AFLAC Sells Investment in Parmalat
December 18 2003 - 12:24PM
PR Newswire (US)
AFLAC Sells Investment in Parmalat COLUMBUS, Ga., Dec. 18
/PRNewswire-FirstCall/ -- AFLAC Incorporated announced today that
it has sold its investment in Parmalat Finanziaria SpA. (Logo:
http://www.newscom.com/cgi-bin/prnh/20010525/AFLACLOGO ) Commenting
on the sale, Senior Vice President and Chief Investment Officer
Joseph W. Smith, Jr. said: "We closely monitored financial
developments at Parmalat over the last week, and concluded that
Parmalat no longer met the profile of investments we want to retain
in our portfolio. We estimate that the sale of our holdings in
Parmalat will reduce net earnings by $257 million, or approximately
$.49 per diluted share, in the fourth quarter of 2003. "We are
certainly not pleased to be realizing a loss on this investment.
However, this action is consistent with our investment approach. We
purchase only investment-grade securities, and in the event that a
security is downgraded to below-investment-grade, we undertake a
thorough credit review to determine if we will continue to hold the
investment. The sale of Parmalat demonstrates that our tolerance
for below-investment-grade securities has not increased. We remain
focused on a conservative investment approach that we believe is in
the best interest of our policyholders and shareholders." In
addition to net earnings, the company views operating earnings, a
non- GAAP financial measure, as an important indicator of financial
performance. We believe the combined presentation and evaluation of
operating earnings, together with net earnings, provides
information that may enhance an investor's understanding of the
company's underlying profitability and results of operations. Our
definition of operating earnings, as presented in this press
release, excludes the following items on an after-tax basis from
net earnings: realized investment gains/losses and the impact from
SFAS 133. The fluctuations in these items are driven by external
economic factors that may not reflect the results of our underlying
business. Therefore, we believe operating earnings is a useful
financial measure because it focuses on the performance of the
business and excludes items that are inherently unpredictable.
President and Chief Financial Officer Kriss Cloninger III, added:
"We remain very pleased with the strength of our capital position,
especially as it relates to regulatory solvency standards. We
believe that when full-year 2003 results are reported, we will
again produce a risk-based capital ratio that compares very
favorably to our peer group. Furthermore, this strong capital base
will permit us to repurchase an amount of AFLAC shares in 2004 that
is consistent with our previously stated expectations. "At the same
time, we believe we are very well positioned to achieve our
earnings objectives. Our goal is to increase operating earnings per
diluted share by 17% in 2003 and 2004, excluding the impact of the
yen. And our 2005 objective is to increase operating earnings per
diluted share by 15% excluding the impact of foreign currency
translation. We believe those objectives are reasonable and
achievable, and reflect the continued need for the products that we
offer in Japan and the United States." AFLAC Incorporated
(NYSE:AFL) is an international holding company. A Fortune 500(R)
company, AFLAC insures more than 40 million people worldwide. It is
a leading writer of insurance products marketed at the worksite in
the United States, offering policies to employees at more than
278,900 payroll accounts. The company insures one out of four
Japanese households and is the largest life insurer in Japan in
terms of individual policies in force. In January 2003, AFLAC was
the number one insurance company in Fortune magazine's list of "The
100 Best Companies to Work for" and was included in the overall
listing for the fifth consecutive year. In March 2003, Fortune also
included AFLAC in its annual listing of "America's Most Admired
Companies." And in July 2003, Fortune named AFLAC to its list of
"America's 50 Best Companies for Minorities." AFLAC's Internet
address is aflac.com. 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 discussed. 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 oral discussions 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," 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 in our reports filed with the SEC,
could cause actual results to differ materially from those
contemplated by the forward-looking statements: legislative and
regulatory developments; assessments for insurance company
insolvencies; competitive conditions in the United States and
Japan; new product development; ability to attract and retain
qualified sales associates; ability to repatriate profits from
Japan; changes in U.S. and/or Japanese tax laws or accounting
requirements; credit and other risks associated with AFLAC's
investment activities; significant changes in interest rates;
fluctuations in foreign currency rates; deviations in actual
experience from pricing and reserving assumptions; level and
outcome of litigation; downgrades in the company's credit rating;
changes in rating agency policies or practices; subsidiary's
ability to pay dividends to parent company, and general economic
conditions in the United States and Japan. Analyst and investor
contact - Kenneth S. Janke Jr., (800) 235-2667 - option 3, FAX:
(706) 324-6330, or Media contact - Laura Kane, (706) 596-3493, FAX:
(706) 320-2288, or
http://www.newscom.com/cgi-bin/prnh/20010525/AFLACLOGO
http://photoarchive.ap.org/ DATASOURCE: AFLAC Incorporated CONTACT:
Analyst and investor contact, Kenneth S. Janke Jr., +1-800-235-2667
- option 3, fax, +1-706-324-6330, or , or Media contact, Laura
Kane, +1-706-596-3493, fax, +1-706-320-2288, or , both of AFLAC
Incorporated Web site: http://www.aflac.com/
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