend of growth, generating 7.6
billion yen in sales in the second quarter, which is an
increase of 95.6% over the second quarter of 2010. Sales of WAYS,
the unique hybrid whole-life product, increased 190.7% over the
second quarter of 2010. As expected, the intense focus on WAYS,
which is particularly popular through the bank channel, impacted
child endowment sales, which were down 1.4% for the quarter.
Following the March 2011 introduction
of the new base cancer policy DAYS, cancer sales increased 12.4%
over the second quarter of 2010.
For the first six months of the year, new annualized premium
sales were up 9.4% to 70.2 billion
yen, or $856 million.
AFLAC U.S.
Aflac U.S. total revenues rose 4.0% to $1.3 billion in the second quarter. Premium
income increased 3.4% to $1.2
billion, and net investment income was up 9.7% to
$148 million. Pretax operating
earnings were $246 million, an
increase of 8.3%. For the first six months, total revenues were up
3.6% to $2.7 billion and premium
income rose 2.9% to $2.4 billion. Net
investment income increased 9.2% to $291
million. Pretax operating earnings were $499 million, or 5.9% higher than a year ago.
Aflac U.S. sales showed improvement in the quarter as targeted
product and field force recruiting initiatives continued to take
hold. In the second quarter, new sales increased 5.9% to
$353 million. Benefiting from
coordinated field force marketing efforts, dental sales increased
44.1%. For the first half of the year, new sales increased 6.1% to
$689 million. Field force recruiting
benefited from targeted national advertising campaigns, generating
a 10.2% increase in recruits for the second quarter and 11.9% for
the six months.
DIVIDEND
The board of directors declared the third quarter cash dividend.
The third quarter dividend of $.30
per share is payable on September 1,
2011, to shareholders of record at the close of business on
August 17, 2011.
OUTLOOK
Commenting on the company's second quarter results, Chairman and
Chief Executive Officer Daniel P.
Amos stated: "We are pleased with our overall results in the
second quarter of 2011. Aflac Japan overcame challenges resulting
from the most destructive and devastating natural disaster in
Japan's history, to achieve strong
sales growth.
"We were also encouraged that Aflac U.S. continued to generate
positive sales results, despite the lingering weakness in the U.S.
economy. Aflac U.S. has continued to generate significant
recruiting gains, which we believe benefited from targeted
advertising activities designed to promote the Aflac sales
opportunity. As a result of our positive performance in both
Japan and the U.S., we posted
strong consolidated financial results.
"As we have communicated over the past several years,
maintaining a strong risk-based capital, or RBC ratio, remains a
top priority for us. Although we have not yet completed our
statutory financial statements for the second quarter, we estimate
our RBC ratio will be within the range of 480% and 520% at the end
of June. The strength of our capital position has allowed us to
pursue our proactive investment derisking program to further
strengthen our balance sheet and enhance shareholder value for the
long term. Additionally, we've reviewed, and are comfortable with,
Aflac Japan's preliminary solvency margin ratio.
"Like the first quarter, realized investment losses reflected
the significant progress we've made with our proactive investment
derisking program. I am pleased with where we are with that
initiative and believe the extensive sales and impairments of
riskier investments are largely behind us. However, we will
continue to closely monitor Aflac's consolidated $93 billion portfolio.
"With two quarters of the year complete, we continue to believe
we are positioned for another year of solid financial performance.
While we believe our proactive investment derisking program has
been substantially completed from a realized investment loss
perspective, we continue to be challenged by the low interest rate
environment, especially in Japan.
I believe we've done a very good job in managing our operations,
including expense control. However, as the year progresses, we
anticipate increasing our spending, particularly on marketing and
IT initiatives. I want to reaffirm our 2011 objective of growing
operating earnings per diluted share at 8%, excluding the impact of
the yen. If the yen averages 80 to 85 to the dollar for the full
year, we would expect reported operating earnings to be in the
range of $6.09 to $6.34 per diluted
share. Using that same exchange rate assumption, we would expect
third quarter operating earnings of $1.54 to
$1.60 per diluted share.
"Looking ahead, we expect 2012 operating earnings per diluted
share to increase 2% to 5% on a currency neutral basis. This upward
revision to our 2012 earnings objective assumes no additional
significant investment losses and no further meaningful decline in
interest rates. Furthermore, once the effects of our investment
derisking and low interest rates have been fully integrated into
our financial results, we believe the rate of earnings growth in
future years should improve."
ABOUT AFLAC
When a policyholder gets sick or hurt, Aflac pays cash benefits
fast. For more than 55 years, Aflac insurance policies have given
policyholders the opportunity to focus on recovery, not financial
stress. In the United States,
Aflac is the number one provider of guaranteed-renewable insurance.
In Japan, Aflac is the number one
life insurance company in terms of individual policies in force.
Aflac insurance products provide protection to more than 50 million
people worldwide. For five consecutive years, Aflac has been
recognized by Ethisphere magazine as one of the World's Most
Ethical Companies and by Forbes magazine as one of America's
Best-Managed Companies in the Insurance category. In 2011,
Fortune magazine recognized Aflac as one of the 100 Best
Companies to Work For in America for the thirteenth consecutive
year. Also, Fortune magazine included Aflac on its list of
Most Admired Companies for the tenth time in 2011. 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 aflacenespanol.com.
A copy of Aflac's Financial Analysts Briefing (FAB) supplement
for the second quarter of 2011 can be found on the "Investors" page
at aflac.com, a complete listing of Aflac's investment holdings in
the financial sector along with separate listings of the company's
sovereign and financial investments in both perpetual and
peripheral Eurozone securities.
Aflac Incorporated will webcast its second quarter conference
call via the "Investors" page of aflac.com at 9:00 a.m. (EDT) on Thursday, July 28, 2011.
AFLAC
INCORPORATED AND SUBSIDIARIES CONDENSED INCOME
STATEMENT
(UNAUDITED –
IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED JUNE
30,
|
|
2011
|
|
|
2010
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
$
|
5,088
|
|
$
|
4,980
|
|
2.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and claims
|
|
3,310
|
|
|
2,885
|
|
14.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition and operating
expenses
|
|
1,325
|
|
|
1,206
|
|
9.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income
taxes
|
|
453
|
|
|
889
|
|
(49.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
173
|
|
|
308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
$
|
280
|
|
$
|
581
|
|
(51.9)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share –
basic
|
$
|
.60
|
|
$
|
1.24
|
|
(51.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share –
diluted
|
|
.60
|
|
|
1.23
|
|
(51.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to compute earnings
per share (000):
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
466,498
|
|
|
468,824
|
|
(.5)
|
%
|
|
|
Diluted
|
|
469,752
|
|
|
472,539
|
|
(.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid per
share
|
$
|
.30
|
|
$
|
.28
|
|
7.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFLAC
INCORPORATED AND SUBSIDIARIES CONDENSED INCOME
STATEMENT
(UNAUDITED –
IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
|
SIX MONTHS ENDED JUNE
30,
|
|
2011
|
|
|
2010
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
$
|
10,204
|
|
$
|
10,044
|
|
1.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and claims
|
|
6,532
|
|
|
5,741
|
|
13.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Total acquisition and operating
expenses
|
|
2,620
|
|
|
2,440
|
|
7.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income
taxes
|
|
1,052
|
|
|
1,863
|
|
(43.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
378
|
|
|
646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
$
|
674
|
|
$
|
1,217
|
|
(44.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share –
basic
|
$
|
1.44
|
|
$
|
2.60
|
|
(44.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share –
diluted
|
|
1.43
|
|
|
2.58
|
|
(44.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to compute earnings
per share (000):
|
|
|
|
|
|
|
|
|
|
|
Basic
|
467,317
|
|
468,377
|
|
(.2)
|
%
|
|
|
Diluted
|
470,990
|
|
472,497
|
|
(.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid per
share
|
$
|
.60
|
|
$
|
.56
|
|
7.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFLAC
INCORPORATED AND SUBSIDIARIES CONDENSED BALANCE
SHEET
(UNAUDITED –
IN MILLIONS, EXCEPT FOR SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
|
JUNE 30,
|
|
2011
|
|
|
2010
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments and
cash
|
$
|
92,984
|
|
$
|
79,532
|
|
16.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Deferred policy acquisition
costs
|
|
10,028
|
|
|
8,941
|
|
12.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets
|
|
3,220
|
|
|
2,766
|
|
16.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
106,232
|
|
$
|
91,239
|
|
16.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders'
equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Policy liabilities
|
$
|
86,366
|
|
$
|
73,810
|
|
17.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable
|
|
3,048
|
|
|
2,653
|
|
14.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Other liabilities
|
|
4,837
|
|
|
4,746
|
|
1.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
11,981
|
|
|
10,030
|
|
19.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
106,232
|
|
$
|
91,239
|
|
16.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding at end of
period (000)
|
|
467,067
|
|
|
470,769
|
|
(.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF OPERATING
EARNINGS TO NET EARNINGS
(UNAUDITED –
IN MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED JUNE
30,
|
|
2011
|
|
|
2010
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings
|
$
|
733
|
|
$
|
639
|
|
14.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling items, net of
tax:
|
|
|
|
|
|
|
|
|
|
Realized investment gains
(losses):
|
|
|
|
|
|
|
|
|
|
Securities
transactions and impairments
|
|
(480)
|
|
|
8
|
|
|
|
|
Impact of
derivative and hedging activities
|
|
27
|
|
|
(66)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
$
|
280
|
|
$
|
581
|
|
(51.9)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings per diluted
share
|
$
|
1.56
|
|
$
|
1.35
|
|
15.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling items, net of
tax:
|
|
|
|
|
|
|
|
|
|
Realized investment
gains (losses):
|
|
|
|
|
|
|
|
|
|
Securities
transactions and impairments
|
|
(1.02)
|
|
|
.02
|
|
|
|
|
Impact of
derivative and hedging activities
|
|
.06
|
|
|
(.14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per diluted
share
|
$
|
.60
|
|
$
|
1.23
|
|
(51.2)
|
%
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF OPERATING
EARNINGS TO NET EARNINGS
(UNAUDITED –
IN MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
|
SIX MONTHS ENDED JUNE
30,
|
|
2011
|
|
|
2010
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings
|
$
|
1,504
|
|
$
|
1,305
|
|
15.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling items, net of
tax:
|
|
|
|
|
|
|
|
|
|
Realized investment gains
(losses):
|
|
|
|
|
|
|
|
|
|
Securities
transactions and impairments
|
|
(838)
|
|
|
(33)
|
|
|
|
|
Impact of
derivative and hedging activities
|
|
8
|
|
|
(55)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
$
|
674
|
|
$
|
1,217
|
|
(44.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings per diluted
share
|
$
|
3.19
|
|
$
|
2.76
|
|
15.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling items, net of
tax:
|
|
|
|
|
|
|
|
|
|
Realized investment
gains (losses):
|
|
|
|
|
|
|
|
|
|
Securities
transactions and impairments
|
|
(1.78)
|
|
|
(.06)
|
|
|
|
|
Impact of
derivative and hedging activities
|
|
.02
|
|
|
(.12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per diluted
share
|
$
|
1.43
|
|
$
|
2.58
|
|
(44.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
EFFECT OF
FOREIGN CURRENCY ON OPERATING RESULTS(1)
(SELECTED
PERCENTAGE CHANGES, UNAUDITED)
|
|
|
|
|
|
THREE MONTHS
ENDED JUNE 30, 2011
|
Including
Currency
Changes
|
Excluding
Currency
Changes
(2)
|
|
|
|
|
|
Premium income
|
14.4
|
%
|
4.6
|
%
|
|
|
|
|
|
|
|
Net investment
income
|
7.9
|
|
1.2
|
|
|
|
|
|
|
|
|
Total benefits and
expenses
|
13.3
|
|
3.8
|
|
|
|
|
|
|
|
|
Operating
earnings
|
14.7
|
|
6.7
|
|
|
|
|
|
|
|
|
Operating earnings per
diluted share
|
15.6
|
|
7.4
|
|
|
|
|
(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 RESULTS (1)
(SELECTED
PERCENTAGE CHANGES, UNAUDITED)
|
|
SIX MONTHS
ENDED JUNE 30, 2011
|
Including
Currency
Changes
|
Excluding
Currency
Changes
(2)
|
|
|
|
|
|
Premium income
|
13.2
|
%
|
4.5
|
%
|
|
|
|
|
|
|
|
Net investment
income
|
8.6
|
|
2.6
|
|
|
|
|
|
|
|
|
Total benefits and
expenses
|
11.9
|
|
3.4
|
|
|
|
|
|
|
|
|
Operating
earnings
|
15.2
|
|
7.6
|
|
|
|
|
|
|
|
|
Operating earnings per
diluted share
|
15.6
|
|
8.0
|
|
|
|
|
(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.
|
|
|
|
|
|
|
|
|
2011
OPERATING EARNINGS PER SHARE SCENARIOS
|
|
Average
Exchange
Rate
|
|
|
Annual
Operating
EPS
|
|
%
Growth
Over 2010
|
Yen
Impact
|
|
|
|
80
|
|
|
|
$
|
6.34
|
|
|
|
14.6
|
|
|
|
$
|
.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
85
|
|
|
|
|
6.09
|
|
|
|
10.1
|
|
|
|
|
.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
87.69
|
*
|
|
|
|
5.97
|
|
|
|
8.0
|
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90
|
|
|
|
|
5.87
|
|
|
|
6.1
|
|
|
|
(.10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
95
|
|
|
|
|
5.68
|
|
|
|
2.7
|
|
|
|
(.29)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Actual 2010 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 generally;
governmental actions for the purpose of stabilizing the financial
markets; defaults and downgrades in certain 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;
subjective determinations of amount of impairments taken on our
investments; realization of unrealized losses; limited availability
of acceptable yen-denominated investments; concentration of our
investments in any particular sector or issuer; concentration of
business in Japan; 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 the Parent Company; changes in law or
regulation by governmental authorities; ability to attract and
retain qualified sales associates and employees; ability to
continue to develop and implement improvements in information
technology systems; changes in U.S. and/or Japanese accounting
standards; decreases in our financial strength or debt ratings;
level and outcome of litigation; ability to effectively manage key
executive succession; catastrophic events including, but not
necessarily limited to, tornadoes, hurricanes, earthquakes,
tsunamis, and radiological disasters; 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,
706.596.3493, FAX: 706.320.2288, or lkane@aflac.com
SOURCE Aflac Incorporated